New Medicare law may reduce drug benefits in Vermont

Print More

(Host) The Medicare bill that President Bush signed on Monday could force some Vermonters to pay more for their prescription medicines. The bill sets up a new, federal prescription drug benefit. But it’s less generous than an existing state plan. And there are estimates it could cost the state several million dollars to fill the gap in coverage.

VPR’s John Dillon reports:

(Dillon) About 14,000 Vermonters now get pharmacy benefits under several state programs. But under the new federal bill, the state will no longer be able to use the federal share of Medicaid dollars to pay for those benefits.

Steve Kappel is a health policy analyst with the Legislature’s non-partisan Joint Fiscal Office. He estimates the new Medicare bill will cost the state several million dollars a year if officials decide to provide the same level of coverage that Vermonters now enjoy under the state program.

(Kappel) “Because the statute forbids the use of federal Medicaid dollars to wrap around the Medicare benefit, it means the state will be much harder pressed to provide the same benefits that those folks are getting now. They’ll lose the match. Even if the Medicare program will pick up half the cost, that still puts the state in more of a financial bind that it would be otherwise.”

(Dillon) Margaret Baghdoyan from Norwich now receives benefits under the state Vermont Health Access Plan, known as V-HAP. She’s concerned that the new federal law will hurt senior citizens in Vermont. Those who now qualify for the state program will receive less coverage – and have to pay more – under the new Medicare law.

(Baghdoyan) “So I think there’s going to be Vermonters, if V-HAP is superceded and put out of business, they’re not going to be able to afford the Medicare benefit and they’re not going to have V-HAP available to them any more. So they may have not drug coverage at all under this bill.”

(Dillon) The new law sets up income and asset guidelines that people must meet in order to qualify for certain benefits. Vermont doesn’t have an asset test for its prescription drug program. Baghdoyan worries that older women who may have modest savings but low income may no longer be eligible for many drug benefits.

(Baghdoyan) “Because I think there’s a lot of older women whose husbands have died and now they’re only income is Social Security and maybe they’re living on $700 or $800 a month income. But they do still have some savings. They had a little nest egg with their husband and maybe they have $20,000 saved, but their income is $10,000 a year. And they would have to pay the full premium and there’s no way they’re going to be able to afford that.”

(Dillon) The new Medicare bill is about 1,100 pages long and state officials are only now learning about its full impact on Vermont. Governor Jim Douglas supported the bill in part because it will increase Medicare reimbursement for Vermont hospitals and physicians.

For Vermont Public Radio, I’m John Dillon in Montpelier.

Comments are closed.