Medicaid reinvestment requirements can improve community health and equity

In the past few years, multiple states have implemented new policies requiring Medicaid managed care plans (MCPs) to reinvest a percentage of revenue or profit back into the communities they serve. The majority of these policies have been enacted as part of contracting processes for MCPs, indicating that the margins on Medicaid lines of business are significant enough to accommodate such investments. These investments are required to be non-duplicative with any allowable Medicaid expense—the intent is to invest in strategies outside the health care service delivery infrastructure that are likely to have a positive impact on health, safety, and equity at a population scale. This is one of many developments in Medicaid policy and practice that reflect a willingness to address individual social needs and a deepening commitment to invest in positively impacting social determinants of health (SDoH). Reinvestment funding is also a potentially important development and source of funding for community-based organizations and local government agencies that are advancing strategies to address SDoH and health equity.