How should payers balance fiscal sustainability with access to transformative medical technology? We study Louisiana’s 2019 Medicaid subscription model for hepatitis C (HCV), the first example of a U.S. state employing a two-part tariff to secure unlimited access to curative medicines. Using a differences-in-differences design comparing spending on beneficiaries with HCV to those with diabetes or HIV, we find that treatment volume tripled, medical spending fell, and new HCV diagnoses declined 23 percent. The state’s $37 million in incremental spending on antivirals generated $266 million in five-year savings. Innovative financing models can generate health benefits and near-term savings for payers. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Medicaid is one of the largest public programs in the United States—providing health insurance to over 75 million low-income Americans—and over three quarters of its enrollees receive care via private “managed care” insurers. In this article, we make three central points about the economics of contracting out Medicaid to private insurers. First, the empirical evidence on Medicaid privatization is mixed: contracting out has not meaningfully reduced public costs or improved quality of care. Second, we propose a framework, which we call “procured competition,” to describe the unique structure of Medicaid managed care as a hybrid of public procurement and regulated competition. Third, we discuss the key policy levers across procurement, competition, and consumer choice in this model. Throughout, we highlight open research questions, arguing that the enormous variation in how states design these programs—combined with limited evidence on what works—represents a promising area for high-impact scholarship.

This paper examines the effects of privatizing social health insurance. We exploit a natural experiment in Medicaid, wherein nearly 100,000 enrollees were randomly assigned between a publicly operated fee-for-service system and private managed care. Managed care reduced costs by 5.6 percent via cost-effective substitutions among prescription drugs and via lower prices for outpatient services. We present evidence that pharmacy utilization management was the key mechanism reducing overuse and encouraging substitution to lower-cost drugs without decreasing observed quality. In contrast, privatizing medical benefits led to only modest savings and was associated with decreased health care quality and consumer satisfaction. (JEL G22, H41, I13, I18, I38)

Importance:Adult dental coverage under Medicaid varies widely across states and delivery systems. Most adult beneficiaries are now enrolled in managed care, yet little is known about how these benefits are structured and implemented within Medicaid managed care organizations (MCOs). Objective:To examine trends in the generosity, delivery models, and enrollment patterns of adult dental benefits delivered through Medicaid MCOs and assess coverage alignment with Medicaid fee-for-service (FFS) coverage. Design, Setting, and Participants:This cross-sectional analysis included adult Medicaid beneficiaries aged 19 years or older who had state Medicaid MCO or FFS coverage across all 50 states and Washington, DC. This analysis used a novel linked national dataset combining multiple Centers for Medicare & Medicaid Services administrative sources from 2016 to 2022. The analysis was conducted from April 8, 2025, to October 8, 2025. Exposures:State-level Medicaid MCO or FFS program with adult comprehensive dental coverage, emergency-only dental coverage, or no dental coverage. Main Outcomes and Measures:The generosity of dental benefits; the degree of alignment in benefit generosity between Medicaid MCO and Medicaid FFS programs; and enrollment of adults in dental MCO or FFS programs by benefit (coverage) type. Results:The number of states offering comprehensive adult dental benefits through Medicaid MCOs increased from 33 (64.7%) in 2016 to 36 (70.6%) in 2022. Carve-out models, typically using stand-alone prepaid health plans for dental coverage, increased from 4 states (7.8%) in 2016 to 8 states (15.7%) in 2022. In 2016, 51.0% of states had mismatched benefit levels between MCO and FFS programs compared with 35.3% in 2022. The number of MCO enrollees with comprehensive dental coverage increased from 14.2 million (58.7%) in 2016 to 25.3 million (59.8%) in 2022, reflecting substantial managed care penetration. Conclusions and Relevance:This study found that although the generosity and scope of MCO dental benefits expanded over time, alignment with FFS programs remained inconsistent. As new legislation cuts federal funding to states, understanding how dental benefits are designed and delivered is critical to inform future coverage decisions and ensure equitable access.

