Shaping Vaccine Cost and Coverage for Medicaid-Eligible Individuals

June 18, 2025 | Madison Hluchan

Medicaid covers 1 in 5 people in the United States, including 8 in 10 children living in poverty, making it an essential tool for ensuring vaccine access for adults and children alike. Following the Inflation Reduction Act of 2022, the Centers for Medicare and Medicaid Services (CMS) now requires Medicaid and Children’s Health Insurance Program (CHIP) to cover approved vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) and their administration, without cost sharing. Additionally, all Medicaid-eligible children under the age of 21 have coverage of the Early and Periodic Screening, Diagnostic and Treatment (EPSDT) benefit, which provides comprehensive and preventive services including all ACIP-recommended vaccines. Through the Vaccine for Children (VFC) Program, state Medicaid programs pay the vaccine administration fee for children enrolled in Medicaid.

Despite these measures to ensure access to recommended vaccinations among Medicaid members, vaccine uptake is less than those covered by private insurance for nearly all vaccines. For children under 19 enrolled in Medicaid and CHIP, research indicates that vaccination rates declined for all vaccines except for influenza from March 2020 through August 2021. Further, a 2024 MMWR report highlights that among children born between 2011–2020, coverage of one or more doses of MMR, rotavirus vaccine, and the combined seven-vaccine series was lower among VFC-eligible children than among non–VFC-eligible children. And while vaccination rates have been decreasing, the prevalence of vaccine preventable diseases (VPDs)- such as the recent widespread Measles outbreak and spending on VPDs have been increasing. State health agencies can consider their influence and authority as a mechanism to address these concerns.

Barriers to Vaccine Administration Among Medicaid Providers and Members

Various barriers exist that exacerbate the discrepancy in vaccination coverage among Medicaid members. On an individual level, vaccine hesitancy remains a concern — with higher prevalence of hesitancy among Americans making less than $50,000 — while providers face financial and administrative barriers to providing recommended vaccines to both children and adults.

Low Reimbursement Rates for Vaccination Purchase and Administration Fees

State Medicaid reimbursement rates to administer vaccines have historically been lower than those under Medicare or private insurance. Providers face numerous costs associated with providing vaccinations (e.g., storage, supplies, and administrative costs). For the VFC program and Medicaid members, providers are given the vaccine for free; however, the additional costs are often significantly higher than the reimbursement they receive (sometimes as low as $5) as the fees for vaccine administration are limited by federal regulation, and have not been updated since 2012. For this reason, providers may maintain only a limited supply or not offer vaccines at all. This limits Medicaid member access and reduces the uptake of recommended vaccinations.

For adults, barriers are often greater. The average estimated cost to providers to administer adult vaccines is between $15 and $23, while the median Medicaid payment to providers for a single adult vaccination was $13.62. Further, eight state Medicaid programs do not provide a separate payment for vaccine administration for adults.

Provider Reimbursement Restrictions

Although some Medicaid programs allow for payments to pharmacies and other provider types beyond the medical home to administer vaccines, not all do. Research from 2017-2022 shows that 15 states restricted Medicaid coverage for vaccines administered by pharmacists, while a recent CDC survey found that only 31 state Medicaid programs reimburse pharmacists to administer vaccines, 29 reimburse nurse practitioners, and four reimburse midwives. Improving reimbursement of multidisciplinary provider types, including pharmacists, could help to improve vaccine uptake among those populations that are less likely to have a medical home and seek regular care from a physician, including those in rural areas.

Limited Vaccination Data Reporting

While not unique to Medicaid members, inadequate vaccination reporting remains a challenge. Originally developed for childhood vaccination, immunization information systems (IIS) have inconsistent reporting of vaccination records, especially in adults, with some state laws preventing reports to IIS for adults or having opt-in policies that limit engagement. Limited vaccination data hinders the ability to properly identify unvaccinated individuals and provide the recommended care.

Approaches to Reducing Barriers with Medicaid Authorities

To address barriers related to vaccine administration among Medicaid-eligible individuals, state health agencies can consider a menu of options that may ease administrative burden, improve quality requirements, and enhance cross-sector initiatives and service delivery.

Reduce Provider Burden to Incentivize Access and Reduce Hesitancy

Reducing administrative and financial burden to providers can increase patient and provider interactions, the avenues by which vaccines are available, and trust among patient populations.

Reimburse Vaccine Counseling: States may choose to cover stand-alone vaccine counseling for both adults and children in Medicaid when a provider discusses a vaccine with a patient but does not administer one. States have long had the flexibility to cover stand-alone counseling for adults federally matched at the regularly applicable FMAP via state option. For Medicaid members under the age of 21 eligible for EPSDT, CMS requires states to provide coverage of stand-alone vaccine counseling for all vaccines covered under EPSDT. State options also allow for stand-alone vaccine counseling provided via telehealth. Stand-alone vaccine counseling by trusted providers may reduce vaccine hesitancy for some patients, as it provides additional opportunity to discuss individual barriers to vaccination.

