PHE- The $74,000 Question: Cancer, Medicaid and the Urge to Purge the Rolls

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[MM Curator Summary]: New treatments but not for Medicaid members. Example 1,478 of how Medicaid “provider networks” are a flimsy, convenient, mirage.



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The costs of treating cancer are soaring, just at a time when some states are moving to save money by cutting Medicaid enrollment. It’s sure to worsen health-care inequality.


The soaring cost of treating people with cancer is a major problem for all health insurance programs, but it poses especially big problems for Medicaid. Cancer drugs, in particular, raise a huge specter for the future of the state-federal program.

As cancer drugs go, platinum-based carboplatin is relatively inexpensive. Used to treat ovarian and other cancers, it’s a generic, and online coupons can bring it down to less than $15 per month. But carboplatin is often administered as part of an intravenous cocktail, which can push costs into the tens of thousands of dollars for cancer patients. Tivdak, used to treat cervical cancer, cost $529,000 a year in 2021.

Then there’s a new class of drugs in which blood is taken from a patient, processed genetically to fine-tune its effectiveness against a cancer, and then is injected back into the patient. These individually tailored drugs are very effective — and very expensive. One of them, developed to treat leukemia in children, is estimated to cost $1 million per year. More drug cocktails manufactured to meet an individual’s particular case are on the way.


Meanwhile, the standard treatment for advanced prostate cancer costs nearly $74,000 per year. It’s an easy drug to administer, with just a quick injection on a typical three-month schedule. Insurance companies typically negotiate down that price, but patients often still get stuck with a bill running into the thousands. It’s quite literally a real pain in the butt, but there’s an alternative: a daily pill that costs $32,000 a year.

These cancer drugs are a matter of life or death. All are expensive. Even some generics are in very short supply. The list price is beyond the means of almost everyone.

Of course, no one really pays list price. How much they do pay depends on the insurance they have. For lower-income Americans, that insurance is typically Medicaid — or nothing. How much lower-income Americans pay for such cancer treatments hangs on two things: whether they qualify for Medicaid, and what Medicaid pays for in their state.


Across the country, Medicaid is the largest item in state budgets — 27 percent in 2021 — and it’s the fastest-growing part as well. The state share of Medicaid spending — the states split the cost with the federal government — rose by 9.9 percent in 2022 and is projected to jump 16.3 percent in 2023.

The increase in the states’ share is especially large this year because of the end of the program’s “continuous enrollment” requirement. The states got a big payout from the federal government at the beginning of the COVID-19 pandemic, and the program required that no one on Medicaid could be taken off the program until after the federally declared public health emergency was terminated. The emergency officially ended on May 11. That not only triggered the phaseout of the continuous enrollment requirement but also ended additional federal Medicaid funding as of the end of 2023.

For cancer patients, that brings big implications. Medicaid tends to be relatively generous in covering the costs for cancer patients who meet eligibility guidelines. It’s one thing to have Medicaid coverage, though, and another thing to find a treatment facility that accepts Medicaid. A Yale study, for example, found that only two-thirds of cancer facilities accepted new Medicaid patients with four common cancers.

There’s a big difference between states as well. Among facilities in states that had expanded Medicaid under the Affordable Care Act, 71 percent of new cancer patients were accepted. In states that had not expanded Medicaid, it was just 60 percent. So Medicaid recipients can find themselves in a double bind: hoping that the state they live in covers them, and then hoping that they can find a facility in the state that accepts that coverage.


‘The Path of Dependency’

Facing soaring Medicaid costs, an eagerness to cut social welfare programs and the end of the public health emergency’s enrollment mandates, some states have raced to purge their Medicaid rolls. Arkansas, for example, aggressively trimmed the number of eligible Medicaid recipients in half the time that the federal government required.

Calling the purge a way to get the state’s Medicaid program “back to normal,” Gov. Sarah Huckabee Sanders said it was time to get many Arkansans “off the path of dependency.” The state wasn’t cutting Medicaid coverage, she asserted in a Wall Street Journal op-ed. Instead, “we’re simply removing ineligible participants from the program to reserve resources for those who need them and follow the law.”

That’s not the whole story, though. Seven of every 10 people who were removed from Medicaid in Arkansas were cut for administrative reasons, such as failing to fill out the right forms or provide all of the information required to continue their coverage. Relatively few cutoff decisions came from a determination that the individuals weren’t income-eligible for the program. The state said it’s contacting cancer patients so they can keep their treatments, but worries spread throughout the state that it was primarily the administrative burden of the process that was responsible for pushing people off the program, not their eligibility.

That’s a step that many more lower-income Americans are going to face this year. Medicaid enrollment was already rising sharply before the pandemic, up 10 percent from 2015 to 2020 due solely to growth in the Medicaid-eligible population. With the onset of COVID-19, that surge turned into a skyrocket: Medicaid enrollment grew by 23.3 million from February 2020 to the end of March 2023, an increase of more than 30 percent. With many Medicaid recipients sure to be squeezed out of the program now, they’ll be facing ballooning costs with disappearing insurance coverage.


A Federal Warning

States are in the very uncomfortable middle of all of these questions. Almost all of the factors driving their Medicaid spending are beyond their control, and almost all of them are projected to continue to spiral upward for the very long term.

Except for one factor, that is: The states do have control over the number of people eligible for the program and in how aggressively they police their Medicaid paperwork to manage the number of people who are admitted into the program or are dropped from it. Along with Arkansas, Arizona, Idaho, New Hampshire and South Dakota are working quickly to prune their rolls.

Earlier this month, U.S. Health and Human Services Secretary Xavier Becerra sent the governors a letter warning them to exercise caution. “I am deeply concerned with the number of people unnecessarily losing coverage, especially those who appear to have lost coverage for avoidable reasons that state Medicaid offices have the power to prevent or mitigate,” he wrote. But that has scarcely slowed down the states intent on cutting their Medicaid spending by reducing the number of the program’s recipients.

This battle isn’t targeted specifically at lower-income cancer patients. But they represent the patients needing some of the most serious and most expensive treatments, and without Medicaid most could not afford the drugs that could improve — or save — their lives.

The pressures the states face with lower-income cancer patients are just the leading edge of a much broader, quickly emerging crisis. The health care that some of society’s sickest and most vulnerable individuals will receive will depend increasingly on Medicaid. Some of the most effective treatments are quickly rising in price. Meanwhile, the states are facing less control over the fastest-growing item in their budgets. Efforts to grab the only lever over Medicaid spending that they have will inevitably squeeze out a lot of the patients, who have nowhere else to turn.

That’s the inescapable result of the peculiar system of health insurance that’s grown up in America since Medicaid’s enactment in 1965. And it’s sure to worsen the already staggering levels of health-care inequality plaguing the nation.

Governing‘s opinion columns reflect the views of their authors and not necessarily those of Governing‘s editors or management.