Federal Assistance for New Jersey Senior Drug Program Delayed as Program’s Budget Deficit Increases

Whether New Jersey will receive additional federal funding for its senior prescription drug assistance program is still unclear, leaving state officials to contend with a program budget gap while they continue to negotiate with federal officials, the Newark Star-Ledger reports. The Pharmaceutical Assistance to the Aged and Disabled program, or PAAD, allows more than 190,000 low-income seniors and people with disabilities to purchase prescriptions for $5 each, with the state picking up the remaining costs. The program is partly financed through the Casino Revenue Fund, which helps pay for senior programs, and when the fund's revenues fall short, the state makes up the difference using general and supplemental funds. With drug costs rising 15% per year and the casino fund's rising only 2% in fiscal year 2002, the state's contributions to the program have increased. For example, the state contributed $128 million to the program in the last fiscal year, compared with $53 million five years ago. Before the current fiscal year began, the program faced a $191 million budget deficit, and state officials requested $148 million in federal aid, meaning the state would be responsible only for the remaining $43 million. Ken Dolan of the Home Care Council of New Jersey and a PAAD advisory council member said, "Unfortunately, the money the state sought is already in the budget. It was fiscally imprudent to appropriate something for which there was no guarantee." Tom Vincz, a spokesperson for the state treasurer, said that the state is "adamant" that the budget gap will be closed, although he did not specify where the funds would come from. "We're prepared to take whatever steps are necessary," Vincz said, adding that the state is "committed to making sure we fulfill the obligation we have to the PAAD program." Amy Mansue, deputy chief of staff for Gov. James McGreevey (D), said the state is still in negotiations with federal officials and believes it is entitled to the federal funds. According to Mary Kahn, a spokesperson for CMS, which is reviewing the state's funding request, the agency told state officials last month that they must submit additional budget information (Silverman, Newark Star-Ledger, 1/5).