Governors want compromise on Medicare to ease state drug costs

WASHINGTON -- The nation's governors, facing large budget deficits, are pressing lawmakers to lift the states' $7-billion-a-year burden of paying for prescription drugs for the 6.2 million Americans who receive both Medicare and Medicaid.

The governors see an opportunity to cut states' rising health-care costs as negotiators for the House and Senate attempt to reconcile their versions of a new prescription drug benefit under Medicare, the federal health program for older and disabled Americans.

The House bill would give drug coverage to all Medicare recipients, phasing out over 15 years the states' obligation to pay drug costs. The Senate version would deny a Medicare drug benefit to people -- dubbed dual eligibles -- who also are enrolled in Medicaid, the joint federal-state health program for poor people.

All 50 governors signed a letter to Rep. Bill Thomas, R-Calif., the lead House negotiator, urging lawmakers to keep the House provision in the final bill. Kentucky Gov. Paul Patton, a Democrat who chairs the National Governors Association, said Monday that the issue is of "vital importance" as governors try to cope with budget shortfalls.

The federal government pays the entire bill for Medicare. But states pay about a third of the cost of Medicaid, about $40 billion annually just for people who are covered by both government health programs, the governors association said. Prescription drug costs account for $7 billion, the association said.

Governors failed earlier this year to bridge a partisan divide and come up with a blueprint for an overhaul of Medicaid, which provides health coverage for 44 million Americans. But Patton said there is no argument that the program's "cost is growing beyond the capacity of states to keep up with it."

Continuing to have Medicaid pay prescription drug costs probably will mean cuts elsewhere in the program, with services to women and children the likeliest targets, he said.

The Medicare bill in Congress also faces a difficult road. The Senate passed a bipartisan bill while the House measure was crafted to the specifications of conservatives, and drew the votes of only nine Democrats.

While most analysts have said the Senate bill is more generous to low-income Americans, critics have said that the exclusion of federally paid drug benefits to Medicaid recipients undermines a core principle of Medicare, its availability to older and disabled Americans regardless of income.

Sen. Charles Grassley, R-Iowa, chief sponsor of the Senate bill, has rejected that argument, saying the legislation was designed to give drug coverage to those who currently have none.

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On the Net:

National Governors Association: http://www.nga.org