Political Economy of Medical Foods Reimbursement

Medical foods (MFs) fall in-between food and drugs. Because they are more expensive than normal foods, some states have mandated insurance companies (or their own state agencies) to provide coverage for the afflicted community, leaving a checkered pattern of coverage across the US, where insurance laws fall within state domain. To investigate the legislative adoption process, this paper develops a political economy model of medical food reimbursement (MFR) and coverage policy and identifies five categories of causal factors. Analytical logit regression models confirm the positive influences of metabolic clinics, the political clout of the afflicted community, literacy rate, education and income on the probability of adoption. The countervailing interests of the insurance industry and the non-afflicted community, as well as the income effect (affordability hypothesis) were confirmed. Results further indicate that the choice of reimbursement mechanism is affected largely by the same variables as legislative adoption.