BUDGET COMMITTEES DEBATE MEDICARE DRUG CO-PAYS, CHILDREN’S COVERAGE

  • Assembly subcommittee proposes all remaining uninsured children be covered by public programs
  • Assemblywoman Chan and advocates urge covering Medicare Part D co-pays for “dual-eligibles”
  • Senate and Assembly subcommittees weight other health budget items
  • Action Item: Advocacy needed on Medicare emergency coverage, co-payments coverage

Governor Arnold Schwarzenegger’s May Revision is just a few days away, and various groups are jockeying to spend the over $4 billion that has flowed into state coffers over what was projected in January. What the governor decides to do won’t be revealed until Friday, May 12, but the Legislature stepped up pressure Monday to use a small portion of the increase to provide better access and coverage to health care for California’s most vulnerable.

The Assembly Budget Subcommittee on Health and Human Services, chaired by Assemblyman Hector De La Torre (D-South Gate), approved a proposal that would cover all California’s children, and weighed a $76 million proposal to cover the co-pays for dual-eligibles who are now forced to pay for their medications under the new Medicare Part D. These budget items must still jump significant hurdles in order to be included in the final budget.

CHILDREN’S COVERAGE

The Assembly Budget Subcommittee on Health and Human Services approved $5 million for the 2006-07 budget year to start the administrative process of expanding coverage to the remaining 800,000 uninsured children in Healthy Families and Medi-Cal.

The proposal, which would not be implemented until July 2008, would raise the income ceiling for Healthy Families from 250 percent of poverty to 300 percent. It would also expand Medi-Cal’s income ceiling for Medi-Cal to 133 percent. Previously, children older than 5 were ineligible for Medi-Cal if their families earned above 100 percent of poverty. In effect, the changes would allow for universal coverage of *all* children under 300% of the federal poverty level, which is $49,800 for a family of three.

Under this proposal, additional funds would be needed in the 2007-2008 budget year. They could come from the general fund, or from other revenues, such as the tobacco tax that is pending for the November 2006 election.

To simplify the application process and increase the number of children enrolled in Healthy Families and Medi-Cal, the committee also:

  • Rejected the Administration’s proposal to cut funds for county eligibility operations, as well as to hold counties financially responsible for federal Medi-Cal penalties.
  • Rejected the Administration’s proposal to fund a media campaign on enrollment, the effectiveness of which was questioned by the Legislative Analysts Office (LAO) and advocates.
  • Held open proposals around outreach and increasing incentives for Certified Application Assisters (CAAs).
  • Approved the Administration’s proposal not to require families to pay premiums up front, or choose a health plan, before they are enrolled and know exactly what program they qualify for.
  • Approved the Administration’s proposal to hasten enrollment for eligible infants born to mothers in the Access for Infant Mothers (AIM) program, although families may have to prepay two months of premiums.

The Senate Budget Subcommittee on Health, chaired by Senator Denise Ducheny, also heard a range of issues earlier today. They also heard and rejected the Governor’s proposed to cut county eligibility operations, as did the Assembly. The Senate also approved a $21.1 million increase in Medi-Cal, in expectation of having 27,672 Medi-Cal recipients stay enrolled, as a result of simplifying the redetermination form.

LOW-INCOME SENIORS IN MEDICARE PART D

CO-PAYMENT COVERAGE CONSIDERED: The Assembly heard testimony – though delayed a vote – on a $76 million proposal that would cover the co-pays that low-income seniors must pay as part of the new Medicare Part D prescription drug plan.

Previously, low-income seniors and people with disabilities had their prescription drugs covered under the state Medicaid (Medi-Cal) program, which had broad coverage with no costs. But when this population was entirely shifted over to Medicare Part D, these seniors ended up with less comprehensive, most costly coverage.

These seniors have to now deal with newly-imposed co-payments, even though they live on less than $825 a month and on average, use more than 10 prescription drugs on a regular basis.

Assemblywoman Wilma Chan, chair of the Assembly Health Committee, made the case before the budget subcommittee for the state to cover these co-payments. She indicated that the Medicare Part D program left California’s most vulnerable worse off, and that the state should not allow these Californians to suffer under a policy than the state would not have approved.

The committee held the item open, and is expected to revisit the issue next week, after the Governor’s May Revise announcement.

MEDICARE EMERGENCY COVERAGE: In addition to urging the state to cover the co-payments for “dual-eligibles,” senior, health, and low-income advocates are urging state policymakers to extend the “emergency coverage” to ensure that these seniors and people with disabilities get needed medications despite any ongoing problems and glitches in the Medicare Part D program.

Governor Schwarzenegger and legislative leaders passed emergency legislation earlier this year, to allow the Medi-Cal program to serve as coverage of last resort, when these low-income seniors and people with disabilities were denied drug coverage. That coverage runs out next week, on May 16th. While the scale of the issues have decreased, some problems remain, and there is concern that new ones may re-appear as the program continues its first year of operation, with new populations being enrolled, and later in the year, when some prescription drug plans are expected to leave the program.

AB 813 (Perata/Nunez) was recently amended to extend emergency coverage to “dual eligible” seniors and people with disabilities from May 17, 2006 until March 31, 2007. AB 813 provides that the state Medi-Cal program will pay for prescription drugs when Medicare Part D fails. Pharmacists are required to use good faith efforts to bill Medicare Part D before using the state system. In addition, pharmacists are required to sign claims under penalty of perjury that efforts to bill Medicare Part D have been used.

Governor Schwarzenegger’s Administration has not yet announced whether it will support extending the emergency coverage, and nor have Republican legislative leaders. Their support will be critical to pass this legislation by two-thirds, which is needed to do it in the short time frame needed.

ACTION NEEDED: Legislators from both parties need to be urged to protect these dual-eligibles, and ensure that get the drugs they need. Health advocates are urging their members and allies to call their Assemblymembers and Senators to:

  • Support AB813(Perata/Nunez), to allow the state to continue emergency drug coverage for seniors and persons with disabilities so they get needed prescription drugs if Medicare Part D fails.
  • Support a budget item that has the state, in the budget process, agree to cover the newly-imposed co-payments for low income senior and disabled people, living on fixed incomes.
Health Access California promotes quality, affordable health care for all Californians.
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