Thursday, December 7, 2006

NCSL on Medicare Part D and state budgets

The Medicare Part D drug benefit has not—at least to date—significantly affected most states’ budgets, according to a new survey of Medicaid officials in 47 states. Fourteen states are paying about the same for drug coverage for “dual eligibles” under Part D as they were when those beneficiaries received that coverage through Medicaid (see chart, below). Twelve states report paying more, and eight states say they’re paying less.

On Jan. 1, 2006, Medicare began covering prescription drugs for the approximately 6.2 million beneficiaries dually eligible for Medicaid and Medicare. In exchange for covering the drug costs of these beneficiaries, states must make payments to Medicare (popularly known as the “clawback”).

Meanwhile, most states report that they don’t expect the Deficit Reduction Act of 2005 (DRA) to significantly reduce their spending on pharmacy benefits. The DRA gave states greater flexibility in how they manage their Medicaid programs, including the ability to increase cost-sharing for prescription drugs. Twenty-three states said they are unlikely to increase cost-sharing.

State Perspectives on Emerging Medicaid Pharmacy Policies and Practices was conducted by the National Association of State Medicaid Directors in collaboration with Avalere Health. Go to:

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