Governors want assurances from Bush administration on prescriptopm drugs

Sunday, February 26, 2006

WASHINGTON -- The Medicare drug benefit could erode states' finances if the Bush administration delays reimbursing states for stepping in during the program's troubled start, some governors say.

The federal pledge is one of the main issues governors plan to raise with the president at a White House meeting Monday.

Under the new prescription program, the federal government is relieving states of the cost of buying medicine for poor elderly people. In exchange, states will make monthly payments to Washington to help cover the cost of the benefit.

Many states were upset they had to make this payment at all; some are suing to stop it. On top of that expense, states have bought medicine for hundreds of thousands of poor people who were not enrolled correctly when the program began Jan. 1. These people might have gone without their drugs without the states' help.

The federal government cannot have it both ways, asking states to make their regular payment and cover the early glitches, said Maine Gov. John Baldacci, a Democrat. So far, Maine has paid for 115,000 prescriptions that were supposed to be covered through the program.

'Some real hiccups'

"We've put out $5.9 million, and for a small state like Maine, that's a lot," Baldacci said in an interview while attending the National Governors Association's winter meeting. "We can't be expected to pay back what we haven't saved. So we want partnerships developed. We're all tied in this together."

Many members of Congress have demanded reimbursement for states that are paying for drugs on an emergency basis.

The administration has opposed legislative fixes, saying it can handle the matter more quickly. The Health and Human Services Department has said the government will reimburse states for administrative costs as well as any difference between drug costs and payments from private drug plans.

The bill for some states could be substantial.

California said it will seek reimbursement for $150 million. New York has paid an estimated $115 million to help older people get medicine. Some states, however, are not seeking a penny because they had little extra expense.

Gov. Mike Huckabee, R-Ark., and the association's chairman, said he gets the sense the drug program is working more smoothly, though Arkansas had spent $6 million it had anticipated and is requesting reimbursement.

"We were one of the states that had some real hiccups in the first weeks," Huckabee said.

He believes Arkansas will save money in the long run as a result of the program.

"I'm not going to defend the whole program because there were clearly mistakes made. The mistakes were unintentional, but they still had real-life impact," Huckabee said.

"But I also don't want it to get lost that more people are getting prescription drugs than ever before, and they're really getting them at a better price than they've ever had them before," he said. "The net result is a plus, not a negative."

Under the program, about 42 million older people and the disabled are eligible to enroll in a private plan designed to subsidize prescription costs.

One of the biggest complaints is that the program is too complex. Some critics say beneficiaries are discouraged from enrolling because they cannot make sense of the dozens of plans available.

In a 39-page memo to insurers, employers and others running the drug benefit, the Centers for Medicare and Medicaid Services is asking for advice on how to simplify the program.

The agency proposed limiting to two the number of drug plans a company can offer per region. Many insurers now offer three. With more than a dozen insurers often in a single region, consumers can have more than 40 choices.

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