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What Drives Spending and Utilization on Medicaid Drug Benefits in States?

December 20, 2014 Comments off

What Drives Spending and Utilization on Medicaid Drug Benefits in States?
Source: Kaiser Family Foundation

Medicaid is one of the country’s biggest payers for prescription drugs, but because prescription drugs have accounted for a small share of total Medicaid spending, Medicaid’s pharmacy benefit policies have not been at the top of mainstream healthcare policy debate. However, with the approval of new specialty drugs, such as the Hepatitis C treatment Sovaldi, states are mindful that the price tag for the Medicaid drug program could increase significantly. While states have implemented many cost-saving policies targeting their Medicaid prescription drug benefits, there remains room for additional cost savings, better management, and improved health outcomes. To ensure appropriate policy for this central benefit and achieve these goals, it is important to understand which drugs are most frequently prescribed and which drive spending.

Using state drug utilization data, as well as an industry drug database, this issue brief examines trends in Medicaid drug prescriptions and drug spending before rebates from 2010 through 2012.1 As part of the Medicaid drug benefit, manufacturers provide rebates to the state and federal government. However, rebates are based on proprietary data and they are not available to the public at the drug level. As a result we are unable to include them, or use this data to calculate total Medicaid drug spending. After presenting this analysis, we place these findings in the context of policy discussions. Key findings of the analysis include:

  • Comprising 35% of prescriptions and 34% of spending before rebates in 2012, Central Nervous System Agents, a class of drugs that include pain killers, antidepressants, and antipsychotics, constitute the largest share of Medicaid drug utilization and spending. Within this drug class, pain killers and fever reducers represent a third of utilization.
  • Specialty drugs account for just two percent of drug utilization in 2012, but they comprise 28% of drug spending. This share increased from 2010 when they totaled 24% of drug spending before rebates. The specialty drug share of total drug spending varies at the state level.
  • Brand-name drugs account for a disproportionate amount of drug spending. In 2012, they accounted for 20% of Medicaid drug prescriptions but 76% of spending. In the past three years, the share of Medicaid drugs that are generic has risen slightly, possibly due to a number of blockbuster brand drugs losing their exclusivity and facing generic competition in the past several years.
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National Trends in the Cost of Employer Health Insurance Coverage, 2003–2013

December 19, 2014 Comments off

National Trends in the Cost of Employer Health Insurance Coverage, 2003–2013
Source: Commonwealth Fund

Looking at trends in private employer-based health insurance from 2003 to 2013, this issue brief finds that premiums for family coverage increased 73 percent over the past decade—faster than median family income. Employees’ contributions to their premiums climbed by 93 percent over that time frame. At the same time, deductibles more than doubled in both large and small firms. Workers are thus paying more but getting less protective benefits. However, the study also finds that while premiums continued to rise through 2013, the rate of growth slowed between 2010 and 2013, following implementation of the Affordable Care Act. While families experienced slower growth in premium contributions and deductibles over this period, sluggish growth in median family income means families are paying more in premiums and deductibles as a share of their income than ever before.

The Uninsured: A Primer – Key Facts About Health Insurance and the Uninsured in America

December 19, 2014 Comments off

The Uninsured: A Primer – Key Facts About Health Insurance and the Uninsured in America
Source: Kaiser Family Foundation

Millions of people in the United States go without health insurance each year. Because nearly all of the elderly are insured by Medicare, most uninsured Americans are nonelderly (below age 65). A majority of the nonelderly receive their health insurance as a job benefit, but not everyone has access to or can afford this type of coverage. Together, Medicaid and the Children’s Health Insurance Program (CHIP) fill in gaps in the availability of coverage for millions of low-income people, in particular, children. However, Medicaid eligibility for adults remains limited in some states, and few people can afford to purchase coverage on their own without financial assistance.

The gaps in our health insurance system affect people of all ages, races and ethnicities, and income levels; however, those with the lowest incomes face the greatest risk of being uninsured. Being uninsured affects people’s access to needed medical care and their financial security. The access barriers facing uninsured people mean they are less likely to receive preventive care, are more likely to be hospitalized for conditions that could have been prevented, and are more likely to die in the hospital than those with insurance. The financial impact also can be severe. Uninsured families struggle financially to meet basic needs, and medical bills can quickly lead to medical debt.

