by Devon M. Herrick
National Center for Policy Analysis
February 19, 2014
Wisconsin has moved about two-thirds of its Medicaid enrollees into privately administered managed care plans, known as BadgerCare. However, the state has been very slow to move Medicaid enrollees into managed drug plans. Virtually all state Medicaid programs distribute some drugs on a fee-for-service (FFS) basis separately from any health plan, but Wisconsin is one of the minority of states that distribute almost all their Medicaid drugs this way. Privately managed Medicaid drug plans are more efficient than state-administered drug benefit programs. Rather than negotiating with pharmacy networks, state fee-for-service Medicaid programs often arbitrarily pay much higher dispensing fees than they would in a competitive market. These programs rarely utilize generic drugs. Legislators will likely find that drug plan managers will lower costs if they allow drug plans to compete.