Rationing Begins: States Cutting Medicaid Drug Benefits

Phil Galewitz, Kaiser Health News: Illinois Medicaid recipients have been limited to four prescription drugs as the state becomes the latest to cap how many medicines it will cover in the state-federal health insurance program for the poor.

Doctors fear the state's cost-cutting move could backfire on patients, who have to get state permission to go beyond the limit.

"We understand the state is trying to get its Medicaid budget under control," says Dr. William Werner, president of the Illinois State Medical Society. "But our concern is it not be a hardship for patients and a hassle for doctors in the execution."

Sixteen states impose a monthly limit on the number of drugs Medicaid recipients can receive and seven states have either enacted such caps or tightened them in the past two years, according to the Kaiser Family Foundation (KHN is a program of the foundation). The limits vary across the country. Mississippi has a limit of two brand-name drugs. In Arkansas adults are limited to up six drugs a month.

Since June, Alabama has had the nation’s stingiest Medicaid drug benefit after limiting adults to one brand-name drug. HIV and psychiatric drugs were excluded. On Aug. 1 the state will relax the limit to its previous level — four brand-name drugs — after the restriction saved more money than expected and the state received money as part of a settlement with a pharmaceutical company.

Jarod Speer, a family doctor in Childersburg, Ala., welcomed the state’s decision. He said the one brand-name drug limit put his patients at risk. "This is going to remove a lot of the obstacles we were facing," he says. "Most patients can be managed with generics and three or four brand-name drugs."

While most drugs have a generic equivalent, his patients with asthma and other lung diseases faced limited options without access to brands, says Speer, who practices about 30 miles east of Birmingham.

Alabama Medicaid officials were happy to rescind the one drug limit, which affected 14,000 people, but defended its need.

"At the end of the day, we have to provide care, but we have to have a balanced budget," says Alabama State Health Officer Donald Williamson, who acknowledged reports that some patients with chronic diseases were having trouble finding generic replacements.

Other states with Medicaid drug limits are Arkansas, California, Kansas, Kentucky, Louisiana, Maine, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah and West Virginia.
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