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As Medicaid Programs Evolve, New Report Highlights Foundational Role of Actuarially Sound Rates for MCOs
FOR IMMEDIATE RELEASE: December 10, 2025
FOR MORE INFORMATION: Marty Johnson, (202) 420-7424; mjohnson@communityplans.net
As Medicaid Programs Evolve, New Report Highlights Foundational Role of Actuarially Sound Rates for MCOs
WASHINGTON—As Medicaid programs around the country brace for cuts in federal funding, a new report from the Association for Community Affiliated Plans (ACAP) details the ways in which actuarially sound rates form the foundation of well-functioning Medicaid managed care programs.
To be successful, ACAP-member Safety Net Health Plans (SNHP)—which, compared with their for-profit counterparts, spend a higher percentage of their Medicaid premiums on member medical expenses—must balance efficiency with high-quality care.
MCOs’ work is dependent on actuarially sound rates that reflect the true cost of care by accounting for price of medical services provided as well as the frequency with which they occur. Actuarial soundness in rate setting not only optimizes payments to health plans but also creates stability for state Medicaid programs and consistent access to care for patients.
However, this equation is becoming harder to balance for SNHPs nationwide thanks to the rising demand and cost of care in addition to new policies set to come online next year through the implementation of H.R. 1.
“Between work requirements, shorter redetermination periods, reduced eligibility, and wholesale changes to Medicaid financing and reimbursement, preparing for H.R. 1 implementation is a significant challenge for our member plans,” said Margaret A. Murray, CEO, ACAP.
“ACAP is fully committed to helping all of our member plans navigate these changes to assure that the people our Safety Net Health Plans serve retain coverage—and access to the care they need and deserve.”
The report urges CMS to strengthen its oversight of states’ rate-setting practices and transparency to ensure Medicaid managed care plans can sustainably deliver on their promise to members.
Read the full report here.
ABOUT ACAP
ACAP represents 86 health plans, which collectively provide health coverage to more than 30 million people. Safety Net Health Plans serve their members through Medicaid, Medicare, the Children’s Health Insurance Program (CHIP), the Marketplace and other publicly-sponsored health programs. For more information, visit communityplans.net.
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