Medi-Cal and Managed Care: Risk, Costs, and Regional Variation

California has launched a new effort to expand the use of managed care within Medi-Cal.  Under the “two-plan” model, enrollees in 11 counties must choose either a private commercial plan or one organized and operated by the county.  The implementation of this model has raised several questions about the fit between Medi-Cal and private managed care.  This study analyzes and compares the resources used by Medi-Cal enrollees and a sample of privately insured employees.  It also investigates Medi-Cal resource use by county, thereby allowing for regional comparisons.  It finds that the two-plan model is practical, but that risk-adjusted rates for short-term and high-risk Medi-Cal clients may improve its long-term success.