ACA Growing Pains: Medicaid

Christopher Weaver of Kaiser Health News has piece today on ACA-mandated changes to federal/state sharing of drug rebates under Medicaid.

Democrats included a provision in the health law designed to raise $38 billion over 10 years by requiring greater discounts from drugmakers selling to Medicaid, the joint federal-state health insurance program for the poor. Previously, the rebates were divided between the states and the federal government. Under the law, a significant portion of the rebates will go solely to Washington beginning this year. …

…[T]he rebate losses may be offset by another part of the law. That provision would require drugmakers to provide discounts to states for drugs sold to Medicaid managed care plans hired by the states. Yet even with those new discounts, some states project that they will see overall losses in the rebate programs. …

Some state lawmakers are already calling on federal officials to back away from the proposal. “Some things may need to be changed,” said Sharon Treat, a Democratic Maine legislator. “For those of us that have been working hard to get health care passed, it would be a slap in the face if we lose money.”

The law creates winners and losers in two ways: (1) States had negotiated different levels of drug discounts from manufacturers. Those that had greater discounts have more to lose. They’re being punished for good negotiation skills. (2) New discounts will be available to states that contract with private plans to provide managed care, but not to public insurance programs (or parts thereof).

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