Jessica S. Banthin

Medical savings accounts: microsimulation results from a model with adverse selection

This paper examines medical savings accounts combined with high-deductible catastrophic health plans (MSA/CHPs), exploring the possible consequences of making tax preferred MSA/CHPs available to the entire employment-related health insurance market. The paper uses microsimulation methods to examine the equilibrium effects of MSA/CHPs on health care and non-health care expenditures, tax revenues, insurance premiums, and exposure to risk. If MSA/CHPs are offered alongside comprehensive plans, biased MSA/CHP enrollment can lead to premium spirals that drive out comprehensive coverage. Our estimates also raise concerns about equity, insofar as those who stand to lose the most tend to be poorer and in families with infant children.

Trends in prescription drug expenditures by Medicaid enrollees.

Objective:As prescription drug expenditures consume an increasingly larger portion of Medicaid budgets, states are anxious to control drug costs without endangering enrollees’ health. In this report, we analyzed recent trends in Medicaid prescription drug expenditures by therapeutic classes and subclasses. Identifying the fastest growing categories of drugs, where drugs are grouped into clinically relevant classes and subclasses, can help policymakers decide where to focus their cost containment efforts. Methods:We used data from the Medical Expenditure Panel Survey linked to a prescription drug therapeutic classification system, to examine trends between 1996/1997 and 2001/2002 in utilization and expenditures for the noninstitutionalized Medicaid population. We separated aggregate trends into changes in population with use and changes in expenditures per user, and percent generic. We also highlighted differences within the Medicaid population, including children, adults, disabled, and elderly. Results:We found rapid growth in expenditures for antidepressants, antipsychotics, antihyperlipidemics, antidiabetic agents, antihistamines, COX-2 inhibitors, and proton pump inhibitors and found evidence supporting the rapid take-up of new drugs. In some cases these increases are the result of increased expenditures per user and in other cases the overall growth also comes from an increase in the population with use. Conclusions:Medicaid programs may want to reassess their cost-containment policies in light of the rapid take-up of new drugs. Our analysis also identifies areas in which more information is needed on the comparative effectiveness of new versus existing treatments.