As medical students, we often witness the devastating effects of a broken health care system on our patients. Recently, one of us was caring for a young patient on Medicaid in the hospital who had been suffering from debilitating pain for over a year. For months, she struggled to identify in-network providers, bouncing from waitlist to waitlist for various specialists, growing increasingly frustrated by her inability to get appropriate care. When she was often referred to a new doctor or ordered a new diagnostic test, her Medicaid managed care organization (MCO) would inform her that the doctor was out-of-network or that the test was not covered, delaying her diagnosis and prolonging her suffering. She was ultimately diagnosed with cancer and required surgery for treatment. While she was thankfully able to receive this life-saving care, the impediments from her Medicaid MCO prolonged her pain, incurred significant health care costs and could have allowed her cancer to spread, necessitating extensive treatment and risking possible death.
While tragic, stories like this are unfortunately common. Maryland provides Medicaid beneficiaries access to care through managed care organizations (MCOs) or corporate middlemen who are supposed to “reduce Medicaid program costs and better manage utilization of health services.” However, because they receive Medicaid funds upfront, they are incentivized to delay and deny care, using bureaucratic hurdles such as prior authorizations to generate profits. Recently, they have even begun using automated systems to deny cases en masse without ever opening these requests. Yet, when patients or clinicians appeal, and a human reviews the case, the denial is reversed over half the time, indicating that it was wrongly issued. This administrative red tape not only harms patients but also leads to clinicians leaving the Medicaid program, limiting beneficiaries’ choice in doctors. Additionally, Medicaid MCOs, ironically marketed as “HealthChoice,” already restrict beneficiaries’ options with narrow provider networks.
And yet, for all its trouble, Medicaid managed care is not even delivering its promised cost savings. Instead, these profit-seeking MCOs keep roughly 13 cents of every taxpayer-funded Medicaid dollar they receive, while beneficiaries see their cost-sharing and bills go up. Medicaid does not need to be administered this way. Transitioning to a single, state-run program using a fee-for-service model (in which the state pays clinicians directly for their services) would actually reduce costs to an estimated maximum of 4 to 6 cents in administrative overhead on the dollar. And Maryland would not be the first state to make this shift.
After it eliminated MCOs from its Medicaid system in 2012, Connecticut’s overhead costs have declined to 3.8%, with reports estimating overall savings of over $4 billion in the 13 years following implementation. Doing away with MCOs’ administrative waste and profit was not the only source of these savings. Rather, the resulting improvements in primary care delivery and care coordination had profound impacts. Removing MCOs led to increased physician participation in Medicaid, providing Medicaid patients with better access to primary care and preventative services. Consequently, ER visits and hospitalizations, some of the most expensive health care services, declined, since patients were being seen and treated before their conditions became critical.
The future of Maryland’s health and of our state budget can benefit greatly by following Connecticut’s lead. With 1.5 million Marylanders covered by Medicaid, and 85% of those individuals enrolled in one of the state’s nine MCOs, it is estimated that a shift to a unified Medicaid program could save Maryland taxpayers up to $521 million annually. All while preventing patients like ours from experiencing disastrous delays in care.
Maryland is facing a Medicaid crisis following the 2025 Budget Reconciliation Act which will reduce federal Medicaid funding by $1 trillion nationwide over the next 10 years. However, a bill currently advancing in the state House of Delegates, HB1112, requires the Maryland Health Insurance Coverage Protection Commission to formally investigate how removing MCOs and adopting a fee-for-service model for Medicaid can help the state respond to these impending funding cuts. Passing this bill can serve to protect Medicaid enrollees, reduce physician burnout, increase Medicaid utilization and improve the health and finances of our state. As a Marylander, make your voice heard by calling or emailing your state delegates to share your story and support for HB1112.
Hope Zamora, Rohan Jaiswal, and Amanda Andriessen are medical students at The Johns Hopkins School of Medicine.
