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Medicaid Officials Warn Dual Eligibles Could Face More Coverage Disruptions

MAY 18, 2006 -- Coverage disruptions that occurred for "dual eligibles" who were moved from Medicaid to Medicare for their drug coverage could happen again next year, according to interviews with state Medicaid officials conducted on behalf of the Kaiser Commission on Medicaid and the Uninsured.

Changes in plan options and in the low-income subsidy benchmark premium could result in the need for many duals to select or be auto-enrolled into new plans, raising administrative, fiscal and access issues similar to those encountered when six million duals who had been receiving drug coverage from Medicaid were switched to the Medicare prescription drug program on Jan. 1, according to findings that were released at a Kaiser Family Foundation forum Thursday.

Other problems the Medicaid officials cited in the report include:

  • While implementation problems were anticipated, the Centers for Medicare and Medicaid Services (CMS) was unable in some cases—due to statutory limitations—or unwilling in others to respond to issues that states had raised in advance about transferring all duals to Medicare for drug coverage.
  • While the downward revision of the "clawback" amount in February 2006 may have been good news for states, the fiscal impact remains unclear for many states. The Medicare drug benefit requires the Medicare program to pay prescription costs for people in Medicaid who had previously been partially covered by the states. In turn, states are required to pay back to the government a smaller contribution—known as a clawback—from some of the money they save. While lower clawback amounts could reduce expected costs and result in state savings faster than previously anticipated, more evaluation is needed.
  • Concerns remain that CMS' process to repay states for costs they incurred during the transition of duals to the Medicare drug program may not be applied consistently across all states. State officials remained concerned about their financial obligation under the clawback.
  • An array of concerns remain with duals and implementation of the Medicare drug benefit, including the ability of duals to meet copayment requirements and the possible health consequences and the Medicaid "spend down" eligibility process, which refers to beneficiaries eligible for "medically needy" programs who have high medical expenses and are allowed to "spend down" income that would otherwise exceed Medicaid thresholds in order to attain eligibility.

CMS spokesman Peter Ashkenaz said the agency has addressed many of the concerns raised in the report and improvements are ongoing. "People are getting their prescriptions filled," Ashkenaz said, adding that the Medicare drug program is filling 3 million prescriptions a day.

Ashkenaz also said states will be reimbursed for their costs after they submit their information to CMS in the format they have agreed to.

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