NCPA - National Center for Policy Analysis

Can State Prescription Plans Fill The Medicare Gap?

December 4, 2000

As president, George W. Bush is expected to make provision of federal funds to state prescription drug assistance programs for low-income seniors a top priority. His proposal, "Immediate Helping Hand," would provide states $48 billion over four years until a federal program could be implemented under Medicare.

But just how successful would such state efforts be? As of 1999, 13 states offered programs providing prescription drug coverage to just over 760,000 Medicare beneficiaries, or between 10 and 16 percent of the total number of low-income beneficiaries who lacked coverage. The income limits vary widely from 100 percent to 225 percent of the federal poverty level. Enrollment levels vary by state:

  • One of the oldest programs, Rhode Island's, has the highest enrollment level at 18 percent of all Medicare beneficiaries in the state, similar to the estimated 19 percent of low-income Medicare beneficiaries nationally without coverage.
  • New Jersey (16 percent), Maine (12 percent) and Pennsylvania (10 percent) come the closest to Rhode Island.
  • Following these states, the percentages drop off precipitously with 5 states having four percent or less enrolled.

Perhaps the most relevant experience is the 1997 State Children's Health Insurance Programs (SCHIP). All 50 states made the initial deadline to request SCHIP funding, but only 10 met the deadline to raise enrollments to the required level within three years, and two of those had existing programs grandfathered into SCHIP.

Although every state signed on for the SCHIP program, the same might not be true for drug assistance programs that are time-limited and ultimately revert to Medicare. States would have to invest administrative time and effort in design and development, and many will not be willing to make such a commitment to a program that would be dismantled four years later.

Source: Marcia Clemmitt, "Faster, Stronger, Better: Can State Prescription Aid Fill the Medicare Gap?" Medicine & Health Perspectives, October 15, 2000, Faulkner & Gray's Healthcare Information Center, 1325 G Street, NW, Suite 970, Washington, D.C.


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