Increase Administration Reimbursement Rates: SHAs may consider partnering with Medicaid to develop a State Plan Amendment (SPA) to increase vaccine administration reimbursement as an effort to reduce provider financial barriers. States including Indiana, Michigan, and New Jersey, have leveraged the SPA authority to increase vaccine reimbursement:

• Indiana submitted an SPA to increase reimbursement of the administration of VFC vaccines from $8 to $15 in 2019.
• Michigan increased reimbursement rates to $23.03 for beneficiaries 18 years and younger in 2024.
• New Jersey added in adult vaccine administration reimbursement between $6.36-$12.12 dependent on the vaccine the provider administered and whether they provided counseling, in 2024.

State Universal Vaccine Purchasing Program: Another opportunity to consider is the adoption of a state vaccine universal purchasing program, such as those currently in place in 14 jurisdictions, which enable state health agencies to bulk purchase some or all ACIP-recommended vaccines and distribute them free of charge to providers. Public funds, including VFC or Section 317 funds, and private health plans or insurers finance these programs. For example, Vermont began their Vermont Vaccine Purchase Program in 2011.  As authorized by law (8 V.S.A §1130), the Immunization Funding Advisory Committee provides the Health Commissioner an annual assessment and per-member, per-month cost for vaccines based on the total number of people covered by health insurers, which is collected from all health insurers in quarterly payments. Vermont Medicaid’s State Plan reimbursement methodology for the adult vaccine purchasing program is a per-member, per-month rate. The rate is set annually in April and effective July 1. The rate is calculated using a reconciliation of prior year program revenue and expenses, and estimated vaccine cost and utilization, program operating and administrative costs, and assessable covered lives for the state fiscal year starting July 1.

Vaccines for Adults Program: While the VFC Program is operated at the federal level, no such program currently exists for adults. Instead, some states have developed programs to fill the gaps, often using Section 317 Federal Funding. These programs, such as the New York State Vaccines for Adults Program, provide vaccines at no cost to eligible individuals, including uninsured adults, underinsured adults (i.e., health insurance does not cover the cost of the vaccine to be administered), and students of any age that are enrolled in or entering a post-secondary institution in New York State. While Medicaid members are generally ineligible, given the frequency of “Medicaid churn,” these programs provide a safety net for populations that are often Medicaid-eligible to ensure continuity of care.

Consider Opportunity to Influence Managed Care Quality Incentives

States operating their Medicaid program under Managed Care may consider addressing provider vaccine administration through Managed Care quality incentives. As part of the requirements for states that contract with Medicaid Managed Care Organizations (MCOs), states must develop a state quality strategy to serve as a blueprint for states and contracted health plans to assess the quality of member service provision and develop targets for quality improvement and network adequacy. While children’s immunization status is a mandatory quality measure for Medicaid and CHIP, the 2025 Core Set of Adult Health Care Quality Measures for Medicaid includes Adult Immunization Status (NCQA 26) as voluntary. To ensure consideration of appropriate vaccination status for adult Medicaid members, state health agencies can work to align quality and performance improvement strategies across Medicaid and public health programs to incentivize evidence-based practices and prioritize efforts to improve care delivery.

Collaborate with Medicaid to Improve Immunization Data Exchange and Reporting

Data Sharing: With consideration for the applicable federal and state laws, state health agencies may consider development of or enhancements in data sharing agreements with Medicaid to create data exchange between IIS and state Medicaid Management Information Systems (MMIS). Medicaid enrollment and claims data can be highly valuable for public health programs (i.e., immunization). For example, Medicaid programs have data on race and ethnicity, age, diagnoses, and vaccines received.

Data Modernization Initiative Sustainability: State health agencies may consider partnering with their Medicaid agencies to integrate data systems through a statewide data warehouse. States may be able to support state health agency data systems and personnel by using cost allocation through the CMS Advanced Planning Document process, where states develop a plan of action for their Medicaid information technology projects and request federal financial participation for their design, implementation, or maintenance activities. A state that received federal financial participation can see increased access to stable funding to support activities.

Tactical Strategies to Influence Cost and Coverage

In addition to state and territorial health officials using their authority and influence to recommend policy mechanisms to improve vaccine uptake among Medicaid members (e.g., reimbursement increases), they can take the following operational strategies to better position health agencies to undertake cross-sector initiatives:

• Share the business case and value proposition for increased investment in vaccine administration with Medicaid-eligible providers, Medicaid partners, and MCOs — including the significant economic and clinical impact of VPDs on individuals and providers equating to approximately $27 billion annually for adult VPD treatment.
• Foster relationships with state Medicaid agency counterparts, such as Medicaid chief medical officers, EPSDT managers, and quality managers. In addition, build connections with Medicaid MCOs, insurance commissioners, hospital networks, and CMS contacts to advocate for policy supportive of improved access to vaccinations. Consider establishing a cross-sector coalition or workgroup to advance vaccine efforts in your state.
• Align vaccination strategies between public health and Medicaid. In coordination with the relevant state Medicaid agency counterparts, discuss current barriers to vaccine uptake, and outline a cross-agency strategy to address them. This may include approaches to adopt higher reimbursement rates for vaccine administration, set aside funding for adult or uninsured vaccination programs, or expand network designations (e.g., pharmacies and local health agencies).
• Facilitate information-sharing on evolving streams of funding, like the IIS match, and champion bidirectional communication about what level of funding is necessary to sustain efforts across communities.