Effect of changes in Medicare unknown

Tuesday, Dec. 16, 2003 | 9:43 a.m.

CARSON CITY -- The new Medicare prescription program will have an impact on future state government budgets -- but officials said Monday they don't know if it will be a positive or a negative effect.

"There has been very little guidance from the federal government," said Chuck Duarte, who heads the state Medicaid program, whicht provides medical care for the needy, including senior citizens.

Duarte said any savings from the new program could revert to the federal government thanks to a so-called "clawback" provision in the law.

State Budget Director Perry Comeaux said the program could cost states money in the first three years of operation before savings kick in.

"I don't have any specifics on how it will affect Nevada," said Comeaux.

The federal program becomes effective in 2006, but the government is going to start distributing discount cards to eligible seniors to start using this summer.

Duarte, administrator of the state Health Care Financing and Policy Division, said an estimated 10,000 seniors on the state-run Medicaid program receive all of their drugs free and another 10,000 who are also eligible for Medicare.

Duarte said the state now pays the Medicare premiums for these people and also picks up the co-payment on their drug prescriptions.

The Medicare premiums will increase to cover the drug benefits. It is possible the state will have to pick up the extra cost for these premiums for this group, said Duarte.

He said his staff was on a telephone conference call with other states and federal officials last week about the possible impacts on the state.

He said even after a conference call with officials from other states last week, he still had little information on what the new federal law will mean to the states.

Medicaid is financed by the federal and state government and has more than 100,000 recipients ranging from infants to the elderly.

There appear to be some administrative costs to the state to register these people for the Medicare drug benefit, Duarte said.

"Dovetailing (the Medicare prescription drug program) to the Medicaid program is going to be a challenge," Duarte said.

State agencies have to start preparing their 2005-2007 fiscal budgets next summer.

The state is expecting an average of 178,126 people on Medicaid this year and 194,847 next fiscal year. The budget for the two years is $2.2 billion, of which the state will contribute an estimated $652 million. The federal government will put up $1.4 million and the rest will come from other sources.