Trends in Medicaid prescription drug utilization and payments, 1990-97

Abstract

The rising cost of prescription drugs has caused public officials to restructure prescription drug coverage and payment policies in Medicaid. This study examines Medicaid utilization and payments for prescription drugs from 1990 to 1997. Medicaid prescription drug payments grew from $4.4 billion in 1990 to almost $12 billion in 1997, representing an average annual increase of 15.3 percent. In 1997 prescription drug payments per recipient were $1,379 for the blind and disabled, more than 10 times the amount for children. These findings will aid policymakers in setting prepaid plan rates for prescription drugs and monitoring access to care in Medicaid.

Figure 1. Medicaid Prescription Drug Payments,¹ by Eligibility Group and Year: Federal Fiscal Years 1990-97

¹ Medicaid prescription drug payments are gross amounts prior to the receipt of rebates to the States by prescription drug manufacturers. Medicaid prescription drug payments include all payments for prescription drugs provided under a fee-for-service setting (i.e., prescription drugs for which Medicaid paid a pharmacy claim). Because Medicaid pays a single premium to a prepaid plan for all covered services, it is not possible to identify prescription drug payments when they are covered by a prepaid plan. To this extent, Medicaid prescription drug payments presented here may understate total Medicaid payments for prescription drugs. ² The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash-assistance status. The Blind/Disabled group includes individuals of any age who were determined to be eligible because of disability. The Children's group includes foster care children. A small number of individuals that are not reported in these four groups have been excluded. NOTE: Data are reported for the 50 States and the District of Columbia. SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: HCFA Form-2082, 1990-97.

Figure 2. Medicaid Prescription Drug Payments,¹ as a Percent of Total Medicaid Payments, by Eligibility Group and Year: Federal Fiscal Years 1990-97

¹ Medicaid prescription drug payments are gross amounts prior to the receipt of rebates to the States by prescription drug manufacturers. Medicaid prescription drug payments include all payments for prescription drugs provided under a fee-for-service setting (i.e., prescription drugs for which Medicaid paid a pharmacy claim). Because Medicaid pays a single premium to a prepaid plan for all covered services, it is not possible to identify prescription drug payment when they are covered by a prepaid plan. To this extent, Medicaid prescription drug payments presented here may understate total Medicaid payments for prescription drugs. ² The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash-assistance status. The Blind/Disabled group includes individuals of any age who were determined to be eligible because of disability. The Children's group includes foster care children. The All-Recipients group includes a small number of individuals that are not reported in the other four groups. NOTE: Data are reported for the 50 States and the District of Columbia. SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: HCFA Form-2082, 1990-97.

Figure 3. Percent of Medicaid Prescription Drug Payments,¹ by Eligibility Group and Year: Federal Fiscal Years 1990-97

¹ Medicaid prescription drug payments are gross amounts prior to the receipt of rebates to the States by prescription drug manufacturers. Medicaid prescription drug payments include all payments for prescription drugs provided under a fee-for-service setting (i.e., prescription drugs for which Medicaid paid a pharmacy claim). Because Medicaid pays a single premium to a prepaid plan for all covered services, it is not possible to identify prescription drug payments when they are covered by a prepaid plan. To this extent, Medicaid prescription drug payments presented here may understate total Medicaid payments for prescription drugs. ² The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash-assistance status. The Blind/Disabled group includes individuals of any age who were determined to be eligible because of disability. The Children's group includes foster care children. A small number of individuals that are not reported in these four groups have been excluded. NOTE: Data are reported for the 50 States and the District of Columbia. SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: HCFA Form-2082, 1990-97.

Figure 4. Number of Medicaid Prescription Drug Recipients,¹ by Eligibility Group and Year: Federal Fiscal Years 1990-97

¹ A Medicaid prescription drug recipient is a Medicaid enrollee who received at least 1 covered prescription drug during the fiscal year. If an enrollee was covered under a prepaid plan, providing either partial or comprehensive coverage during the year, and had at least 1 fee-for-service claim for a prescription drug during the fiscal year, that enrollee is counted as a prescription drug recipient. Otherwise, enrollees covered under prepaid plans are excluded from prescription drug recipient counts because it is not possible to identify the plan enrollees who received Medicaid covered services. Therefore, these data may understate the number of prescription drug recipients. ² The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash-assistance status. The Blind/Disabled group includes individuals of any age who were determined to be eligible because of disability. The Children's group includes foster care children. The All-Recipients group includes a small number of individuals that are not reported in the other four groups. NOTE: Data are reported for the 50 States and the District of Columbia. SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: HCFA Form-2082, 1990-97.

