NYSACRA

MEDICARE LEGISLATION TROUBLING

The President yesterday with much fanfare signed the Medicare drug bill.  The estimated cost is $395 billion over the next ten years and much larger amounts estimated beyond that.  For an in-depth analysis by the Center o­n Budget and Policy Priorities go to www.cbpp.org.  An article titled, ”The Troubling Medicare Legislation”, refers to the long-term effect o­n states in this way: 

”State Medicaid programs face serious long-term budget pressures as a result of the impending retirement of the baby-boom generation.  Rising drug costs for low-income Medicare beneficiaries who also qualify for Medicaid constitute a significant part of this problem, since drug coverage is the part of Medicaid that is growing most rapidly in cost, and drug costs are expected to grow still faster when the baby boomers retire in large numbers.  The House version of the Medicare drug legislation would have phased out state financial responsibility for providing drug coverage to low-income Medicare beneficiaries.  Such relief is likely to be essential if states are to be able to continue financing their share of Medicare costs without instituting deep Medicaid cuts, o­nce the baby boomers retire en masse.

The final Medicare legislation marks a major step backward from the House bill in this area; it removes most of the long-term fiscal relief the bill provided.  Under the final legislation, states will remain responsible in perpetuity for 75 percent or more of the drug costs for low-income elderly and disabled people that states would have incurred if these beneficiaries had continued receiving drugs through Medicaid.  Moreover, a sizeable share of the remaining savings will be consumed by new costs that the legislation imposes o­n states, such as the costs of determining eligibility for the new Medicare low-income drug subsidies.”

This article was in part authored by Melanie Nathanson, at the Center o­n Budget and Policy Priorities, an outstanding speaker at NYSACRA’s Medicaid conference in September 2003.  We’ll keep you posted o­n the impact of this legislation in NYS.

HEALTH INSURANCE SURVEY