Despite the importance of primary care in disease prevention, few studies have examined behavioral interventions to increase primary care engagement. In partnership with the Maine Department of Health and Human Services, we implemented a randomized mail-based outreach strategy to connect newly enrolled adults in MaineCare Primary Care Case Management with primary care providers. From March 16, 2021, through January 1, 2022, members were randomized to receive either (1) a standard text-heavy outreach packet (control arm) or (2) the standard packet plus 2 visually simplified mailers that emphasized the value and low cost of a primary care check-up and listed a single primary care provider near the enrollee's home (intervention arm). We found that over 12 months of follow-up, the intervention had no significant effects on the rate or number of primary care visits, emergency department visits, or inpatient hospitalizations. We also observed no significant impact on Medicaid enrollment or recommended primary care services, including receipt of flu shots, cholesterol screenings, or mammograms. Results suggest that barriers targeted by the mailers were not primary drivers of primary care engagement, and other strategies are needed to help connect new Medicaid enrollees with primary care.

ImportanceThere is increased interest in public reporting of, and linking financial incentives to, the performance of organizations on health equity metrics, but variation across organizations could reflect differences in performance or selection bias.ObjectiveTo assess whether differences across health plans in sex- and age-adjusted racial disparities are associated with performance or selection bias.Design, Setting, and ParticipantsThis cross-sectional study leveraged a natural experiment, wherein a southern US state randomly assigned much of its Medicaid population to 1 of 5 plans after shifting to managed care in 2012. Enrollee-level administrative claims and enrollment data from 2011 to 2015 were obtained for self-identified Black and White enrollees. The analyses were limited to Black and White Medicaid enrollees because they accounted for the largest percentages of the population and could be compared with greater statistical power than other groups. Data were analyzed from June 2021 to September 2024.ExposuresPlan enrollment via self-selection (observational population) vs random assignment (randomized population).Main Outcomes and MeasuresAnnual counts of primary care visits, low-acuity emergency department visits, prescription drug fills, and total spending. For observational and randomized populations, models of each outcome were fit as a function of plan indicators, indicators for race, interactions between plan indicators and race, and age and sex. Models estimated the magnitude of racial differences within each plan and tested whether this magnitude varied across plans.ResultsOf 118 101 enrollees (mean [SD] age, 9.3 [7.5] years; 53.0% female; 61.4% non-Hispanic Black; and 38.6% non-Hispanic White), 70.2% were included in the randomized population, and 29.8% were included in the observational population. Within-plan differences in primary care visits, low-acuity emergency department visits, prescription drug use, and total spending between Black and White enrollees were large but did not vary substantially and were not statistically significantly different across plans in the randomized population, suggesting minimal effects of plans on racial differences in these measures. In contrast, in the observational population, racial differences varied substantially across plans (standard deviations 2-3 times greater than in the randomized population); this variation was statistically significant after adjustment for multiple testing, except for emergency department visits. Greater between-plan variation in racial differences in the observational population was only partially explained by sampling error. Stratifying by race did not bring observational estimates of plan effects meaningfully closer to randomized estimates.Conclusions and RelevanceThis cross-sectional study showed that selection bias may mischaracterize plans’ relative performance on measures of health care disparities. It is critical to address disparities in Medicaid, but adjusting plan payments based on disparity measures may have unintended consequences.

