House Resolution 23

A RESOLUTION MEMORIALIZING THE UNITED STATES CONGRESS TO REINSTATE THE MEDICARE PRESCRIPTION DRUG, IMPROVEMENT AND MODERNIZATION ACT OF 2003, REVOKING ANY MEDICARE PROVISION WHICH PRECLUDES STATES FROM NOT BEING ABLE TO PURCHASE, AND PROVIDE FOR ITS ELDERLY AND DISABLED CITIZENS.

      WHEREAS, on December 8, 2003, the President signed into law the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173, hereafter the "act"); and

      WHEREAS, under the act, a drug benefit will be made available to Medicare beneficiaries starting in 2006, which will be delivered through private risk-bearing entities under contract with the United States Department of Health and Human Services; and

      WHEREAS, the act also provides for an interim prescription drug discount program to be made available starting in June, 2004, and continuing through the end of 2005; and

      WHEREAS, the act provides for premium, deductible, and other cost-sharing subsidies for beneficiaries who are dually eligible for Medicare and Medicaid, or have incomes below 150 percent of the federal poverty level; and

      WHEREAS, under the act, low-income beneficiaries must meet an asset limit in order to qualify for the drug coverage subsidies; and

      WHEREAS, beneficiaries with incomes below 135 percent of the federal poverty level who do not have Medicaid coverage do not have to pay any enrollment fee to enroll in a drug discount card plan and will receive up to a $600.00 credit in 2004 and another $600.00 credit in 2005 towards the cost of drug purchases; and

      WHEREAS, in order to receive the $600.00 subsidy for a drug discount card, beneficiaries cannot be receiving or be eligible for any other drug coverage; and

      WHEREAS, under the act, beneficiaries may not change prescription drug discount cards once they have enrolled in the drug plans, except for a one-time change at the start of 2005; and

      WHEREAS, under the act, sponsors of discount cards will be able to charge enrollees up to a $30.00 annual enrollment fee and will be free to make changes in the discounts available to enrollees and in the drugs covered by the cards simply by posting the changes on the Internet; and

      WHEREAS, to enroll in the drug plans established through the act in 2006, beneficiaries will be required to pay an annual premium equal to an estimated $420.00 and an annual deductible equal to $250.00, after which the plans will cover 75 percent of the cost of covered drugs up to an initial $2,250.00 coverage limit, none of the cost of drugs between the $2,250.00 coverage limit and a $5,100.00 upper limit, and most of the cost of drug expenditures above the $5,100.00 cap; and

      WHEREAS, no expenditures by third-party coverage sources may be used to satisfy the coverage gap under the act, referred to as the "doughnut hole," requiring beneficiaries to pay their own out-of-pocket funds to meet the catastrophic coverage cap under the bill; and

      WHEREAS, only expenditures for drugs that are covered by a drug plan's formulary may be used to satisfy the coverage gap under the act; and

      WHEREAS, according to the Congressional Budget Office, by indexing premiums, deductible, and other cost sharing limits for

beneficiaries to increases in the cost of drugs under the drug

program created by the act, the indexing provisions in the act will result in premiums increasing to $696.00, deductibles increasing to $445.00, the initial coverage limit increasing to $4,000.00, and the out-of-pocket spending cap increasing to $6,400,00 in 2013; and

      WHEREAS, the act precludes the United States Department of Health and Human Services from negotiating with drug manufacturers and wholesalers the costs of drugs to be made available under the new drug benefit and instead relies on individual sponsors of the drug discount cards, the prescription drug plans and Medicare Advantage managed care plans providing prescription drug coverage to negotiate the rates for drugs; and

      WHEREAS, individual sponsors of drug discount cards and

prescription drug plans and Medicare Advantage managed care plans are unlikely to receive the same low prices the federal government would get by negotiating collectively for beneficiaries, as evidenced by highly successful federal purchasing programs such as the Veterans Administration; and

      WHEREAS, the act makes importation of drugs by wholesalers and individuals legal only if the Secretary of the United States

Department of Health and Human Services certifies that the

importation poses no additional risk to the public's health and

safety, and the current Secretary of Health and Human Services has

stated that he cannot make the certification; and

      WHEREAS, as of January 1, 2006, states will no longer be able to receive federal Medicaid matching funds to cover prescription drugs for dual eligible beneficiaries, including funds to help meet cost-sharing requirements or to cover drugs not covered under the new drug benefit due to a plan's formulary, with the result that drug coverage for dual eligible beneficiaries will likely be reduced as a result of the act; and

      WHEREAS, under the act, states must make financial maintenance of effort payments to the federal government for the cost of coverage for dual eligible beneficiaries which are the product of three elements:  (1) a "take back" factor, which is set at 90 percent for 2006 and phased down to 75 percent in 2015; (2) the number of dual eligibles; and (3) the per capita level of spending by state Medicaid programs in 2003, trended forward through 2006 by a growth factor; and

      WHEREAS, as a result of the financial maintenance of effort

requirements in the act, states including California will experience little fiscal relief from the assumption of prescription drug coverage for the dual eligible population by the Medicare program; and

      WHEREAS, in 2004, the act has resulted in potential problems of patient access to cancer treatment in doctor's offices, because the payment amounts for 2004 for some drugs are lower than the price at which physicians can purchase them; and

      WHEREAS, for 2005 and later years, the act reduces the payments for cancer treatment drugs and administration services further relative to their 2004 levels, with no mechanism for adjustments to ensure that the payment levels are not lower than the prices at which physicians can purchase them; and

      WHEREAS, under the act, $900,000,000.00 million is appropriated to the federal Centers for Medicare and Medicaid Services for administration of the act, including funds to educate beneficiaries about their options; however, no funds are specifically allocated for the Health Insurance Counseling and Advocacy Program, the primary entity responsible for direct one-on-one unbiased counseling regarding Medicare benefits; and

      WHEREAS, as a result of the provisions of the act, beneficiaries face limited protection from the rising costs of prescription drugs:

      NOW, THEREFORE, BE IT RESOLVED BY THE HOUSE OF REPRESENTATIVES OF THE STATE OF MISSISSIPPI, That we memorialize

the Congress and President of the United States to enact and sign

into law revisions to the Medicare Prescription Drug, Improvement,

and Modernization Act of 2003, to eliminate or significantly reduce state maintenance of effort payments to the federal government for the costs of drug coverage for dual eligible beneficiaries; and to require that a portion of the funds appropriated to the Centers for Medicare and Medicaid Services be allocated to the state Health Insurance, Counseling and Advocacy Program to ensure that Mississippi's Medicare beneficiaries receive the necessary counseling and assistance to understand all of their health coverage options.

BE IT FURTHER RESOLVED, That copies of this resolution be transmitted to the President of the United States, Members of the United States Congress, the Governor of the State of Mississippi and to the members of the Capitol Press Corps.