Johnson Fights to Help States With Medicare as Program Works Through Troubles

Washington, DC— As the Administration struggles to work out many problems with the new Medicare Part D program, U.S. Senator Tim Johnson (D-SD) joined several colleagues to introduce legislation that would repay states that have provided funds to ensure that low-income people eligible for coverage receive it. Many individuals have been improperly denied coverage under the new drug program.

Johnson is a cosponsor of legislation, introduced today, that would require the federal government to reimburse states for emergency funding. South Dakota could spend as much as $1 million in emergency state funds to cover 30-day emergency prescriptions for those on Medicaid that will be transitioning to the Medicare program for their prescription drugs.

"It is my hope that the Department of Health and Human Services (HHS) works out the problems facing Medicare Part D," said Johnson. "But states should not have to pick up the slack of a program that HHS has clearly not been able to implement properly. I voted against the Medicare Part D plan when it passed in the Senate in 2004 because I had serious concerns about the program."

"One out of every six South Dakotans is a Medicare beneficiary," continued Johnson. "This prescription drug plan was overly complex from the start and has left seniors across the country confused and frustrated. The Administration acknowledges there are problems. States that have tried to help their seniors through this rough spot should not be penalized for flaws in the Administration's implementation of this plan."

Specifically, the bill will require the federal government to reimburse the states for the cost of prescriptions for low income seniors and people with disabilities ("dual eligibles") who were eligible for coverage under Medicare Part D, but were improperly denied Federal coverage.

It will reimburse states through an equivalent reduction in funds owed by each state under the "claw back" provision of the new Medicare law. Reimbursement will be at a rate equal to 100 percent of all State costs plus an interest rate equal to the market rate on 3-month Treasury Securities plus 0.1 percent.

The bill also directs the Secretary of HHS to recover overpayments by states to private prescription drug plans and return that money to the Medicare Trust Fund.

"This legislation is a first step in rectifying a flawed program that has caused unnecessary headaches for South Dakotans," concluded Johnson.

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