Funding in Question for Maryland Senior Prescription Drug Subsidy Program

Maryland legislators are "scrambling to recoup" a potential loss of funding that effectively could end a prescription drug subsidy program for the state's seniors, the Baltimore Sun reports. The program, which began in July and serves more than 25,000 seniors, was intended to provide temporary drug coverage until Congress added a prescription drug benefit to Medicare. Under Maryland's program, Medicare beneficiaries with annual incomes up to 300% of the federal poverty level pay a $10 monthly premium and receive coverage for $1,000 worth of prescription drugs each year. When legislators created the program, state funds were not available, so they turned to CareFirst BlueCross BlueShield to manage and fund the program. CareFirst, which is currently trying to convert from not-for-profit to for-profit status, offers insurance coverage to individuals who are otherwise uninsurable in the private market; for providing such coverage, the state gives the company a more favorable rate for hospital services. When the drug program started, the state adjusted those rates and used the resulting savings to finance the drug program. However, because CareFirst is concerned about the cost of providing coverage to the uninsurable, the company may "phase out" that coverage, leaving the state without a way to fund and operate the drug subsidy program.

Looking for Funding
CareFirst officials said the company would work with state lawmakers to create new programs for the uninsurable and to help seniors with prescription drug costs. State House leaders also are considering legislation that would provide funding for the drug plan. For example, lawmakers may create a new "insurer of last resort" program that would cover the uninsurable, as well as manage the drug subsidy program. Losses from running the drug program would be covered by adjusting the hospital rates. Other lawmakers, however, hope to continue the current program. State Sen. Thomas Bromwell, chair of the Senate Finance Committee, said, "We've got to at least maintain what we have and hopefully finds nickels and dimes to make it better" (Barker, Baltimore Sun, 1/25).