State lawmakers in West Virginia say their budget choices are only getting tougher. About a third of state residents are on Medicaid. OZinOH/Flickr hide caption
Skyrocketing prices for essential medicines like the EpiPen, are generating public outcry, congressional hearings and political promises for policy fixes. In the meantime, the increases continue to hit pocketbooks — even of people who don’t rely on these expensive drugs. In a state like West Virginia, where dire budget shortfalls have been a problem over the last few years, the problem is especially pronounced.
Kimberly Earl, of Charleston, W.Va., is feeling the pinch. She has four children, all of whom need medication.
Last year, two of her children needed new EpiPens — which come in a 2-pack. (The dose of epinephrine each pen delivers is designed to be used in an emergency, to stop a severe allergic reaction.) The Earls have private health insurance, but had yet to meet their $10,000 family deductible for 2015. They didn’t have enough money for two boxes of EpiPens at the $600 price — even with a $100 discount from the drug’s manufacturer. So the family improvised.
“We took the pens and we split the two pens between two kids,” Earl explains. “I actually took the pens out and wrote on the top — ‘use this one first’ on the current pens, and ‘use this one second’ on the expired pens. So each kid was walking around with one current pen and one expired pen. And we were just hoping that if there was an issue they wouldn’t have to use that second pen.”
While Earl paid for the drugs out of pocket, about a third of West Virginians are insulated from these direct costs because they are covered by Medicaid. The state expanded Medicaid under the Affordable Care Act, giving lower-income people the government-sponsored insurance. Most Medicaid patients don’t have premiums or copays.
But in the end, rising drug prices affect everybody in West Virginia. When lawmakers consider the state’s budget, they only have so much revenue to divvy up among priorities that include health care services, roads and schools, says Dr. James Becker, the medical director of Medicaid in West Virginia.
“So when the cost of a drug goes up dramatically,” he says, “that impacts our system and we have to step in and make adjustments to regulate the drug appropriately.”
The West Virginia Department of Health and Human Resources can regulate the cost of drugs by negotiating lower prices through the federal rebate program. The rebate program is a complex system, but basically comes down to this: The more Medicaid patients enrolled in the program, the more bargaining power the government has to make drug companies lower their prices. Another way Medicaid manages costs is by including older, cheaper, but still effective drugs in its formulary, rather than relying on more costly new brands.
But even with these measures, the overall increase in the price of medications has forced some shifting of funds in other parts of the state budget, says Ron Stollings, a Democrat and state senator from Boone, W.Va.
“Certainly for Medicaid funding in West Virginia, [the hike is drug prices] is a huge cost,” says Stollings, a former chairman of the state senate’s health committee. “So when we have to put money into funding Medicaid, we have to cut funding for higher education and secondary education; we have to put off paving projects, etc.”
Stollings says these rising Medicaid costs — partially due to higher drug costs — fall on the taxpayer, who may end up paying more state taxes to fund the budget.
“If you’re a taxpayer, it impacts you,” Stollings says. “If you’re an insured person it will impact your premiums, and if you are on Medicaid you may get this expensive medication, but they may be ratcheting down coverage for other things.”
Medicaid is a large portion of the West Virginia’s budget, right behind public education. And it will probably get even bigger next year, as the state picks up more of the Medicaid expansion costs from the federal government.
This story is part of a reporting partnership with NPR, West Virginia Public Broadcasting and Kaiser Health News.
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