Wednesday, February 02, 2005

House Appropriations on Dual Eligibles

Clicking on the title for this post will bring up the broadcast for the House Appropriations Committee meeting held this morning. (RealAudio is required to view the broadcast.) The second item on the agenda was a presentation regarding the state's "give back" requirement under Medicare Part D. The discussion occurs about 17:55 (minutes:seconds) into the broadcast and ends at about 58:00.

Melitta Bustamante, an analyst for the Legislative Budget Board, laid out the basics on the state's role in financing prescription drug coverage for Medicaid/Medicare dual eligibles beginning January 1, 2006.

At that time, dual eligibles will no longer be able to receive medications through Medicaid. Instead, they will receive them through Medicare. The medications themselves will come from private providers (HMOs, insurance companies) that choose to participate in providing this pharmacy benefit. Persons who are dual eligible will be able to choose (in most cases) among two or more programs. A premium and co-pays will be charged. Each provider will determine its own formulary.

The state will be required to "give back" to the federal government's Medicare program 90 percent of the amount that it would otherwise have spent on providing medications for this group of people. (The estimate is that there are 316,000 dual eligibles in Texas.) The amount of the "give back" will decline over a period of years until it reaches 75 percent, so that the state will eventually "save" 25 percent of the cost of providing medications to this population.

Questions from Representatives Vilma Luna, Dawnna Dukes, and Graig Eiland zeroed in on several elements still at issue on this program. Dukes spent a fair amount of time questioning what would happen when a needed drug is not on the formulary of the provider selected by a client. She also pointed out the heavy burden of co-pays on the low income population. Representative Luna discussed the problem of clients being targeted by aggressive marketing campaigns with the result that naive clients may end up signed up for (and financially obligated to) more than one program. Representative Eiland asked some pointed numbers questions about losses to Medicaid from drug rebates (suggesting that the cost savings of Medicare Part D are less than 10 percent).

If you're at all wonky, this is a good session to listen to. I just hope that your feed is better than mine. The whole committee looked like smurfs.

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