Importance:Work requirements are a controversial feature of US safety-net programs, with some policymakers seeking to expand their use. Little is known about the demographic, clinical, and socioeconomic characteristics of individuals most likely to be negatively impacted by work requirements. Objective:To examine the association between work requirements and safety-net program enrollment. Design, Setting, and Participants:This cohort study included Medicaid and Supplemental Nutrition Assistance Program (SNAP) enrollees in Connecticut. The impact of SNAP work requirements for able-bodied adults without dependents-the target population-was estimated using a triple-differences research design comparing outcomes before and after the policy (first difference) in affected and exempted towns (second difference) between the targeted population and untargeted parents and caregivers (third difference). SNAP and Medicaid enrollment trends were assessed for a 24-month period, and the characteristics of individuals most likely to lose coverage were examined. Data were collected from August 2015 to April 2018, and data were analyzed from August 2022 to September 2024. Exposures:The reintroduction of SNAP work requirements in 2016. Main Outcomes and Measures:Proportion of enrollees disenrolled from SNAP and Medicaid. Results:Of 81 888 Medicaid enrollees in Connecticut, 46 872 (57.2%) were female, and the mean (SD) age was 36.6 (7.0) years. Of these, 38 344 were able-bodied adults without dependents, of which 19 172 were exposed to SNAP work requirements, and 43 544 were parents or caregivers exempted from SNAP work requirements. SNAP coverage declined 5.9 percentage points (95% CI, 5.1-6.7), or 25%, following work requirements. There were no statistically significant changes in Medicaid coverage (0.2 percentage points; 95% CI, -1.4 to 1.0). Work requirements disproportionately affected individuals with more chronic illnesses, targeted beneficiaries who were older, and beneficiaries with lower incomes. Individuals with diabetes were 5 percentage points (95% CI, 0.8-9.3), or 91%, likelier to lose SNAP coverage than those with no chronic conditions; older SNAP beneficiaries (aged 40 to 49 years) with multiple comorbidities were 7.3 percentage points (95% CI, 4.3-11.3), or 553%, likelier to disenroll than younger beneficiaries (aged 25 to 29 years) without chronic conditions; and households with the lowest incomes were 18.6 percentage points (95% CI, 11.8-25.4), or 204%, likelier to lose coverage than the highest income SNAP beneficiaries. Conclusions and Relevance:In this cohort study, SNAP work requirements led to substantial reductions in SNAP coverage, especially for the most clinically and socioeconomically vulnerable. Work requirements had little effect on Medicaid coverage, suggesting they did not lead to sufficient increases in employment to transition beneficiaries off the broader safety net.

Objective: To study the impact of managed long-term services and supports (MLTSS) on the use of long-term care, as well as acute care. Study Setting and Design: We use a staggered difference-in-differences (DiDs) regression design, exploiting the variation in timing of the rollout of MLTSS programs across states between 2004 and 2018. We compared individuals in states that implemented MLTSS with individuals in states that did not implement MLTSS. Our outcomes included formal home care use, nursing home status, informal care use, hospitalizations, overnight nursing home visits, and falls. Data Source and Analytic Sample: This study uses secondary data from the Health and Retirement Study data, linked with state identifiers. The sample includes adults aged 65 and older who report at least one functional limitation. Principal Findings: The shift to MLTSS leads to a 2.5 percentage point (pp) increase (95% CI: 0.8 pp, 4.3 pp) in home care users, a 3-percentage point decrease (95% CI: -5.38 pp, -0.25 pp) in informal care users, and no statistically significant change in nursing home occupancy or health outcomes. We also find suggestive evidence of reductions in the number of home care individuals living in MLTSS states receive, with a 7.02-h (95% CI: -12.96, -1.07), or nearly 27% decrease, in monthly formal care received by this population. Conclusion: These findings suggest that MLTSS increased the share of home and community-based services (HCBS) users but restricted the amount of HCBS used per beneficiary, with ambiguity around whether this occurred at the expense of beneficiaries.

This case-control study evaluates the impact of a hospitalization on credit scores for Medicaid beneficiaries in Louisiana stratified by sex, race, and ethnicity.

This cohort study assesses the association of implementation and reversal of Supplemental Nutritional Assistance Program (SNAP) work requirements with SNAP enrollment.

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This cross-sectional study compares average credit scores and unpaid medical and nonmedical debts in collections among Black, Hispanic, and White adults with Medicaid coverage.

