Rhode Island is submitting to the federal government today an ambitious
plan for a new Medicaid program to pay for prescription drugs for
low-income elderly and a narrow group of disabled people. As many as
30,000 Rhode Islanders could benefit.
If the plan is approved -- considered likely in eight or more weeks --
low-income elderly people will have coverage for all the medications
they need, with small out-of-pocket costs.
Additionally, people with severe, chronic mental illnesses, who have had
psychiatric medications paid for by the state, would also have coverage
for drugs to treat physical conditions.
And significantly, unlike other parts of Medicaid, the proposed pharmacy
program qualifications would place no limit on the amount of assets a
person holds.
By transferring three existing state-funded programs to Medicaid -- the
health plan for the poor that is jointly financed by the state and
federal governments -- the state will collect the 54-percent federal
reimbursement that goes to all Medicaid programs. The federal money
provides leeway to expand existing state services.
"As this goes forward, we're going to be able to hold constant the
state's share," said Jane Hayward, director of the state Department of
Human Services. "You're not going to be spending any more state dollars.
You're going to be able to cover more people, and you're going to give
them a wider range of pharmaceuticals."
"This will have phenomenal impact," said Lt. Gov. Charles J. Fogarty,
who initially proposed the effort in this year's legislative session.
Today, after hammering out the details for two months, state officials
will present to the U.S. Centers for Medicare & Medicaid Services an
application for a waiver of Medicaid rules.
After Congress failed to enact legislation to help the elderly pay for
Medicare, the Bush administration issued "an open invitation" to the
states to seek Medicaid waivers for drug coverage, Hayward said.
Illinois was the first to be granted such a waiver, and several others
are seeking the same. The proposed programs are similarly structured,
Hayward said, speeding the approval process.
Most elderly people get health care through the federal Medicare program
for people 65 and older. But Medicare does not cover prescription drugs.
In Rhode Island, low- and middle-income elderly people can participate
in Rhode Island Pharmaceutical Assistance for the Elderly, or RIPAE,
which subsidizes drug expenses. But RIPAE pays only a portion of the
cost -- 15 percent to 60 percent, depending on the person's income. And
it covers only drugs for certain conditions.
If the waiver is approved, most people who rely on RIPAE can turn
instead to Medicaid for drug coverage. Medicaid will pay for any
medically necessary drug. And the individual's out-of-pocket costs will
be much less, ranging from $2 to $25 per prescription.
RIPAE will not be dismantled, however. People whose incomes are too high
for the new Medicaid program will still be eligible for RIPAE subsidies.
With this smaller group, who are middle-income people getting smaller
subsidies, RIPAE's costs will drop from $11.9 million to roughly $3
million.
These are the groups that the proposed program, called the Healthy Rhode
Island Pharmacy Program, will serve:
Low-income elderly. Single people 65 and older with annual incomes of
$17,720 or less and couples with $23,880 or less are eligible. This will
include most, but not all, of the people who currently get subsidies
through RIPAE.
Chronic mentally ill. Currently, some 1,900 people 19 and older, who are
treated by the community mental health centers, receive state-funded
psychotropic medications that they need to avoid being
institutionalized. With the waiver, these people can continue to get
their psychiatric drugs, but also will be covered for drugs to treat
medical conditions, such as high blood pressure or diabetes.
Like everyone in the new pharmacy program, the mentally ill will also
have coverage for a yearly visit to a primary-care doctor. But this
group has the greatest need for this benefit; the only doctors many see
are their psychiatrists.
General Public Assistance. Some 1,100 people 19 to 65, who are disabled
and in need of drug treatment, get their prescriptions paid for by the
state, at a cost of $900,000 per year. The benefits for this group will
not change, but the state will collect 54-percent federal reimbursement,
cutting its costs in half.
In the current fiscal year, the state has budgeted $13.3 million to pay
for drugs for these three groups.
If the waiver is approved, the new Healthy Rhode Island Pharmacy program
is expected to cost $20.5 million -- but the federal government will
reimburse a little more than half.
The program also contains measures to discourage people who already have
drug coverage from dropping it to go on Medicaid. People who have
prescription-drug insurance (as do many elderly who participate in
Medicare HMOs) can use the Medicaid money when their coverage is
exhausted. Additionally, higher-income eligibles will be offered a $25
incentive to keep their drug coverage instead of using the waiver
program. This option will appeal to those with low drug costs.
Yesterday, Hayward described the Healthy Rhode Island Pharmacy Program
to the Long Term Care Coordinating Council, a General Assembly-created
group that assesses long-term-care needs. She acknowledged that the
program was complicated and would require a major public-education
effort.
"Are you prepared to do multiple road shows?" asked council member
Elizabeth Earls.
"Absolutely," Hayward said.
