Not only are millions more signing up for private sector Medicaid plans, but 1.4 million fewer are now enrolled in publicly-managed Medicaid plans. 

The report attributes the trend towards private sector Medicaid management to states seeking cost certainty in the midst of tight budgets. Private insurers in Illinois now provide coverage for 62 percent of Medicaid enrollees, up from 12 percent the previous year. In conservative Mississippi, the private sector's share of the Medicaid market similarly increased from 21 percent to 66 percent. 

In some states, all or almost all Medicaid services come through private insurers. Surprisingly, whether a state relies heavily on the private sector does not appear linked to its politics. All Medicaid enrollees in Hawaii, a strong Democratic state, get their care through private plans, as do beneficiaries in Tennessee, a Republican stronghold.   

States with no privately-managed Medicaid plans are similarly diverse politically. They include liberal bastions, such as Vermont, Connecticut and Maine, as well as deeply conservative states, such as Oklahoma, Alaska and Alabama. 

The report points out that Medicaid plans are still mostly crafted specifically for states or even smaller locales. Ninety percent of all plans operate in only one state. The average Medicaid plan has 139,000 members, while there are a dozen plans that boast over 1 million. 

Despite the recent gains for the insurance industry facilitated by the Medicaid expansion, the report warns that opportunity in the Medicaid market is quickly drying up. Some states that previously declined the expansion are reconsidering their decision, often with plans to shift Medicaid enrollees to the private sector, but the report says that those enrolling in the future may not translate into profits for insurers. 

"A natural ceiling exists before the only available populations left are in rural, difficult to manage geographies and some of the most complex and difficult care groupings," the report stated.