Incentives, Challenges, and Reforms for Medicaid Cost Containment

States are incentivized to spend more on Medicaid programs due to the structure of incentives, even though they cover a portion of the expenses. Reforming the program could involve giving beneficiaries more accountability through programs such as health savings accounts. Turning over the management of Medicaid to managed care organizations may not be effective due to limited beneficiary copays and lack of flexibility. Promising reform strategies include telehealth and utilizing nurse practitioners to reduce costs.