Health plans for the poor increasingly limit access to specialty hospitals.We investigate the role of adverse selection in generating this equilibrium among private plans in Medicaid.Studying a network change, we find that covering a top cancer hospital causes severe adverse selection, increasing demand for a plan by 50% among enrollees with cancer versus no impact for others.Medicaid's fixed insurer payments make offsetting this selection, and the contract distortions it induces, challenging, requiring either infeasibly high payment rates or near-perfect risk adjustment.By contrast, a small explicit bonus for covering the hospital is sufficient to make coverage profitable.

The Affordable Care Act Marketplaces may improve access to dental insurance, but little is known about the availability of such coverage. We used data from state and federal Marketplace sources to describe the availability of adult dental plans, including Stand-alone Dental Plans and those embedded in medical plans. We also examined the characteristics of counties with limited dental insurer participation and those that experienced a net loss of Stand-alone Dental Plan insurers between 2016 and 2023. We found that in 2023, at least one Stand-alone Dental Plan was offered in every state, and thirty-six states offered embedded dental plans. Most counties (63.6 percent) had access to more than five insurers offering adult dental plans, whereas approximately 4 percent had only one insurer offering adult dental plans. Counties in state-based Marketplaces, rural areas, and dentist shortage areas were more likely to be counties with limited dental insurer participation. The net loss of Stand-alone Dental Plans between 2016 and 2023 was more common in state-based Marketplaces and disadvantaged counties. Our findings can inform future policies to improve the dental insurance Marketplace and access to affordable dental care.

Importance:Several state Medicaid agencies have transitioned from traditional fee-for-service to a value-centric alternative payment model (APM) to reimburse federally qualified health centers (FQHCs). Little is known about the effects of this shift on FQHC performance. Objective:To assess the association between APMs and the clinical performance, payer mix, risk profile, and financial sustainability of FQHCs. Design, Setting, and Participants:This retrospective cohort study was performed in 684 FQHCs (representing 37 states plus the District of Columbia) that continuously operated between January 2009 and December 2021. Data on payer mix (eg, type of insurance) and risk profile (eg, proportion of patients with chronic conditions) of FQHC patients were obtained from the Uniform Data System, and clinic-level financial data (eg, revenue) were obtained from Internal Revenue Service form 990 tax documents. Data were analyzed between November 2022 and October 2023. Exposure:Initial rollout of a value-based payment model (ie, an APM) for FQHCs, as offered by state Medicaid program, between January 2013 and December 2021. Main Outcomes and Measures:The main outcomes were 4 audited process measures of health care quality (cervical and colorectal cancer screening and body mass index [BMI] assessment for adults and children) and 2 intermediate health outcome measures (hypertension control and diabetes control). A difference-in-differences design was used with staggered implementation comparing FQHCs before and after the initial APM rollout vs contemporaneous changes in FQHCs in states without APMs. Results:A total of 684 FQHCs (8892 FQHC-years) that served 17 823 959 patients in 2021 (57.3% female) were included in the study. Among FQHCs in states implementing APMs, significant differential increases in 3 of the 4 process quality measures were observed compared with FQHCs in states that did not implement an APM: colorectal cancer screening (3.24 percentage points [pp]; 95% CI, 1.40-5.08 pp), adult BMI (3.19 pp; 95% CI, 0.70-5.68 pp), and child BMI (4.50 pp; 95% CI, 1.83-7.17 pp). There were also modest differential improvements in blood pressure control for individuals with hypertension (1.02 pp; 95% CI, 0.04-2.00 pp) and blood glucose control for individuals with type 2 diabetes (1.02 pp; 95% CI, 0.02-2.02 pp) compared with FQHCs in states without an APM. There was no evidence that the APM rollout was associated with clinics selecting healthier patients (-0.01 pp; 95% CI, -0.21 to 0.19 pp) or stinting on care (-0.02 visits; 95% CI, -0.08 to 0.04 visits). Conclusions and Relevance:In this cohort study, introduction of Medicaid APM options for FQHCs was associated with modest, statistically significant increases in quality concentrated among FQHCs with APM models that explicitly incentivized quality. This finding suggests that APMs can be both a financially viable and a health-promoting model for reimbursement in the health care safety net.

