Healthcare

An Analysis of Pharmacy Benefit Managers' Impact on Medicaid Drug Pricing provides some insights into the question of how decision makers can best incorporate Pharmacy Benefit Managers ("PBMs") into the management of Medicaid and CHIP. The report summarizes how PBMs work in practice at the state level to contain retail prescription drug costs in Medicaid programs, and to the extent relevant, how the “Managed Care Organizations (“MCOs”) contract with various state governments to administer Medicaid and CHIP benefits and services. Additionally, the report provides a brief explanation of how the retail prices for prescription drugs are determined at the state level for Medicaid programs in the Managed Care/PBM setting —and how that differs from the traditional Fee-for-Services or FFS setting. 

The report also provides a national snapshot of the PBM's impact on drug pricing nationally, and then delves into the impact of PBMs on prescription drug costs in Medicaid and CHIP programs for five states: Illinois, West Virginia, Louisiana, Missouri, and Florida. West Virginia and Missouri are examples of states that use a pharmacy benefit “carve out,” which means some or all Medicaid prescription drug benefits are not included in the state’s respective managed care contracts. Illinois, Florida, and Louisiana were selected as states that rely on a pharmacy benefit “carve in,” which means Medicaid prescription drug benefits are for the most part included in the applicable managed care contracts.

On October 11, 2017, the Cook County Board of Commissioners voted to repeal a penny-per-ounce tax on sweetened beverages. The FY2018 budget presented by Cook County Board President Toni Preckwinkle had relied on the sweetened beverage tax to cover just over $200 million of the county's projected expenditures on services.

However, Cook County's budget shortfall is not merely a product of the short-term decision to repeal the sweetened beverage tax without revenue to replace it. The county has an ongoing structural deficit driven by the fact that 43 percent of the county's revenues come from sources that are growing slower than inflation. Moreover, the county has chosen not to increase its base property tax levy since 1996—even to adjust it for inflation. As a result, the real value of Cook County's base property tax levy has declined by 36 percent over the last 20 years.

Now that the tax has been repealed, county officials are considering closing the FY2018 shortfall by cutting spending on core services. Some of the proposed cuts would:

• Significantly increase caseloads for probation officers. Caseloads are currently 108 probationers per officer, or 21 percent above standards recommended by the Administrative Office of the Illinois Court.
• Suspend the Mortgage Forecloseure Mediation Program, which assists low-income homeowners through the foreclosure process.
• Close a branch courthouse, forcing residents to travel farther to attend hearings.

These service cuts would disproportionately affect Cook County residents who are low income and residents of color.

Cook County must address the long-term unsustainability of its revenue system if it is to avoid enacting further harsh cuts to core services.

You can read the full report on the Budget Blog or download a PDF by clicking below.

A comprehensive list of 2007 legislative bills from both sides of the Illinois General Assembly, organized by subject area.

A Fact Sheet on impact of state budget shortfalls on payments to Medicaid healthcare providers in Illinois.

This Report provides information on how proposed federal cuts to Medicaid in 2006 would have affected Illinois' program.

CTBA's 2006 study comparing the value of the tax breaks received by Cook County non-profit hospitals to the charity care they provide in return. The study was updated in 2009.

An analysis of the role “intergovernmental transfers” and the “upper payment limit” play in financing Illinois’ Medicaid program. These financing mechanisms are critical to funding healthcare for poor and low-income individuals throughout the state. 

An explanation of how the state shortchanges Cook County of federal Medicaid payments.

An update to CTBA's 2006 study comparing the value of the tax breaks received by Cook County non-profit hospitals to the charity care they provide in return. This Report finds that Chicago area non-profit, charitable hospitals spend only one dollar on charity care for nearly every three dollars they receive in tax breaks. This gap suggests non-profit hospitals are not fulfilling their public obligation to provide free or discounted care to low-income, uninsured families.