Amid rising drug costs, states struggle to cover Medicaid costs

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Rising drug prices are straining states' ability to cover the costs of Medicaid, which could lead to restricted benefits for enrollees, according to The Hill.

Medicaid has price controls for prescription drugs to help address the rising prices, such as required rebates paid by the manufacturer, as well as the ability of states and health insurers to negotiate supplemental rebates, but these measures are often not enough.

While states have policies in place to prevent exorbitant spending on prescription drugs, continually rising prices have led experts to say some difficult decisions will need to be made regarding enrollees' benefits. States can employ tactics such as preferred drug lists, prior authorization and comparative effectiveness reviews, but these may not curb spending significantly. If that's the case, states may seek to significantly scale back benefits by focusing on policies that limit medications for Medicaid beneficiaries or cut reimbursements to health plans, according to the report.

"States have been creative, but it's a tough, steep hill to climb" to cope with drug price increases, said Trish Riley, executive director of the National Academy for State Health Policy, according to the report. "We're pretty close to states hitting their breaking point. It's not just the increase, it's the unpredictability of it."

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