President Clinton and many other elected officials have proposed that managed competition be the cornerstone of health care reform. However, experiences of Medicaid recipients with managed care plans are at best mixed. These capitated programs report higher costs than do fee-for-service arrangements. Fortunately, these additional expenditures are partially offset by at least a perception of improved access to care. Due to difficulties in determining eligibility, delivering benefits, paying for needed services, and similar concerns, providing care for the poor and underserved will be complicated and expensive for the proposed sponsors of managed competition plans.