California, Other States to Sue Washington Over Medicare
Posted on: Friday, 3 February 2006, 09:00 CST
California, other states to sue Washington over medicare LOS ANGELES, Feb. 2 (Xinhua) -- California and at least four other US states will file a lawsuit against the federal government to force Washington to pay unexpected costs associated with its troubled new Medicare program, the Los Angeles Times reported Thursday.
The states, also including Texas, Kentucky, New Jersey and Missouri, would appeal directly to the US Supreme Court to block the federal government from billing them for hundreds of millions of dollars in drug costs.
At issue is a provision in the new program requiring states to reimburse the federal government for drugs provided to low-income seniors and disabled people, according to state officials said.
They said the states had been paying those costs until the new federal drug program took effect on January 1, but flaws in the financial formulas behind the new drug program are leading Washington to overbill them.
California officials estimate that the state will have paid 161 million dollars more than it would have under the old system, despite the assurance by US Congress that the new program would lower costs by 10 percent.
State attorney general Bill Lockyer Wednesday announced in a letter to lawmakers his plan to sue later this month, a move endorsed by Governor Arnold Schwarzenegger.
"Our state is poised to take action to ensure California does not pay more than its fair share," the governor said.
Meanwhile, California officials said they would refuse to send the Medicare payment to the federal government when the bill comes this month.
More than 15 states in the country say the new Medicare program, which was supposed to save them money, would actually cost them more than the old system through at least the 2006 fiscal year.
Medicare officials say that state payments are to be reduced, thus resulting in a significant net gain for states in the future.
"Over the long haul, we believe the states will save money," said Medicare spokesman Gary Karr.
Source: Xinhua News Agency - CEIS
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