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Medicaid Prescription Drug Use and Expenditures by State, 1999 to 2006

Medicaid expenditures for prescription drugs grew rapidly between 1999 and 2005, leading states to implement a wide variety of measures to constrain use and costs, while still retaining access to needed medications for vulnerable Medicaid beneficiaries. As shown in the chart below, the implementation of the Medicare Part D drug benefit in 2006 shifted responsibility for drug coverage for over 7 million Medicare-Medicaid dual eligibles from Medicaid to Medicare, reducing Medicaid drug expenditures for prescriptions drugs by more than half and sharply increasing projected Medicare expenditures.

Sources: National Health Expenditure Projections 2008-2018
National Health Expenditures by Type of Service and Source of Funds, CY 1960-2007

Working with the Centers for Medicare & Medicaid Services (CMS) since 2002, Mathematica has used Medicaid Analytic eXtract (MAX) files to track and analyze these trends on a state-by-state basis for the years 1999 and 2001-2005. The MAX files are prepared from claims and eligibility data that have been submitted electronically by all states to CMS for each year since 1999.

In annual state-by-state and national tables (“Statistical Compendiums”) and accompanying chartbooks, Mathematica has shown drug use and expenditures by beneficiary characteristics (age, sex, and race), basis of eligibility (children, adults, disabled, aged), and type of drug (brand vs. generic, top 10 drug groups, 17 therapeutic categories, and drugs excluded by statute from Medicare Part D). There are separate tables and graphs for dual eligibles and for nondual beneficiaries.

The tables and chartbook for 2005 show prescription drug use and expenditures for dual eligibles for the last year in which Medicaid provided their drug coverage. These Medicaid data can be compared to 2006 Part D data for dual eligibles to assess changes that may have resulted from the 2006 shift in coverage for dual eligibles to Medicare. The Medicaid data for 2006, which Mathematica is now preparing, will show Medicaid drug use and expenditures for nonduals and some small amounts for duals that Medicaid remained partially responsible for in 2006.

Publications

Statistical Compendiums
Statistical Compendiums (“Medicaid Pharmacy Benefit Use and Reimbursement”) for 1999 and 2001-2005 are all available on the CMS website.

Chartbooks
“Chartbook Medicaid Pharmacy Benefit Use and Reimbursement in 2005” (June 2009)
“Chartbook Medicaid Pharmacy Benefit Use and Reimbursement in 2004” (October 2008)
“Chartbook Medicaid Pharmacy Benefit Use and Reimbursement in 2003” (April 2008)
“Chartbook Medicaid Pharmacy Benefit Use and Reimbursement in 2002” (May 2007)
“Chartbook Medicaid Pharmacy Benefit Use and Reimbursement in 2001” ( December 2006)
“Chartbook Medicaid Pharmacy Benefit Use and Reimbursement in 1999” (March 2005)

Issue Briefs
"Medicaid Prescription Drug Use by Dual Eligibles: Issues for Medicare Part D," Trends in Health Care Financing, Issue Brief No. 8 (August 2008)
"New Medicaid Drug Use and Cost Data Highlight Issues for States After Medicare Part D," Trends in Health Care Financing, Issue Brief No. 7 (June 2007)
"Medicaid Drug Use Data Show High Costs and Wide Variation for Dual Eligibles," Trends in Health Care Financing, Issue Brief No. 5 (August 2005)
"New State Data on Medicaid Drug Use and Cost Can Help States Solve Problems,” Trends in Health Care Financing, Issue Brief No. 4  (March 2005)

Journal Articles
"Medicaid Beneficiaries with Congestive Heart Failure: Association of Medication Adherence with Healthcare Use and Costs," American Journal of Managed Care (2009)
“Utilization of, and Adherence to, Drug Therapy Among Medicaid Beneficiaries with Congestive Heart Failure.” Clinical Therapeutics (August 2007)
"Prescription Drug Use and Expenditures Among Dually Eligible Beneficiaries,"Health Care Financing Review (Summer 2007)