The Bottom Line

Consolidation moves onto next stage

Mixed financial performance across MCOs

Regulatory impacts clarifying

Executive Summary

The fourth quarter of 2018 allowed for both a clarification of several issues that emerged throughout the year and new information on pending issues related to the CMS re-write of the 2016 Medicaid managed care rule (aka the "Mega-Reg"). Litigation around work requirements dominated the news cycles, but many plans report that initial operational concerns were overblown. Most MCO parent firms experienced continued growth as measured in the stock markets (with the exception of Cigna). Private investment dollars continue to flow into the Medicaid IT space, with a new cycle of telemed investment launching in 2018. This translated into a surge in vendor sales activity but so far has not converted into new pilots in the states.  The current MCO growth model focused on PBM integration began to finalize with key federal approvals closing. Finally, Medicaid expansion was passed on the ballot in several states, but the real work of budget allocation for new Medicaid spending will begin in earnest in statehouses January 2019.

Latest MCO CEO survey results

  • Social Determinants
  • Contracting with community organizations
  • Contracting with states
  • Resource drain of vendor sales meetings
  • Work requirements (operational lift)
  • Rate certification process
  • ​Next stage in value-based care
  • Integration for behavioral health
  • Consolidations, especially via PBMs
  • Tech investment ROI

Industry Interviews

Each issue we interview a Medicaid Managed Care executive and an Investment Leader

John Lovelace

President, Government Programs and Individual Advantage at UPMC Health Plan

Brett Moraski

Operating Partner at Frazier Healthcare

MCO Financial Performance


Summary statement. 

  • All traded MCOs experienced strong growth on stock price, with the exception of Cigna.
  • Molina stock showed the most volatility in the period, but was paired with strong growth path. 
  • Earnings call summaries INFO 
  • Other point
  • Other point
  • Other point

Rolling 12 Month Volatility

Rolling 12 Month Directional Assessment

Note 1: All data for latest reported quarter

Note 2: Detailed analysis includes additional financials and earnings calls summaries. 

Note 3: All $s in $B

Latest MCO Financials


Gross Profit

Earnings Before Interest and Taxes

Detailed Analysis











A Quick Glance At Key Regulations With Possible Impact to Medicaid Plans
  • Changes to Managed Care Reg
  • New guidance on 1332 waivers
  • ACA unconstitutional ruling
  • KY work requirements round 2
  • Public charge rule changes

Merger and Acquisitions Activity 

  • Social Determinants
  • Contracting with community organizations
  • Contracting with states
  • Rate certification process
  • ​Next stage in value-based care
  • Integration for behavioral health

Investment News

A Quick Glance At Key Deals in PE/VC Arena With Possible Impact to Medicaid Plans
  • Veritas buys Athena health for $5.7B
  • Clearlake to acquire Symplyr; invests in OnShift
  • Civitas Solutions looking for buyers
  • ABA provider Action Behavior Centers completes latest funding round
  • Quick Med Claims completes new funding round with PWP

Vendor Reviews

Your staff are constantly asked to sit through vendor demos and pitch meetings. Is it worth the time? 

Our simple grid below helps you decide. 

Vendor Name


Overall Assessment

Detailed Analysis


Using our R-Y-G scoring system

Evaluation methodology