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Feds Pitch Medicare Drug Plan; State Official Wary Of Program's Cost

Posted on: Thursday, 11 August 2005, 18:00 CDT

RIO RANCHO -- The Medicare prescription drug benefit promoted Wednesday by a senior Bush administration official could cost New Mexico about $18 million in the next year, according to state officials.

But federal Health and Human Services Secretary Michael Leavitt said in an interview that states are worrying needlessly. "This should be good news for the states," he said.

Leavitt was in Rio Rancho as part of a national tour to encourage

senior citizens to sign up for the Medicare prescription

drug benefit, which begins Jan. 1.

New Mexico Medicaid director Carolyn Ingram said implementation costs and a complicated provision of the 2003 law enacting the benefit, known as the clawback provision, will cost the state millions.

The law requires the federal government starting Jan. 1 to pay the drug costs incurred by patients who are covered by both Medicare and Medicaid. Medicare is paid entirely by federal funds and is designed to help the elderly and the disabled. Medicaid, designed to help low-income citizens, including the elderly, is paid in part by state funds. Today, Medicaid pays for drugs used by patients who qualify for both programs, imposing a huge drug cost on every state's budget.

Though the federal government will pay drug costs for those patients eligible for both programs, it is also requiring states to pay back a portion of the money they save over 10 years. Ingram said her $18 million cost estimate includes the effect of federal prescription drug payments.

Leavitt said when his department works with states to verify numbers and agree on assumptions, the program works for the states. He did not know details of New Mexico's program.

About 42,400 New Mexicans receive health care services through both Medicare and Medicaid, costing the state about $80 million for drugs. The state expects to spend $558.3 million on Medicaid, including for those who do not receive Medicare, in the fiscal year ending June 30.

Ingram said that she and officials in other states believe the clawback provision is unconstitutional and plan to meet in Washington, D.C., this month to review their legal options.

The Pew Research Center said states expect to pay $6 billion in 2006. The Bush administration says states will save $8 billion over five years, thanks to the law.

Source: Albuquerque Journal

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