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State Variation in Medicaid Pharmacy Benefit Use Among Dual-Eligible Beneficiaries

This study examines Medicaid pharmacy benefit use and spending among beneficiaries dually eligible for Medicare and Medicaid in 10 states by analyzing 1995 enrollment and claims data from a new 12-state database. The study finds that dual-eligibles are relatively high users of the Medicaid pharmacy benefit, with substantial variation in both drug use and spending among this population across the 10 study states. This variation appears to persist independent of beneficiaries' health status and is likely attributable to cross-state differences in Medicaid eligibility criteria, pharmacy benefit features, provider behavior, and other unmeasured beneficiary characteristics.