News Releases

New Study Examines States' Plans for Filling Medicare Part D Gaps

March 3 , 2006

Portland, ME - Some disabled and elderly citizens may face more limited drug coverage under Medicare Part D, the federal government's new prescription drug program, than they previously received through state programs, according to a report released by the Muskie School of Public Service at the University of Southern Maine (USM).

Prior to Part D, all states provided safety net drug coverage to poor, elderly and disabled persons through Medicaid programs and some through other state-funded programs, which in many cases provided coverage for more drugs and at lower cost than Part D. The new Part D benefit shifts the primary responsibility for providing drug coverage to the poor from the states to the federal government. States may elect to provide supplemental coverage, but must do so with state dollars.

The report includes findings from a survey of state programs, which indicates that most states-already required to help subsidize the federal Part D program for those dually-eligible for Medicare and Medicaid-do not plan to make up for the differences in coverage for this population. Other programs that serve the near-poor, particularly those that are ineligible for any federal subsidies, are trying to hold their enrollees harmless.

"Many states are acting in good faith to hold their enrollees harmless from reduced coverage under Part D," said Kimberley Fox, senior policy analyst at the USM Muskie School, "but only some are intending to fill the gaps in coverage for the poorest residents. Model state interventions, such as New Jersey and New York's coverage of some drugs denied by Part D, and New Jersey, Maine, Nevada, and Missouri's decision to cover the difference in co-payments for Medicaid beneficiaries are worthy of discussion and debate to ensure that the poorest Medicare beneficiaries are not worse off under Part D."

"Steps need to be taken to protect the disabled, elderly and very poor from this structural defect in the system," said Bill Foster, dean of the USM Muskie School. "This report helps us understand what has happened and look at ways to fix the problem."

The complete report by Kimberley Fox and Linda Schofield, Schofield and Associates Consulting, is available at http://www.muskie.usm.maine.edu/Publications/ihp/PartDStateSafetyNet.pdf.

Editor's note: For more information, contact: Kim Fox, USM Muskie School of Public Service, (207) 780-4950.

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