Medicaid Monday: Texas Medicaid MCOs Save Money on Prescription Drugs for Taxpayers

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By: TAHP | Monday, April 5, 2021

April 5, 2021

By: Jamie Dudensing

Prior to 2012, Medicaid prescription drug costs were out of control, hurting both Texas taxpayers and patients. Drug costs had almost doubled from 2001 to 2011, and patients received fragmented care that didn’t produce the most efficient or effective results.

In response, the state shifted administration of Medicaid prescription drugs into managed care. Under Medicaid managed care health plans could provide the care and coordination Texans needed to get healthy and stay healthy, all while helping to control costs.

As a result, millions of Texans have seen improved outcomes and Texas Medicaid managed care has already saved more than $5 billion dollars for Texas taxpayers. Integrating all medical care, behavioral health, prescription drugs, and other services ensures Medicaid managed care plans can coordinate the total care needed for better health outcomes and cost savings. Studies show that state programs that allow Medicaid managed care plans to coordinate prescription drug coverage are more efficient and cost 15% less than states that do not. Multiple studies also show that excluding pharmacy benefits from managed care does not achieve savings and has an adverse effect on the integrated, whole-person approach that is fundamental to any managed care model.

As successful as Medicaid managed care currently is, there is even more opportunity for cost savings. If the Legislature lets Medicaid plans to use their negotiating power to manage the drug formulary, prices could be reduced further. Medicaid managed care plans have proven they can save money for Texas taxpayers while producing better results. Let’s give them the opportunity to do more.

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