ImportanceMedicare provides nearly universal insurance coverage at age 65 years. However, how Medicare eligibility affects disparities in health insurance coverage, access to care, and health status among individuals by sexual orientation and gender identity is poorly understood.ObjectiveTo assess the association of Medicare eligibility with disparities in health insurance coverage, access to care, and self-reported health status among individuals by sexual orientation and by gender identity.Design, Setting, and ParticipantsThis cross-sectional study used the age discontinuity for Medicare eligibility at age 65 years to isolate the association of Medicare with health insurance coverage, access to care, and self-reported health status, by their sexual orientation and by their gender identity. Data were collected from the Behavioral Risk Factor Surveillance System for respondents from 51 to 79 years old from 2014 to 2021. Data analysis was performed from September 2022 to April 2023.ExposuresMedicare eligibility at age 65 years.Main Outcomes and MeasuresProportions of respondents with health insurance coverage, usual source of care, cost barriers to care, influenza vaccination, and self-reported health status.ResultsThe study population included 927 952 individuals (mean [SD] age, 64.4 [7.7] years; 524 972 [56.6%] females and 402 670 [43.4%] males), of whom 28 077 (3.03%) identified as a sexual minority—lesbian, gay, bisexual, or another sexual minority identity (LGB+) and 3286 (0.35%) as transgender or gender diverse. Respondents who identified as heterosexual had greater improvements at age 65 years in insurance coverage (4.2 percentage points [pp]; 95% CI, 4.0-4.4 pp) than those who identified as LGB+ (3.6 pp; 95% CI, 2.3-4.8 pp), except when the analysis was limited to a subsample of married respondents. For access to care, improvements in usual source of care, cost barriers to care, and influenza vaccination were larger at age 65 years for heterosexual respondents compared with LGB+ respondents, although confidence intervals were overlapping and less precise for LGB+ individuals. For self-reported health status, the analyses found larger improvements at age 65 years for LGB+ respondents compared with heterosexual respondents. There was considerable heterogeneity by state in disparities by sexual orientation among individuals who were nearly eligible for Medicare (close to 65 years old), with the US South and Central states demonstrating the highest disparities. Among the top-10 highest-disparities states, Medicare eligibility was associated with greater increases in coverage (6.7 pp vs 5.0 pp) and access to a usual source of care (1.4 pp vs 0.6 pp) for LGB+ respondents compared with heterosexual respondents.Conclusions and RelevanceThe findings of this cross-sectional study indicate that Medicare eligibility was not associated with consistently greater improvements in health insurance coverage and access to care among LGBTQI+ individuals compared with heterosexual and/or cisgender individuals. However, among sexual minority individuals, Medicare may be associated with closing gaps in self-reported health status, and among states with the highest disparities, it may improve health insurance coverage, access to care, and self-reported health status.

Leveraging the random assignment of over 50,000 Medicaid enrollees in New York, I present causal evidence that narrower networks are a blunt instrument for reducing health care spending. While narrower networks constrain spending, they do so by generating hassle costs that reduce quantity, with modest effects on prices paid to providers. Enrollees assigned to narrower networks use fewer of both needed and unneeded services and are less satisfied with their plans. Using my causal estimates to construct counterfactuals, I identify an alternative assignment policy that reduces spending without harming satisfaction by matching consumers with narrower networks that include their providers. (JEL H51, H75, I13, I18, I38)

We use a five percent sample of Americans' credit bureau data, combined with a regression discontinuity approach, to estimate the effect of universal health insurance at age 65-when most Americans become eligible for Medicare-at the national, state, and local level. We find a 30 percent reduction in debt collections-and a two-thirds reduction in the geographic variation in collections-with limited effects on other financial outcomes. The areas that experienced larger reductions in collections debt at age 65 were concentrated in the Southern United States, and had higher shares of black residents, people with disabilities, and for-profit hospitals.