U.S. Healthcare Facilities & Managed Care: Takeaways from Discussion with Regional Health Plan CFO

Research evidence excerpt

U.S. Healthcare Facilities & Managed Care: Takeaways from Discussion with Regional Health Plan CFO

ecutive year of rate cuts (April 1 cycle). Indiana remains the most challenged

market, with rates materially insufficient. CareSource’s MLR is running in the high-90s% range

versus a 93% risk corridor attachment point. While downside risk is currently mitigated by the

corridor, the expert estimates a 20–30% rate increase would be required to restore a sustainable

margin profile and noted that a potential state exit is now under consideration given the current

operating environment.

FIGURE 2. GA, OH, IN MCO Exposure

CNC CVS ELV HUM MOH UNH

Georgia 631 0 426 0 0 0

% of Total 5% 0% 6% 0% 0% 0%

Ohio 339 27 207 173 264 278

% of Total 3% 1% 3% 12% 7% 5%

Indiana 292 0 606 33 0 48

% of Total 3% 0% 9% 2% 0% 1%

Source: HMA

Medicaid Work Requirements: Heading into 2027 work requirement implementation, the

expert had initially expected 2025–2026 redeterminations to absorb a portion of the eventual

membership impact. However, the expansion population (22% of CareSource’s book) has

remained relatively stable, suggesting incremental attrition could be higher than previously

anticipated once work requirements take effect. That said, the expert believes much of the

acuity deterioration has already been realized in 2025–2026, which could limit incremental

acuity pressure going forward. At a national level, the expert expects a 40–50% reduction in the

expansion population (20–21 mn adults nationally), representing roughly 30% of the total adult

Medicaid population.

2026 ACA Attrition: Through May, CareSource has experienced 29% membership attrition,

modestly better than its initial expectation of 40%. The expert believes the book has been