New Report Proposes Better Outcomes, Lower Costs for State and Local Governments Through User Fees

December 19, 2014 Comments off

New Report Proposes Better Outcomes, Lower Costs for State and Local Governments Through User Fees
Source: Cascade Policy Institute

A new report released by Cascade Policy Institute suggests numerous ways state and local governments can lower the costs of public services through judicious, targeted use of “user fees,” rather than relying on general taxation. Resurrecting User Fees in Public Finance: A Prescription for Lowering the Cost and Improving the Fairness of Public Services was authored by Randall Pozdena, Ph.D. Pozdena is president of QuantEcon, Inc., an Oregon-based consultancy.

The share of personal income collected as revenue by state and local governments has doubled since 1945. Oregon and other U.S. state governments obtain approximately 75 percent of this revenue through broad-based taxation and 25 percent from fees levied on the beneficiary of the service.

This report details the theoretical and practical advantages of reducing reliance on broad-based taxation in favor of user charges. It reviews the economic philosophy of reliance on user charges versus broad-based finance and the findings of the public finance literature.

Retirement Benefit Decisions by City and County Governments

December 19, 2014 Comments off

Retirement Benefit Decisions by City and County Governments
Source: Center for State & Local Government Excellence

Key findings:

  • Workers who work a full career in their city or county can expect a retirement income of between 45 and 80 percent of their pre-retirement income.
  • Career employees of local governments who participate in Social Security can expect retirement income replacement rates of 20 to 30 percentage points higher than employees whose governments do not participate in Social Security.
  • These and other variations mean that many local workers will need to be disciplined about participating in savings plans, outside of their primary plans, to meet their retirement security goals.

A ‘Freer’ Flow of Skilled Labour within ASEAN: Aspirations, Opportunities, and Challenges in 2015 and Beyond

December 19, 2014 Comments off

A ‘Freer’ Flow of Skilled Labour within ASEAN: Aspirations, Opportunities, and Challenges in 2015 and Beyond
Source: Migration Policy Institute

Countries’ competitiveness, productivity, and growth depend largely on their ability to acquire and use new knowledge and constantly upgrade the skills of their workforces. Many countries do not, however, have the educational systems necessary to cultivate the kind of workforces they need, and in developing countries it is common for the most highly skilled workers to emigrate for job opportunities abroad.

Over the past decade, the Association of Southeast Asian Nations (ASEAN), a political and economic organization of ten countries in Southeast Asia, began to tackle these issues directly. In 2007, ASEAN Member States agreed to fast-track the creation of the ASEAN Economic Community (AEC) by 2015, which is meant to transform the region into a single market and production base characterized by, among other things, a free flow of skilled labor. In response to the mounting evidence that migrants in the region lack the skills recognition required to put their knowledge and training to use in destination countries, ASEAN Member States are taking steps toward better qualifications recognition to prevent the resulting waste of human capital.

Trends in State Financial Aid: Actions from the 2013 and 2014 legislative sessions

December 18, 2014 Comments off

Trends in State Financial Aid: Actions from the 2013 and 2014 legislative sessions (PDF)
Source: Education Commission of the States

Key takeaways from this report

  • Trends in enacted policy include changes to need- and merit-based programs, linking financial aid and workforce outcomes, and focusing aid on transfer student pathways.
  • States are playing an increasing role in loan repayment assistance or forgiveness policies, with at least four states enacting programs.
  • A growing number of states — with at least 10 joining in the 2013 and 2014 legislative sessions — are using financial aid programs as a means to incentivize workforce outcomes.
  • Five states passed legislation appointing commissions to extensively research college affordability issues, with reports due through spring 2015.
  • At least 10 states created or made changes to existing need-based programs.
  • Maryland and Virginia both enacted financial aid programs geared to students transferring from two- to four-year institutions.
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