STATE'S DRUG TAX CREDIT MUST BE SCRAPPED

Both chambers of the Missouri General Assembly appear on track this session to replace a costly prescription-drug tax-credit program for low-income elderly Missourians that should never have been passed as it was in the first place.

The legislature in 1998 adopted a tax-credit program that provided up to a $200 income-tax credit for people 65 and older. The program was estimated to cover 130,500 people and cost $20 million. Instead, it was extended to all senior citizens, and the state granted the tax credit to 452,294 people, most of whom didn't even apply. That ended up costing the state $89 million the first year, more than four times the estimated amount.

The House recently voted to do away with the tax-credit program and replace it with a plan that would subsidize the prescription-drug costs of only some senior citizens. Under the measure, the state would help meet the prescription-drug costs of people 65 or older earning less than $15,000 a year and married couples earning up to $25,000. People enrolled in the program would pay a deductible plus a monthly fee, and those who spend more than 10 percent of their household incomes on prescription drugs also could get help from the state.

Legislative researchers estimate the House-approved program will cost at least $23 million in fiscal year 2003 and $38 million or more in fiscal year 2004. However, the measure's sponsor, state Rep. Mark Abel of Festus, said that after looking at similar programs in other states, he expects the cost to top $70 million.

The Senate, meanwhile, has given initial approval to a plan that would use a private insurer to help cover prescription drugs for the state's poorest elderly residents. It needs another vote before it can be passed to the House. Its sponsor, state Sen. Marvin Singleton of Joplin, called the plan a pro-business, conservative approach that won't expand state government.

It is clear that the tax-credit program was a costly mistake by state government because it extended to all senior citizens regardless of whether they applied for the credit. What is not clear is how a program that ended up costing more than four times its estimate managed to become law when there were state officials who knew it would be more costly.

If nothing else is accomplished during this session, the legislature must correct its costly mistake and offer to elderly Missourians who need it a program that will help offset the high costs of medications.