Medicaid confronts a changing managed care marketplace.

After two decades of concerted efforts, more than one-half of all Medicaid beneficiaries are now enrolled in managed care arrangements. Most States appear strongly committed to continued reliance on managed care, but the contemporary managed care marketplace is undergoing a number of significant changes. We describe how several of these developments are being revealed in commercial managed care and discuss implications for Medicaid purchasers and beneficiaries. State Medicaid agencies will have to adapt managed care strategies to respond to the evolving products and practices of managed care plans and their interest in public sector product lines.