Medicaid

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.

Local governments, such as counties, cities, and townships, provide a number of basic public services that help create safe, clean, healthy, vibrant communities. Cook County, which has over five million residents and is the second largest county in the nation, is no exception. It delivers such essential services as public safety, the operation of the largest court system in the United States, health care for poor and low-income individuals through three public hospitals and 14 community clinics, the operation of the largest jail facility in the nation, and economic and human development programs. The cost of the public services Cook County will provide in FY2007 is $2.8 billion. By comparison, the annual budget for Los Angles County, which has nearly 10 million residents, is over $21 billion annually.

This Report analyzes the County’s fiscal system to determine whether it has the ability to fund and sustain the level of public services it currently provides. The analysis reveals Cook County has what is called a “structural deficit.” A structural deficit exists when a public entity’s fiscal system is unable to generate sufficient revenue to support base-level public services from one year to the next, adjusting solely for annual inflationary costs. It is important to recognize that the model used in this report assumes service levels will remain constant – that is, when running simulations of the cost of public services into the future, no service expansions are projected from FY2007 levels. Therefore, the starting point for the analysis in this Report is the service levels existing after the cuts made in FY2007.

A presentation on the Illinois economy, and how it relates to education funding.

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.

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.

Medicaid spending is often misunderstood and misrepresented because of the complexities of its financing structure.This Report is intended to: (1) clarify how Illinois’ Medicaid program is funded, (2) highlight the benefits to the state of Medicaid’s financing structure, (3) identify the percentage of state, own-source general fund spending dedicated to the program and (4) demonstrate the economic impact Medicaid spending (or cuts) has on the state and local economy.

A Fact Sheet on the impact Medicaid has on Illinois' economy.

A primer on how Illinois finances long-term care for older adults, produced by the Finance Workgroup of the Illinois Older Adult Services Advisory Committee (OASAC). OASAC was established to analyze the different financing options for reforming the long-term care system for older adults in Illinois. The Center for Tax and Budget Accountability was a member of the OASAC.