Medicaid Reforms in Pennsylvania

In order to reduce rising health care costs, many states are forging ahead with plans to move Medicaid enrollees into managed care plans. Pennsylvania has been more aggressive than most states, enrolling more than 80 percent of Medicaid participants in managed care. Pennsylvania is also integrating Medicaid drug benefits with enrollees’ health plans rather than carving out drug benefits and administering them separately on a fee-for-service basis, says Devon M. Herrick, a senior fellow with the National Center for Policy Analysis. Virtually all state Medicaid programs distribute some drugs on a fee-for-service basis, but Pennsylvania ranks among the few states that distribute only a small portion this way.

However, stakeholders and pharmacy interests have called on the state to impose new layers of unnecessary regulations on drug plans and on firms that manage drug benefits.

Some regulation advocates want to dictate business models and contract negotiations between drug plans and their employers/clients. But these restrictions inhibit innovation and flexibility in plan design.

Medicaid will best serve Pennsylvania taxpayers by providing drugs to enrollees at the lowest possible cost. Indeed, better Medicaid prescription drug management could save Pennsylvania $2 billion over 10 years ($1.1 billion in lower federal spending and $896 million less in state spending).

More From NCPA: