Medicaid and CHIP Ensure Children Get Access to Affordable Drugs

August 29, 2017

 

One of the overlooked aspects of the prescription drug price debate is that many children use prescription drugs as well. Almost one fourth of American kids use at least one prescription drug per month. The medicines are used to treat a variety of conditions, including infections, attention deficit hyperactivity disorder, and asthma. In a new report, the Georgetown Unversity Health Policy Institute looks at Medicaid and CHIP, two programs that provide health coverage for a great many children, and how these programs ensure that kids are partially shielded from increasing drug costs.

 

The vast majority of children have health insurance coverage, and 36% of children get coverage through public health care programs, mostly through Medicaid and the Children's Health Insurance Program (CHIP). CHIP covers nine million children and Medicaid covers thirty-seven million--that means forty-six million American kids are relying on these two programs. Many children need prescription drugs regularly to treat chronic health conditions, and many more need them when they get sick.

 

For the youngest children under six, penicillin antiobiotics are most often used; they treat short-term illnesses like ear infections. For children up to eleven, the most commonly drugs are used to treat asthma and other breathing conditions. 8.5% of children have asthma, and if they don't get the medicine they need, more of them have to make emergency room visits, and harms them in other ways. For teenagers and near-teens ages twelve to nineteen, central nervous stimulants (CNS) are most common and used to treat attention deficit hyperactive disorder (ADHD). Finally, some children have special health conditions like HIV/AIDs or leukemia that require expensive medicines. 

 

Both Medicaid and CHIP provide children enrolled in the programs with a comprehensive, thorough health care package that includes prescription drug coverage. Kids are shielded from unaffordable drug prices because Medicaid has an early and periodic screening, diagnosis, and treatment benefit and the benefit includes a coverage mandate. Medicaid and CHIP also have limits on copayments and other out-of-pocket costs.

 

However, many states put limits on the prescription drug benefits that Medicaid programs offer. And rising drug costs are putting increasing pressure on state budgets, and some states are adopting cost containment measures as a result. Some measures are welcome, but state governments should take steps to ensure these measures do not deny children access to the medicines they need.

 

The report concludes with several recommendations. Among these recommendations are: Medicaid and CHIP should maintain coverage of drugs, and Medicaid should maintain its discounts in the form of statutory rebates and extend these rebates to CHIP programs, which would help ensure CHIP gets the best available drug prices. Moreover, Medicaid and CHIP should work to find solutions to reduce high launch prices for new drugs, which strain state budgets and could threaten access to medicines.

 

Medicaid and CHIP play a vital and underappreciated role in ensuring children have access to the medicines they need. This report highlights that role; in the future debate over health care and drug prices, policymakers should work to strengthen Medicaid, not defund it.

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