Many States Consider Program To Extend Rx Drug Coverage to Low-Income Seniors Who Do Not Qualify for Medicaid
About half of all states will consider joining a Bush administration program that provides federal funds to states to extend prescription drug coverage to some lower-income seniors who do not qualify for Medicaid, the New York Times reports (Freudenheim, New York Times, 7/6). Under the program, called Pharmacy Plus, states can apply to the federal government for waivers to extend Medicaid coverage for prescription drugs to Medicare beneficiaries with annual incomes up to 200% of the federal poverty level, or $17,720 for an individual and $23,880 for a couple (California Healthline, 1/29). Illinois and Wisconsin have received approval for their programs, and Connecticut, Florida, New Jersey and South Carolina have filed formal applications. An additional 18 states have filed "tentative" applications or "expressed interest" in the program, according to CMS.
Some states have raised concerns about the "financial risks" that the new program could pose to their Medicaid budgets and to the "low-income people they already serve," the Times reports. Ray Hanley, chair of the National Association of State Medicaid Directors, said that several states "simply cannot afford to spend more on health care, even with federal help, at a time of economic sluggishness and squeezed budgets." In addition, the program, which gives participating states a five-year Medicaid waiver, has a "federal subsidy ceiling that will rise no higher ... than the total federal contribution for Medicaid that a state received" before the program, the Times reports. As a result, "for each dollar that a state receives under the program, it must find a dollar of savings elsewhere in the government's contribution to Medicaid." Cindy Mann, a Medicaid expert with the Kaiser Family Foundation, said the program has a "particular risk because drug benefits are the fastest-growing cost for Medicaid." She added, "The waivers put all the risks onto the states and the beneficiaries. That is a fundamental change in the way the Medicaid program is normally financed." However, officials in Illinois and Wisconsin said that they "expected savings" from the program, which they maintain provides coverage to some seniors who "might otherwise end up" enrolled in Medicaid after "spending heavily" on prescription drugs (New York Times, 7/6).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.