Prescription Drugs Driving Cost Increases In Medicaid, State Health Benefits

Sep 15, 2015

Credit taxcredits.net

Florida’s Medicaid costs will soon take up about half of the state’s new revenue. And enrollment in the program continues to grow. The increasing costs of the program has the state’s chief economist putting part of the blame on prescription drugs.

Governor Rick Scott says contracts between Medicaid managed care providers and hospitals are the main driver of increased costs. And the state Agency for Healthcare Administration has agreed. But Florida’s chief economist Amy Baker, says the contracts aren’t the problem—prescription drug costs are:

 “We’re seeing it not just in Medicaid, although the dollar magnitude is much larger here, we’re also in state-employee health insurance. There’s a lot of innovative drugs, specialty drugs, drugs in new areas that purport to do new things coming out now and being released….and they’re extremely costly medications.”

Baker presented a financial update to lawmakers Tuesday. State Rep. Janet Cruz, D-Tampa,  remains skeptical about the cost hikes and is questioning whether the state’s decision to privatize health insurance program for the poor was a wise move:

“I continually head we’d be able to contain costs…and this would be more cost-effective, but I’m looking at these numbers and I don’t see that," she said. " I find it interesting and hard to believe they’re referring people over who didn’t understand they had benefits.  I’m very concerned we were sold a bill of goods that said moving members into managed care would contain costs, and it’s not.” 

Baker says it’s too soon to tell if managed care is working. And she adds the increased cost is also due to more people becoming aware they qualify. The Florida legislature has known about the growing price tag in Medicaid. The Agency for healthcare administration recently approved a 7 percent rate hike for the Medicaid plans.