Investors See Opportunity in High-Needs Medicaid Market

A cooling market for Medicare Advantage has some investors seeing opportunities in Medicaid. Investors have long been drawn to Medicare Advantage, but that segment has become crowded, dominated by a handful of big companies and less appealing amid regulatory changes. At the same time, states have invited innovation by creating incentives to attract companies willing to take on high-risk Medicaid beneficiaries. “Most of the innovation is happening in states with Medicaid managed care plans, because those care plans are able to capitate out the risk and create new incentives for innovative providers, whereas the fee-for-service states don’t necessarily have the flexibility or haven’t done as many innovative things to enable these creative models,” said Russell Street Ventures CEO Brad Smith.

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