From 2014 to 2016, New York’s Medicaid program saw a surge in drug spending that Governor Andrew Cuomo blamed on “abusive” behavior by drug manufacturers. But a new Empire Center issue brief shows that, after accounting for rebates, the surge was smaller than Cuomo described, and that it was mostly driven by enrollment growth. Overall, the report finds that price increases accounted for about one-fifth of the spending surge, while enrollment accounted for four-fifths.

After the Affordable Care Act took full effect in 2014, New York’s Medicaid enrollment grew by 1.3 million, or 28 percent, in large part due to the structure of the new health care law. The ACA broadened New York’s al­ready expansive Medicaid eligibility guide­lines, financed the hiring of “navigators” to facilitate sign-ups, threatened a tax pen­alty on those who failed to enroll and used marketing and media attention to increase public visibility.

When adjusted for enrollment and utilization, Medicaid’s drug costs over the past decade have been relatively well controlled compared to both national averages and recent history. Though costs have trended up since their 2013 low point, the program’s cost per prescription was lower in 2017 than when Cuomo took office.

The brief further shows that total drug costs are disproportionately driven by a small number of high-priced, brand-name medications. The top 10 costliest medications, out of more than 3,000 purchased, have accounted for 17 to 24 percent of total Medicaid drug costs in recent years. A handful of newly introduced hepatitis C drugs have been an especially big expense for New York since 2013, in part because officials were slow to restrict coverage.

The Empire Center, based in Albany, is an independent, not-for-profit, non-partisan think tank dedicated to promoting policies that can make New York a better place to live, work and raise a family.

You may also like

Report: Cuomo’s Medicaid Reforms Are Breaking Down

The budget crisis in New York’s Medicaid program stems from the failure of a key cost-control measure adopted during Governor Cuomo’s first term, according to a new report from the Empire Center for Public Policy. Read More

Report says NY hospital revenue increased by $14B

Revenue for New York’s hospitals increased by $14 billion from 2012 to 2016, according to an Empire Center research and data bulletin released today. Read More

Options for eliminating local funding for Medicaid analyzed in new report

The feasibility of a full state takeover of the remaining local share of Medicaid costs in New York is explored in a new report released today by the Empire Center for Public Policy. Read More

New Report Suggests For-Profit Hospital Ownership Could Improve NY Hospitals

Despite a concentration of world-famous hospitals in Manhattan, New York’s overall hospital industry ranks at or near the bottom on a range of performance benchmarks measuring quality, efficiency, financial health and equality of access, an Empire Center study has found. Read More

State misspends $1.1B charity-care fund, study finds

A billion-dollar state program to reimburse hospital charity care is having a reverse Robin Hood effect, shortchanging hospitals that serve poorer patients to the benefit of those that serve more affluent populations, according to a new analysis by Empire Center health policy director Bill Hammond. Read More

Medicaid “block-granting” impact on NY could vary

Federal “block-granting” of Medicaid could have outcomes ranging from a multi-billion dollar gain to a multi-billion loss for New York’s $63 billion program, depending on how such a reform is designed, according to an analysis by the Empire Center’s health policy director, Bill Hammond. Read More

‘AlbanyCare’ Won’t Work, Report Finds

Claims that a state-run single-payer health care system would save money do not add up, according to an analysis released today by the Empire Center for Public Policy. Read More

Hammond To Oversee Health Policy for Empire Center

Longtime Albany reporter and commentator Bill Hammond has joined the Empire Center as director of health policy. Read More

Subscribe

Sign up to receive updates about Empire Center research, news and events in your email.

CONTACT INFORMATION

Empire Center for Public Policy
30 South Pearl St.
Suite 1210
Albany, NY 12207

Phone: 518-434-3100
Fax: 518-434-3130
E-Mail: info@empirecenter.org

About

The Empire Center is an independent, non-partisan, non-profit think tank located in Albany, New York. Our mission is to make New York a better place to live and work by promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government.