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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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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.

Key Findings on Medicaid Managed Care: Highlights from the Medicaid Managed Care Market Tracker

December 15, 2014 Comments off

Key Findings on Medicaid Managed Care: Highlights from the Medicaid Managed Care Market Tracker
Source: Kaiser Family Foundation

States design and administer their own Medicaid programs within federal rules, and states and the federal government share Medicaid costs and have shared stakes in the program. One of the most important programmatic decisions that states make is how they will deliver and pay for care for Medicaid beneficiaries. Historically, states purchased services largely on a fee-for-service basis. However, since the early 1980s and particularly in recent years, states have increasingly used various models of managed care. The dominant model is comprehensive risk-based managed care, in which states contract with managed care organizations (MCOs) to provide comprehensive acute care, and in some cases long-term services and supports as well, to Medicaid beneficiaries, and pay the MCOs a fixed monthly premium or “capitation rate” on behalf of each enrollee. This model is called risk-based managed care because, through contracts, states shift the financial risk for serving their Medicaid beneficiaries to MCOs.

Today, 39 states contract with a grand total of about 265 MCOs to provide comprehensive Medicaid services; over 90% of Medicaid beneficiaries live in these 39 states. As of September 2014, more than half of all Medicaid beneficiaries nationwide were enrolled in MCOs, and the role of MCOs in Medicaid continues to grow, as an increasing number of states adopt risk-contracting programs, and states with existing programs expand them to include larger geographic areas and beneficiaries with more complex needs, shift from voluntary to mandatory enrollment in MCOs, and move long-term services and supports into capitated arrangements. In addition, states expanding Medicaid under the Affordable Care Act (ACA) are relying largely on MCOs to serve the millions of newly eligible adults. More broadly, the ACA expansions of both Medicaid and private health insurance are fueling dynamism in the managed care market as MCOs and large managed care companies position themselves to take advantage of new opportunities.

Medical and Prescription Drug Deductibles for Plans Offered in Federally Facilitated and Partnership Marketplaces for 2015

November 26, 2014 Comments off

Medical and Prescription Drug Deductibles for Plans Offered in Federally Facilitated and Partnership Marketplaces for 2015
Source: Kaiser Family Foundation

Most health plans require enrollees to pay a portion of the cost of care when they seek services. While there are lots of forms of cost sharing — deductibles, copayments, coinsurance – people often focus on the deductible amount because it often provides the simplest indication of how generous a plan may be. A deductible is the amount that an enrollee must pay toward the cost of covered services before the plan will start paying for most types of care covered by the plan. Certain preventive services must be covered without cost sharing in all plans in the Affordable Care Act’s Marketplaces, and insurers sometimes pay towards other services, usually physician office visits or prescription drugs, before the enrollee has met his or her deductible. Still, people need to be prepared for the fact that they may need to pay the entire deductible amount out of pocket if they need a significant amount of care during a year.

The slide show provides an initial look at the deductibles for medical care and the specific deductibles applied to prescription drugs for the plans offered in the federally facilitated and partnership Marketplaces available healthcare.gov. The amounts are simple averages of the plans available (see Methods). The amounts are shown separately by metal level (“Bronze,” “Silver,” “Gold,” and “Platinum”). Deductible amounts are shown separately for plans where medical spending and prescription drug spending are both subject to the same deductible (called “combined) and for plans where there are separate deductibles for medical spending and prescription drug spending (called “separate”). Not surprisingly, deductibles tend to decrease as one moves from the levels with lower actuarial values (“Bronze” and “Silver”) to the higher levels.

The slides do not show the deductibles for silver plans that provide reduced cost sharing for people with low incomes (e.g., people receiving cost-sharing subsidies). Many people in Marketplace plans receive these subsidies, and would not be subject to the deductible amounts shown in the slides. We will be releasing a more complete analysis that has information for these plans and for the other types of cost sharing (e.g., copayments, coinsurance amounts) in the near future.

Map: How Many Americans Could Lose Subsidies If the Supreme Court Rules for the Plaintiffs in King vs. Burwell?

November 20, 2014 Comments off

Map: How Many Americans Could Lose Subsidies If the Supreme Court Rules for the Plaintiffs in King vs. Burwell?
Source: Kaiser Family Foundation

This map based on Foundation analysis of Congressional Budget Office estimates of Marketplace enrollment provides a state-level breakdown of the number of Americans who in 2016 could be denied financial assistance to help pay insurance premiums for plans purchased in the Affordable Care Act’s federally operated insurance exchanges.

What Do We Know About Health Care Access and Quality in Medicare Advantage Versus the Traditional Medicare Program?

November 13, 2014 Comments off

What Do We Know About Health Care Access and Quality in Medicare Advantage Versus the Traditional Medicare Program?
Source: Kaiser Family Foundation

While the majority of Medicare beneficiaries still receive their benefits through the traditional Medicare program, 30 percent now obtain them through private health plans participating in Medicare Advantage. As the number of Medicare Advantage enrollees continues to climb, there is growing interest in understanding how the care provided to Medicare beneficiaries in Medicare Advantage plans differs from the care received by beneficiaries in traditional Medicare.

Despite the interest, the last comprehensive review of research evidence on health care access and quality in Medicare Advantage and traditional Medicare is more than 10 years old and did not focus exclusively on Medicare (Miller and Luft 2002). That study found that health maintenance organizations (HMOs) provide care that is roughly comparable in quality to the care provided by non-HMOs (mainly traditional indemnity insurance), and that quality varied across health plans. It also found that HMOs used somewhat fewer hospital and other expensive resources in delivering care, with enrollees rating them worse on many measures of access and satisfaction. However, the market has changed substantially over the last decade, making it important that policymakers have available more current analysis, particularly on Medicare health plans.

This literature review synthesizes the findings of studies that focus specifically on Medicare and have been published between the year 2000 and early 2014. Forty-five studies met the criteria for selection, including 40 that made direct comparisons between Medicare health plans and traditional Medicare. An additional five studies are included, even though they have no traditional Medicare comparison group, because they include a comparison of health care access and quality in different types of Medicare Advantage plans. A full list of the studies included in this analysis is found in the Works Cited.

Analysis of 2015 Premium Changes in the Affordable Care Act’s Health Insurance Marketplaces

November 12, 2014 Comments off

Analysis of 2015 Premium Changes in the Affordable Care Act’s Health Insurance Marketplaces
Source: Kaiser Family Foundation

With the second open enrollment period of the health insurance marketplaces approaching, this analysis provides an initial look at premium changes for marketplace plans for individuals in 15 states and the District of Columbia that have publicly released comprehensive data on rates or rate filings for all insurers.

The analysis examines premium changes for the lowest-cost bronze plan and the two lowest-cost silver plans in 16 major cities. The second-lowest cost silver plan in each state is of particular interest as it acts as a benchmark that helps determine how much assistance eligible individuals can receive in the form of federal tax credits. The findings show that in general, individuals will pay slightly less to enroll in the second-lowest cost plan in 2015 than they did in 2014, prior to the application of tax credits.

Although premium changes vary substantially across and within states, premium changes for 2015 in general are modest when looking at the low-cost insurers in the marketplaces, where enrollment is concentrated. While the analysis provides an early look at how competitive dynamics may be influencing health insurance premiums, it is important to bear in mind that the overall picture may change as comprehensive data across all fifty states becomes available.

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