Figure 5. Percent of Total Medicaid Prescription Drug Recipients,¹ by Eligibility Group and Year: Federal Fiscal Years 1990-97

¹ A Medicaid prescription drug recipient is a Medicaid enrollee who received at least 1 covered prescription drug during the fiscal year. If an enrollee was covered under a prepaid plan, providing either partial or comprehensive coverage during the year, and had at least 1 fee-for-service claim for a prescription drug during the fiscal year, that enrollee is counted as a prescription drug recipient. Otherwise, enrollees covered under prepaid plans are excluded from prescription drug recipient counts because it is not possible to identify the plan enrollees who received Medicaid covered services. Therefore, these data may understate the number of prescription drug recipients. ² The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash-assistance status. The Blind/Disabled group includes individuals of any age who were determined to be eligible because of disability. The Children's group includes foster care children. A small number of individuals that are not reported in these four groups have been excluded. NOTE: Data are reported for the 50 States and the District of Columbia. SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: HCFA Form-2082, 1990-97.

Figure 6. Medicaid Prescription Drug Recipients,¹ as a Percent of Total Medicaid Recipients: Federal Fiscal Years 1990-97

¹ A Medicaid prescription drug recipient is a Medicaid enrollee who received at least 1 covered prescription drug during the fiscal year. If an enrollee was covered under a prepaid plan, providing either partial or comprehensive coverage during the year, and had at least 1 fee-for-service claim for a prescription drug during the fiscal year, that enrollee is counted as a prescription drug recipient. Otherwise, enrollees covered under prepaid plans are excluded from prescription drug recipient counts because it is not possible to identify the plan enrollees who received Medicaid covered services. Therefore, these data may understate the number of prescription drug recipients. ² The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash-assistance status. The Blind/Disabled group includes individuals of any age who were determined to be eligible because of disability. The Children's group includes foster care children. The All-Recipients group includes a small number of individuals that are not reported in the other four groups. NOTE: Data are reported for the 50 States and the District of Columbia. SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: HCFA Form-2082, 1990-97.

Figure 7. Percent of Total Medicaid Prescription Drug Recipients¹ and Payments,² by Eligibility Group and Year: Federal Fiscal Year 1997

¹ A Medicaid prescription drug recipient is a Medicaid enrollee who received at least 1 covered prescription drug during the fiscal year. If an enrollee was covered under a prepaid plan, providing either partial or comprehensive coverage during the year, and had at least 1 fee-for-service claim for a prescription drug during the fiscal year, that enrollee is counted as a prescription drug recipient. Otherwise, enrollees covered under prepaid plans are excluded from prescription drug recipient counts because it is not possible to identify the plan enrollees who received Medicaid covered services. Therefore, these data may understate the number of prescription drug recipients. ² Medicaid prescription drug payments are gross amounts prior to the receipt of rebates to the States by prescription drug manufacturers. Medicaid prescription drug payments include all payments for prescription drugs provided under a fee-for-service setting (i.e., prescription drugs for which Medicaid paid a pharmacy claim). Because Medicaid pays a single premium to a prepaid plan for all covered services, it is not possible to identify prescription drug payments when they are covered by a prepaid plan. To this extent, Medicaid prescription drug payments presented here may understate total Medicaid payments for prescription drugs. ³ The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash-assistance status. The Blind/Disabled group includes individuals of any age who were determined to be eligible because of disability. The Children's group includes foster care children. A small number of individuals that are not reported in these four groups have been excluded. NOTE: Data are reported for the 50 States and the District of Columbia. SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: HCFA Form-2082.

Figure 8. Medicaid Prescription Drug Payments per Recipient,¹ by Eligibility Group² and Year: Federal Fiscal Years 1990-97

¹ Medicaid prescription drug payments per recipient are defined to be Medicaid payments for prescription drugs divided by the number of Medicaid enrollees who received at least 1 covered prescription drug during the fiscal year. A consistent approach has been taken to define the numerator and denominator of this statistic. A Medicaid enrollee is represented in the payment amount (in the numerator and as a prescription drug recipient in the denominator) if and only if there was a fee-for-service claim for a prescription drug for that person. ² The Medicaid eligibility group identifies the basis on which Medicaid eligibility was determined, regardless of cash-assistance status. The Blind/Disabled group includes individuals of any age who were determined to be eligible because of disability. The Children's group includes foster care children. The All-Recipients group includes a small number of individuals that are not reported in the other four groups. NOTE: Data are reported for the 50 States and the District of Columbia. SOURCE: Health Care Financing Administration, Center for Medicaid and State Operations: HCFA Form-2082, 1990-97.