Overhaul of Senior Rx plan called a good prescription

Friday, May 28, 2004 | 9:20 a.m.

CARSON CITY -- Hoping to avoid capping enrollment, the state plans to overhaul Nevada's Senior RX program, which helps an estimated 9,000 low-income seniors pay for their prescription drugs.

Rising drug prices and increased use by existing members have resulted in financial problems for the program in the past year.

State Human Resources Director Mike Willden said Thursday a restructuring is needed to lower the costs. The state is preparing bids to get one of the 28 to 30 federally approved Medicare drug discount firms to take over operation of Senior RX.

Assembly Majority Leader Barbara Buckley, D-Las Vegas, said the idea "sounds very prudent." She said the goal of the program is to get as many seniors covered as possible.

Buckley had pushed for a full state-operated program three years ago but then reached a compromise with the Guinn administration, which insisted it be private insurance coverage.

With the present contract, the state pays $65 a month per enrollee to Professional Risk and Asset Management Insurance Service of Brea, Calif., to cover the cost of drugs. Professional Risk also receives an additional $14.87 per month for each enrollee to run the program, secure the pharmacy network, buy insurance to cover costs if they were to exceed $65 a month and pay the state's 3.5 percent insurance tax. The insurance is purchased from Fidelity Security Life Insurance Co. of Kansas City, Mo.

"We have an opportunity to lower our administrative costs to allow expanded enrollment," Willden said

Willden said that so far the average drug cost has not run higher than the $65 per month, so the state think it can jettison the insurance policy it buys to cover any overages. The state instead would monitor the costs to ensure they do not exceed the budget, he said.

Prices have been running about $61 to $62 a month, Willden said. A year ago, the average bill for prescription drugs per person was $47 to $48.

Neither Professional Risk nor Fidelity Security will be included in the new structure. Professional Risk is not certified as a federal Medicare drug discount firm, Willden said.

The program has a budget this year of $7.8 million and a budget of $9.5 million next fiscal year.

To qualify, a person must be 62 years old or older, must have lived in Nevada for at least one year and must have an income less than $22,016 for an individual or $28,660 for a couple. There are no monthly premiums, but participants have a co-pay of $10 for generic drugs and $25 for preferred prescriptions.

There is a cap of $5,000 in benefits each year for a senior.

Guinn instituted the program in 1998 using money from the tobacco settlement. The Legislature kicked in an extra $2.8 million last session to allow the enrollment to rise to 12,000 from 7,500.

Getting a company that is certified by the government for the Medicare program will enable the federal and state benefits to be coordinated, Willden said, adding that he hopes a contract with a new provider can be signed by September.