Experimental Medicare Prescription Drug Programs Created

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Experimental Medicare Prescription Drug Programs Created

Adding a prescription drug benefit to Medicare is under study by the federal government. The Health Care Financing Administration (HCFA) recently announced a three-year trial Medicare prescription drug program that commences July 1st. The program is an attempt to determine whether providing prescription drug benefits can save Medicare money by keeping beneficiaries more healthy and out of hospitals. It also will allow HCFA to test the most cost-efficient way to provide, structure, and manage a prescription drug benefit.

HCFA officials also revealed plans recently to approve the expansion of a state Medicaid prescription drug trial program in Vermont to include people in the state of Maine. (Medicaid programs are administered by the individual states but must operate under HCFA guidelines.) Under the expansion, persons who do not otherwise qualify for Medicaid benefits would be able to buy their medications at the same price that Medicaid would pay. The state programs would be open to uninsured persons with incomes up to 300% of the federal poverty level or about $25,000 for a single person and $33,750 for a couple. Savings are expected to be about 17% to 25% of what patients would pay at local retail pharmacies. The Pharmaceutical Research and Manufacturers of America, a trade group representing drug makers, sued the federal government to overturn the program in Vermont. A federal judge refused to halt the initiative, paving the way for HCFA to expand the program to Maine.

Sources: `Trial Medicare Drug Program Created,` Associated Press, January 19, 2001. `Judge Refuses to Halt Vermont`s Prescription Plan,` Ross Sneyd, Associated Press, January 17, 2001.

For a related story, see `Gridlock Forces State Action to Control Rising Drug Prices,` The Social Security & Medicare Advisor, Mar. `01, V6#4.

This article first appeared in Volume 6, Issue 5 of "The Social Security and Medicare Advisor" newsletter (April/2001). To receive future editions of "The Advisor" in its special, free e-mail version, please click here.