specified coverage in accordance with ACIP standards.9 Federal Medicaid policy prohibits the imposition of cost sharing for enrollees under age 18; the extent to which states impose cost sharing for immunizations in the case of persons aged 18–21 remains uncertain. States have the option of covering all routine and risk-related ACIP-recommended immunizations for Medicaid-enrolled adults (both elderly and nonelderly), but the extent of state coverage for adult immunizations is not known.
Prior to VFC, Medicaid paid for both vaccines and administration fees. Estimates of Medicaid program expenditures for immunization services were $364 million in fiscal year (FY) 1994, the last year before implementation of VFC; $200 million of this total was federal costs, and the remainder was state Medicaid matching costs (information provided by CDC). In FY 1998, when VFC spending for vaccines and operational costs was $437 million, Medicaid program expenditures—largely for administration fees, but including some vaccines not covered by VFC—were $127 million, $70 million of which was federal (see Table 3–3) (information provided by CDC).
In 1993 Medicaid was further amended to include the VFC program, which is 100 percent federally financed.10 The program creates a federal entitlement to immunization services for children aged 18 and under who are (1) Medicaid-eligible, (2) uninsured, (3) underinsured and receiving immunizations through a federally qualified health center (FQHC) or rural health clinic, or (4) Native American or Alaska Native.11Figure 3–1 displays the share of VFC spending represented by each eligibility group. Notably, the legislation establishing the VFC program explicitly prohibits spending on program administration except for narrowly defined operational costs associated with ordering, inventory maintenance, distribution of vaccines, and provider enrollment and coordination.12
The VFC program requires the Secretary of Health and Human Services to negotiate vaccine purchase agreements with manufacturers. VFC vaccines are available only when administered by “program-registered” providers.13 In 1998, an estimated 44,000 public and private providers were eligible to receive VFC vaccines (information provided by CDC). The VFC legislation requires “maintenance-of-effort” by states, similar to the maintenance-of-effort provision for employer-sponsored health plans included in ERISA. The law provides that, as a condition of receipt of vaccine under VFC, states must agree to maintain their insurance laws governing immunization coverage at 1993 levels.14
The VFC program does not change the states’ basic obligation to cover all ACIP vaccines for Medicaid children. Significant delays can occur,