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Member Research and Reports

Member Research and Reports

Kentucky Researchers Analyze Medicaid Prescriptions and Drug Spending Under ACA

University of Kentucky researchers published the paper “Number of Medicaid Prescriptions Grew and Spending Was Steady In Medicaid Expansion States” in Health Affairs. Dr. Hefei Wen, assistant professor in the department of health management and Policy, and Dr. Tyrone F. Borders, Foundation for a Healthy Kentucky Endowed Chair in Rural Health Policy and professor in the department of health management and policy published the study in the September 2016 issue of the journal.

borders wen
[Photo: Dr. Tyrone F. Borders (left) and Dr. Hefei Wen]

The researchers found that expansions of eligibility for Medicaid under the Affordable Care Act (ACA) may have increased the number of Medicaid drug prescriptions. However, the expansions did not drive Medicaid spending on prescription drugs overall in 2014.

During 2014, an estimated nine million Americans gained insurance coverage as the result of state implementation of Medicaid expansions under the Affordable Care Act (ACA). Prescription drug spending represents a major component of U.S. health care costs and reflects an important aspect of access to appropriate treatment. The study provides timely and rigorous evidence for the impact of the ACA Medicaid expansions on Medicaid drug spending and prescriptions.

The researchers derived 16 waves of quarterly state-aggregate data from the CMS Medicaid Drug Utilization Files 2011-2014. They designed a quasi-experimental difference-in-differences study comparing the pre-post changes in Medicaid drug spending and prescriptions across 26 expansion states with those of the non-/late-expansion states.

On the one hand, they found that implementation of the ACA Medicaid expansions did not affect Medicaid spending on prescription drugs overall. On the other hand, implementation of the expansions may have been associated with a relative increase in total number of Medicaid prescriptions. The findings suggest that the ACA Medicaid expansions may have increased the number of Medicaid drug prescriptions with no significant, immediate impact on drug spending growth.