December 13, 2004

Despite record caseloads, the state of Michigan held down prescription drug costs by millions of dollars in its Medicaid program, thanks to a number of innovative programs designed to curtail state prescription drug costs.

Governor Jennifer M. Granholm said today the state’s effort to control prescription drug costs for the state’s Medicaid program is having a positive impact of the state’s budget.

“In a typical year, this could be called very good news, but with sky-high caseload numbers, this announcement is an incredible achievement,” Granholm said. “We will continue to work hard to control Medicaid prescription drug costs for our most vulnerable citizens.”

For Fiscal Year 2004, Michigan spent $642.3 million on prescription drugs – an increase of only four percent from FY03, Granholm said. The four percent increase is almost $130 million below what state officials had initially estimated for prescription drug growth for FY04.

The state of Michigan spent nearly $7.1 billion in Fiscal Year 2004 on its Medicaid program. As of November 2004, the total Medicaid caseload – including 34,000 low-income children enrolled in the state’s MIChild program, and 68,000 people benefiting from the Adult Benefit Waiver – was more than 1.5 million Michigan residents – the largest in the history of the program.

“This is a perfect example of the state of Michigan working hard to be fiscally responsible during tight budget times,” said Janet Olszewski, Director of the Michigan Department of Community Health. “We realize that every dollar counts and that this type of fiscal responsibility ultimately means that more Michigan residents can be supported by our programs.”

Since Granholm took office in 2003, Michigan has continued to utilize its Preferred Drug List (PDL) successfully, and has implemented two new significant programs to control costs – the Multistate Prescription Drug Pool and the Michigan Prescription Drug Discount Card, or MIRx. T

he multi-state pool, pioneered by Granholm in 2003, allows participating states to pool their collective buying power and negotiate bulk discounts from drug manufacturers.

Eight other states, including Vermont, New Hampshire, Nevada, Maine, Hawaii, Arkansas, Montana, and Kentucky, are currently in the pool, the nation's only federally-approved pool of its kind.

National per capita health expenditures increased 6.2 percent from 2003 to 2004, based upon an estimate from the Centers for Medicare and Medicaid Services (CMS). However, per capita health expenditures for Michigan’s Medicaid program only increased 2.4 percent from FY 03 to FY 04, less than one half of the national average, Olszewski said.

“Despite record caseloads and increasing demand on Michigan’s Medicaid program, we continue to manage the state’s health insurance program for low income citizens as well – and in some cases better than – private insurers,” Olszewski said.

The Michigan Department of Community Health also has already signed up more than 14,000 uninsured citizens for its new drug discount card program – the Michigan Prescription Drug Discount Card (MIRx). The state hopes to enroll more than 20,000 citizens by the end of 2004.