Medicaid of Minnesota

On July 30, 1965, President Lyndon B. Johnson signed into law legislation that led to the establishment of Medicare and Medicaid. Together, these programs currently provide health care coverage to about 42 percent of the nation’s population, with Medicaid serving 24 percent.

In 1966, Minnesota implemented the state’s Medicaid program, which is called Medical Assistance. Today, it covers one out of every five Minnesotans. As the third largest insurer in the state after self-insured employer-based coverage and Medicare, it makes up nearly 16 percent of the state’s health insurance market.

How are Medicaid services purchased and delivered?

The most common methods of payment in Medicaid programs:

* Fee for service, where the state directly pays providers a flat fee for each service delivered.
* Managed care, where the state contracts with health plans and pays them a monthly per member capitation payment to provide all covered services.

Other payment arrangements with providers, care systems and partner organizations, referred to as accountable care organizations or models, are also growing in Medicaid as the health care system moves to pay for better health outcomes. A few states have implemented innovative models of service delivery and provider payment — such as Minnesota’s Integrated Health Partnerships — to reduce overall costs while improving enrollee outcomes.