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Archive for Sunday, February 26, 2006

Governors want assurances on prescription drug costs

February 26, 2006

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— Problems with the new Medicare drug benefit could erode states' finances if they have to wait too long to get reimbursed from insurers and the federal government for drug costs incurred during the program's troubled start, some governors say.

The pledge that states would be reimbursed is one of the main issues governors plan to raise with the president and his Cabinet at a White House meeting Monday.

Under the prescription program, the federal government is relieving states of the cost of buying medicine for poor elderly people and the disabled under Medicaid. 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 switched over correctly when the Medicare program began Jan. 1. These people might have gone without their medicines without the states' help.

The federal government cannot have it both ways, asking states to make their regular payment and also cover the cost of the early glitches, said Maine Gov. John Baldacci, a Democrat.

"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 Assn.'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."

The administration has opposed legislative fixes, saying it can handle the matter more quickly. It says private plans will reimburse states for costs that the insurers were supposed to cover. Also, the federal government will cover administrative costs, plus the difference between what states paid for the drugs and the payments they get from private plans.

"We're going to ensure that you're reimbursed by the plans for the money that you have paid on their behalf, and any administrative costs that you may have put forward," Health and Human Services Secretary Mike Leavitt told the governors on Saturday.

Leavitt did not discuss the timing of that reimbursement, and most of his speech focused on the need to prepare for a potential flu pandemic.

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