Thursday, January 12th, 2006


  • Over One Million “Dual-Eligibles” Facing Problems Under Medicare Part D Implementation
  • CA Joins Over 10 States, Providing Prescription Drug Coverage Costing $70 Million
  • First Step in Fixing a “Challenged and Troubling Implmentation” and Flawed Benefit

Starting later today, California will extend emergency drug coverage to the over one million low-income seniors and people with disabilities, many of whom have faced problems is getting needed medications as they transitioned to the new Medicare Part D prescription drug benefit.

Governor Arnold Schwarzenegger’s action under emergency authoriy allow California to joins over 10 states in offering emergency prescription drug coverage during Medicare Part D implementation. The press release is available at the Governor’s website under “Press Room” and “Press Releases,” at:

BACKGROUND: Senior, health, consumer, and low-income advocates had urged that the state step in to fill in for these federal failures. The impacted patients are the over one million “dual-eligible” Californians, low-income seniors and people with disabilities that qualify for both Medicare and Medi-Cal, who are the most vulnerable of California’s residents.

Up until December 31, 2005, these patients got full prescription drug coverage from the state Medi-Cal program. On January 1, 2006, all of them were supposed to be switched to a new low-income Medicare benefit from the federal government. (Even if the benefit worked perfected, these new private Medicare plans would provide more costly, less comprehensive coverage)

WHAT IT DOES/DOESN’T DO: This coverage *will* help those patients that have fell through the cracks of this beginning implementation, who have found that they have no coverage, that there are errors in the system about what coverage and cost-sharing they may have, and in many cases that they can’t get any drugs whatsoever. Many patients have gone to the pharmacy and found that they cannot get their prescribed drugs, or that they are being charged retail prices, placing many into hardship. Secretary Kim Belshe indicated that the federal Centers for Medicare and Medicaid Services (CMS) reports a 20% error rate, meaning that perhaps over 200,000 low-income Medicare recipients are at risk of not getting the drugs they need.

This emergency coverage *won’t* deal with the ongoing issues of all of the over one million patients now facing higher co-payments, or that many will find that the drugs they need are not covered under the new, private prescription drug plans. The need to fix this Medicare benefit over the long-term will be an ongoing issue in the new year, but it wasn’t the subject of this necessary, emergency provision.

CA JOINS OTHER STATES: In the last several days, news reports have indicated that over ten states, including New Hampshire, North Dakota, South Dakota, Connecticut, Vermont, Maine, Hawaii, New Jersey, Idaho, Illinois and Massachusetts, are offering state-funded temporary drug coverage. These actions have yielded national coverage, revealing the most acute problems about the implementation of the Medicare Part D prescription drug benefit. It is clear that with these federal failures, with life-and-death issues on the line, the states needed to step in.

HOW IT WORKS: In the press conference today, Secretary of Health and Human Services Kim Belshe described that the state will turn back on Medi-Cal coverage for these patients, and the state will be the payer of last resort. A 5-day emergency coverage program will start today under his emergency authority. With agreement through legislative leadership, legislation is expected to be introduced on Tuesday, January 17th to extend this program for a total of 15 days. The expectation is that the federal government will have remedied many of these transition issues in the next few weeks.

Secretary Belshe and Medi-Cal Director Stan Rosenstein indicated that pharmacists would be able to get reimbursed for providing prescribed drugs if they show that they were unable to get needed information from Medicare, that they inquired to Medicare but were incorrectly denied, or if the Medicare patient’s deductible or co-payment was higher than the $5 maximum for these low-income patients.

Those who have been denied in the last 12 days should go back to the pharmacist, who can retry their name in the Medicare system, and if not, can get the needed drugs under Medi-Cal. At the press conference, several pharmacists were on hand to talk about the problems they have experienced in the last two weeks.

THE COST: Medi-Cal Director Rosenstein estimated the cost of this 15-day prorgam to be around $70 million, money that was not included in the proposed budget that was released a few days ago. Secretary Belshe was clear that “this does not mitigate the federal government’s responsibility” for these costs, and that the state intends “to seek full reimbursement.” In this vein, Sen. Frank Lautenberg (D-NJ) introduced legislation in Congress to get the federal government to reimburse states for these problems. However, up until this point, the federal government was clear that it was not intending to even provide Medicaid matching funds for drugs covered under the Medicare benefit.

THE FALLOUT: In response to a reporter’s question, Secretary Belshe indicated that this was a “challenged and troubling implementation” of the Medicare drug benefit, and that California and other states had advised caution to the federal government, which went unheeded. She pointed out that in California, problems could be expected when shifting the drug coverage of over one million vulnerable patients in one day.

ACTIONS: This emergency action will require a 2/3 vote of both houses of the legislature, requiring votes from Democrats and Republicans, as will other future emergency actions and other remedies that require money. Senior, health, low-income, and consumer advocates are expressing their appreciation to these legislative leaders and members, but also preparing the groundwork that such emergency coverage be extended, and that ongoing gaps in the Medicare drug benefit need to be addressed to protect these vulnerable seniors and people with disabilities.

Health Access California promotes quality, affordable health care for all Californians.
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