Increased acuity, cost trends remain headwinds for managed medicaid

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<title>Increased acuity, cost trends remain headwinds for managed medicaid</title>
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<namePart>A.M. Best Company</namePart>
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<dateIssued>2025</dateIssued>
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<abstract displayLabel="Summary">The report analyzes the financial and operational challenges facing the Managed Medicaid segment in the United States, which posted a $3 billion underwriting loss in 2024the first in decades. This downturn is attributed to rising medical costs, increased patient acuity, and declining enrollment following the expiration of the Public Health Emergency. A mismatch between pricing and risk profiles has emerged, as healthier individuals have left the Medicaid rolls, leaving a higher-cost population. Behavioral health, home care, and expensive drugs have further strained medical loss ratios, which rose to 92.3%. Smaller and less diversified insurers are particularly vulnerable, especially as new legislation like the One Big Beautiful Bill Act introduces work requirements and shifts financial responsibility to states. With many companies heavily concentrated in Managed Medicaid, the segment may not return to profitability until 2026 or later</abstract>
<tableOfContents displayLabel="Contents">Principal takeaways -- Underwriting loss for Managed Medicaid in 2024 -- Acuity and pricing mismatch as healthier people leave rolls -- Financial review -- Adverse impacts across the industry -- New legislation adds further pressure -- Concentrated companies in tougher position</tableOfContents>
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<topic>Sistemas sanitarios</topic>
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<topic>Medicaid</topic>
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<topic>Salud pública</topic>
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<geographic>Estados Unidos</geographic>
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<title>Best's special report</title>
<partNumber>October 14, 2025</partNumber>
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