Missouri House approves drug plan

Tuesday, September 11, 2001

JEFFERSON CITY, Mo. -- State representatives have passed legislation that expands Missouri's Medicaid program and offers new medicine benefits to the lower-income elderly.

But the 126-11 vote late Monday night came after some lawmakers raised concerns about the cost of the new and expanded programs.

Also Monday night, the House passed a measure providing a one-time state income tax exemption for this summer's federal tax rebates.

Both bills now go to the Senate.

The health-care legislation includes a provision that more than doubles the amount of assets that the poor, blind and disabled could possess yet be eligible for the Medicaid health-care program.

All Medicaid enrollees receive prescription drug coverage.

The legislation also creates a new state-funded, privately administered prescription benefit for seniors who have neither Medicaid nor private prescription coverage.

Such a benefit has been touted by both Democrats and Republicans as a way to help seniors in the greatest need.

Yet lawmakers are wrestling with exactly how much help a cash-strapped state government can -- or should -- provide.

Representatives approved the Medicaid expansion -- raising the asset cap to $2,500 from $1,000 for individuals and to $4,500 from $2,000 for couples -- without knowing how much it would cost.

Legislative researchers later determined that the entire bill -- with the Medicaid expansion and new prescription program -- would cost about $125 million annually.

Some supporters disputed that figure, citing lower estimates prepared earlier by private consultants. But others questioned the wisdom of the House-passed bill.

"I'm concerned that the reason we're doing this bill is the old (prescription drug program) costs too much, and this one costs more," said state Rep. Roy Holand, R-Springfield.

Senators had passed a bill Friday that was estimated to cost as much as $117 million. Legislative researchers said Monday that the Senate estimate was inaccurate, but a new figure was not immediately available.

Even while voting, some senators said they hoped the House would pass a more financially realistic bill.

Both versions would do away with a state income tax credit that offers up to $200 annually to many seniors to help offset their prescription drug purchases.

The tax credit, estimated to cost $20 million annually when enacted in 1999, instead cost the state $85 million last fiscal year, spreading cash among 492,000 seniors.

Critics' concerns

Critics say the credit costs too much yet provides too little aid to seniors.

Proposals in both the House and Senate would replace the tax credit with a privately managed program targeted to fewer people.

"This will not be a runaway program fiscally," said sponsoring Rep. Mark Abel, D-Festus. "It's not everything that we need for our seniors, but it's a very good beginning."

After paying an enrollment fee and annual deductible, participants would pay 40 percent of their prescription costs with the state picking up the rest. Benefits would be capped at $5,000 annually per person.

The House plan calls for a two-tiered program, with lower enrollment and deductible fees for individuals earning $12,000 or less and couples making $17,000 or less. Benefits would be offered at higher costs for individuals earning up to $17,000 and couples up to $23,000.

Senators, in their version, deleted the upper tier and replaced it with a so-called catastrophic plan intended to allow people to qualify if they spent 25 percent of their income on prescription drugs. However, there was a mistake in the language.

Both prescription drug plans are modeled after recommendations from a bipartisan task force appointed by Gov. Bob Holden after lawmakers failed to agree on a prescription plan during their regular session that ended in May.

When calling a special session, Holden also asked lawmakers to consider changes to a livestock pricing law and a one-time state income tax break for federal tax rebate checks.

The tax exemption would save individuals from paying an $18 state tax based on their $300 federal rebates. For couples receiving $600 rebates, the tax savings would be doubled. The exemptions would cost the state more than $29 million.

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