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 Medicaid plans currently pay for most prescription drugs. The new
approach would align their coverage with that of many private health
plans and Medicare prescription drug plans that typically use the
threat of excluding a drug from coverage to seek lower prices from
manufacturers.
The Centers for Medicare & Medicaid Services (CMS), part of the U.S.
Department of Health and Human Services, said states would have to
opt into the Healthy Adult Opportunity program. It said patients
eligible for the program would be limited to adult beneficiaries
under age 65 who are not eligible on the basis of a disability or
their need for long-term care.
The program is primarily targeted at the roughly one-fifth of
Medicaid patients who received health coverage through the
Affordable Care Act's (ACA) Medicaid expansion program since 2014,
CMS Administrator Seema Verma said.
The program would require states to commit in advance to either a
total Medicaid spending figure or a per capita spending amount in
order to receive federal money, a change from the current method in
which the federal government reimburses states for a percentage of
actual spending, and one that could run into legal challenges.
Much like private health insurers, participating states would be
able to create a formulary of covered drugs, which allows them to
give a drugmakers' medicine priority in exchange for lower prices.
There are special protections for drugs that treat HIV and
behavioral health conditions.
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"This is an opportunity for states to have greater negotiating power
with manufacturers," Verma said on a conference call with reporters.
States participating in the program will be required to report key
quality metrics to CMS.
There are more than 71 million people currently covered under
Medicaid, an important social safety net program created five
decades ago and expanded by Trump's predecessor Barack Obama through
the ACA, popularly known as Obamacare.
Evercore ISI analyst Michael Newshel said the program could be in
violation of Federal law, which requires Medicaid funding to be open
ended.
"Any capped funding arrangement will most likely be overturned in
court," Newshel wrote in a research note.
Americans' healthcare coverage has been a central issue in the 2020
presidential election. Democrats have been critical of programs like
the one being proposed by the administration.
(Reporting by Michael Erman; Editing by Chizu Nomiyama and Bill
Berkrot)
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