National Medicaid enrollment grew by two million in the first half of 2009 to more than 52 million, according to a new report.
The report, by HealthLeaders-InterStudy, reveals that Medicaid growth nationwide increased nearly 5 percent, with 25 states – including Florida and Michigan – experiencing enrollment growth of more than 5 percent.
Sheri Sellmeyer, vice president of market analysis for HealthLeaders-InterStudy, said the growth reflects how the economic downturn has exacerbated many states' budget concerns.
"State budgets are already strained so lawmakers may seek to tighten Medicaid eligibility and reduce benefits – including pharmacy benefits – in order to hold costs to a sustainable level," she said.
Sellmeyer noted, however, that an increase in the Medicaid population may benefit the pharmaceutical industry because more people have pharmacy benefit coverage under Medicaid than they might with individual policies or if they are uninsured.
She warned that health plans and pharmaceutical firms should be prepared for states to take action to control escalating healthcare costs.
The report found that Managed Medicaid – in which states contract with private insurers to manage Medicaid enrollees' healthcare through HMO-style plans – grew by approximately 1.6 million members from January to July 2009.
A significant portion of the growth seen in this sector (more than 760,000 enrollees) was in "carve out" programs, in which the state handles all of the pharmacy benefit rather than contracting with health plans for that service. States with "carve out" programs include Texas, New York and Wisconsin.
Another 850,000 new members appeared in states that carve out only a part of the pharmacy benefit, including California, Florida and Michigan.
"While managed care organizations may see market share and enrollment numbers increase with new Medicaid members, this growth will not necessarily translate into rising net income because of the narrow margins in Medicaid," said Sellmeyer.