Trends in Medicaid Managed Care Market Consolidation in the United States: A Cleaning Algorithm

In the United States, health insurance for low-income families is largely provided through a government program called Medicaid. While the government pays the bills, it does not usually run the health plans itself. Instead, it contracts with private companies known as managed care organizations to deliver care to millions of people. These companies operate in specific regions, offering different plans to families who need them. Because these companies are businesses, they sometimes merge with one another or buy smaller competitors. When this happens, the market becomes more concentrated, meaning fewer companies control more of the available options. Understanding whether these markets are becoming more crowded with choices or more dominated by a few large players is vital. If a handful of companies control most of the plans, it could change how much care costs, how easy it is to find a doctor, and the overall quality of health services for vulnerable populations.

For years, researchers have wanted to track these changes over time using a specific government report called the Medicaid Managed Care Enrollment Report. This document lists every health plan available in every state and how many people are signed up for them. However, using this report has been like trying to read a map where the city names keep changing spelling every year. One year, a company might be listed as "Blue Cross Health Plan," and the next year, the same company might appear as "BCBS Health" or "Blue Cross of the Midwest." Because the names are so inconsistent, it has been difficult to tell if a plan is actually new, if an old plan has been renamed, or if two different entries are actually the same company. This confusion made it hard to see the true picture of whether the market was consolidating or staying the same.

To solve this problem, a team of researchers from Boston University and Emory University developed a new method to clean up this messy data. They treated the list of plan names like a library catalog that needs to be organized. They created a step-by-step process to standardize the names, fixing small errors like capitalization and spacing first. Then, they looked for bigger changes, such as when a company drops a word like "Health" from its name or changes a brand name slightly. Finally, they used a database of corporate ownership to trace every plan back to its ultimate parent company, ensuring that a subsidiary like "Aetna" was correctly linked to its parent, "CVS Health." By applying this rigorous cleaning process to data from eleven different states between 2016 and 2021, the researchers could finally track the same plans and companies across multiple years with much greater accuracy.

Once the data was cleaned, the researchers looked for four specific signs of market consolidation. First, they counted how many unique parent companies were operating in each state. Second, they counted the total number of unique health plans available. Third, they calculated the average number of plans offered by each parent company. Fourth, they measured how much of the total market was controlled by the five largest publicly traded companies in the industry. By comparing these numbers over time, they could see if the market was shrinking, if fewer companies were offering more plans, or if a small group of giants was taking over.

The results showed that the story of consolidation varies significantly depending on where you look. In some states, such as New Mexico, Wisconsin, Washington, and Texas, the data clearly pointed toward consolidation. In these places, the number of available plans and the number of parent companies tended to go down, while the share of the market held by the top five firms went up. This suggests that in these regions, fewer companies are controlling more of the options for Medicaid recipients. In other states, like Maryland and Indiana, the opposite appeared to be true. The number of plans and parent companies increased, suggesting that new competition was entering the market rather than existing players merging. In several other states, the trends were mixed or remained relatively stable, with no dramatic shifts in market power.

The researchers also found that their cleaning method was essential for getting these details right. Without the cleaning process, the data was too noisy to see clear trends. For example, in some states, the raw data suggested wild swings in the number of companies, but the cleaned data showed that these were just naming errors. The cleaning process revealed that while the total number of plans remained fairly steady in most places, the ownership behind them was shifting. In a few states, the share of the market held by the five largest firms jumped significantly, such as in Kentucky where it rose from 60 percent to over 80 percent in a single year. This kind of precise tracking was only possible because the researchers could confidently say that a plan listed in 2016 was the same entity as a plan listed in 2021.

This study does not claim to have solved every mystery about the Medicaid market, nor does it measure the exact financial power of these companies, as the data does not allow for a perfect calculation of total market share. However, it provides a reliable, repeatable way to look at how the landscape is changing. The work demonstrates that by carefully organizing the data, researchers can move past the confusion of inconsistent names and see the real trends in how health care is delivered to low-income families. The findings suggest that while some states are seeing a tightening of the market with fewer players, others remain competitive or are even seeing new entrants. This clarity is a necessary step for policymakers who need to understand whether the current system is working well for the people it is meant to serve.