Medicaid Reforms in Florida

Florida is moving aggressively to cover Medicaid enrollees in privately-administered managed care plans. The state should also continue to move enrollees to managed drug plans. Virtually all state Medicaid programs distribute some drugs on a fee-for-service (FFS) basis separately from any health plan, says Devon M. Herrick, a senior fellow with the National Center for Policy Analysis.

Integrating prescription drugs benefits with Medicaid managed care health plans improves quality and increases efficiency.

Medicaid managed care plans frequently contract with pharmacy benefit managers (PBMs), private firms that act as third-party prescription drug plan administrators.

Numerous benefits flow from integrating drug benefits into enrollees’ managed care health plans. For instance:

– About two-thirds (67 percent) of drug prescriptions in Florida’s FFS Medicaid are filled with generic drugs, whereas the national average for managed Medicaid drug benefits is about 80 percent.

– Florida FFS pays pharmacies $3.73 to dispense a prescription, whereas the average for private Medicare Part D plans is just over half as much — about $2.00.

– The number of prescriptions per Medicaid enrollee is generally higher among enrollees in FFS Medicaid compared to managed care.

As Florida moves more Medicaid enrollees into managed care, it should also integrate drug benefits into enrollees’ health plans. In addition, Florida legislators should avoid the temptation to enact protectionist regulations designed to limit competition among pharmacies participating in the Medicaid program.

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