States React to Bush’s Proposals to Expand Prescription Drug Coverage to More Low-Income Seniors

Several states are responding to two programs President Bush proposed last month that would expand prescription drug coverage to more seniors. Under the first program, which Bush outlines in his FY 2003 budget, the federal government would offer states $77 billion over 10 years to provide prescription drug coverage to Medicare beneficiaries with annual incomes between 100% and 150% of the federal poverty level, or between $11,610 and $17,415 for a couple. States, which would administer and determine eligibility for the program, would cover 10% of the cost. The federal government would cover 90% of the cost of the program. A second program, called Pharmacy Plus, would allow 18 states that already offer prescription drug coverage through Medicaid to apply for a federal waiver to expand their programs to cover more low-income seniors. Under the program, states would provide prescription drug coverage to seniors with annual incomes up to 200% of the federal poverty level, or $17,180 for an individual and $23,220 for a couple. HHS approved the first such waiver for Illinois last month. (Kaiser Daily Health Policy Report, 1/29). A summary of several states' reactions to the programs appears below.

• South Carolina: Gov. Jim Hodges (D) announced Jan. 30 that he has asked for a federal waiver to expand SilverCard, the state's prescription drug program for seniors, to cover an additional 40,000 Medicare beneficiaries. The waiver would give South Carolina an additional $72 million in federal Medicaid matching funds per year; the state currently spends $24 million per year on SilverCard. SilverCard now covers 38,000 seniors (Sheinin, Columbia State, 1/31). Currently under SilverCard, individual seniors with annual incomes between $8,591 and $15,032 and couples with annual incomes between $11,611 and $20,317 receive a 10% discount on prescriptions up to $500 per year. After participants reach the $500 cap, they pay $10 per generic drug and $21 per brand-name medication ( AP/Charleston Post, 1/31). Hodges said that "he's confident the government will support the state's request" to expand the program (Columbia State, 1/31).
• Tennessee: State officials have said that Bush's plans to help seniors with prescription drug costs would give Tennessee, which already covers some drug costs for low-income seniors, an estimated $3.5 million in savings per year. In the last fiscal year, which ended June 30, Tennessee spent about $103 million on prescription drugs for more than 200,000 seniors who are enrolled in TennCare, the state's Medicaid managed care program. The federal government contributed $180 million last year. TennCare covers medication costs and other services that Medicare does not cover, such as nursing home care, for seniors who either have low-incomes or cannot obtain private insurance coverage for their drug costs. But TennCare spokesperson Lola Potter said that Bush's proposal might require Tennessee to cover drug costs for more Medicare beneficiaries through TennCare, the cost of which would "offset" the estimated $3.5 million in savings. Tennessee spends $1.8 billion per year on TennCare. Potter said that the state would have to further investigate the plan "to see what the additional impact there could be" (Snyder, Nashville Tennessean, 1/31).
• Texas: If Texas decides to ask for a federal waiver to expand its Medicaid program to cover low-income seniors' drug costs, the move could "further strain" the state's budget for social services programs, the Ft. Worth Star-Telegram reports. The state's Medicaid program is expected to face an estimated $142 million deficit when the current two-year budget cycle ends in September 2003. Acting Lt. Gov. Bill Ratliff (R) said, "We've got some real challenges making ends meet with existing Medicaid programs, so adding new ones to the mix will not be an easy task" (Moritz, Ft. Worth Star-Telegram, 1/31).