Elder drug plan a priority in Congress

By Derrick DePledge
Advertiser Washington Bureau

WASHINGTON — Life on a budget can be draining, but Lucia Valentin and her husband, Adelino, make it work.

The retirees, who live in senior housing on Kaua'i, usually go without luxuries such as movies or nights on the town and eat dinner every night in the cafeteria of a local hospital to save a few dollars.

But they can't scrimp on prescription drugs. Lucia takes two medications since her hysterectomy and Adelino takes four medications since his heart bypass. Their out-of-pocket drug costs last year were $1,500 — not overwhelming, but still tough on a fixed income.

"And that doesn't count when we get sick," said Lucia, 79, a former civil service worker for the Navy. "If I didn't have a strict budget, we would go over, and we wouldn't have the money to buy the things we need."

Congress, at the urging of President Bush, is close to an agreement that would for the first time add a prescription drug benefit to Medicare, the federal health program for the elderly and disabled. House and Senate negotiators still must work out significant differences between competing versions of the legislation, but with a presidential election year approaching, there is pressure to act on an issue important to older voters.

Sen. Dan Inouye, top, and Sen. Daniel Akaka both added language to the Medicaid bill. Advertiser library photos

The Senate version of the bill has two provisions important to Hawai'i.

Sen. Dan Inouye, D-Hawai'i, added language to expand Medicaid to cover the healthcare costs of Native Hawaiians who seek treatment at the state's federally qualified health centers or through the Native Hawaiian Health Care Systems. American Indians and Native Alaskans already enjoy similar coverage under Medicaid, the federal health program for the poor.

Inouye's staff estimated that the benefit would cost the government $2 million to $3 million a year.

Sen. Daniel Akaka, D-Hawai'i, inserted language that would provide Hawai'i with about $19 million a year to help hospitals that serve a disproportionate share of Medicaid and uninsured patients. Hawai'i would have to match the federal aid with about $13 million in state money.

Hawai'i stopped receiving the federal money for hospitals after it adopted its QUEST managed care demonstration program in 1994. Other states with similar demonstration programs have since had federal aid restored.

Inouye and Akaka voted for the Medicare bill in the Senate despite reservations that the prescription drug provisions are inadequate. U.S. Rep. Neil Abercrombie, D-Hawai'i, and U.S. Rep. Ed Case, D-Hawai'i, voted against the bill.

"This bill is so full of loopholes that it will be worthless for people in real-life situations," Abercrombie said.

The legislation would offer a prescription drug benefit as part of Medicare in 2006. Under the Senate version, seniors would have to pay a $420 annual premium and a $275 deductible. Seniors would pay half of drug costs up to $4,500 in expenses, pay all drug costs for expenses between $4,500 and $5,800, and pay 10 percent of drug costs when expenses exceed $5,800. In the House version, seniors would pay a $420 annual premium and a $250 deductible. Seniors would pay 20 percent of drug costs up to $2,000 in expenses, all drug costs between $2,000 and $4,900 in expenses, and no costs when expenses exceed $4,900.

Low-income seniors and the disabled would receive discounts on premiums, deductibles and co-payments. Private health-insurance providers would offer the drug programs, although the Senate version would authorize Medicare to administer the program if no private drug-insurance plans are available in certain regions of the country.

States, impatient with the federal government, have already been experimenting. The U.S. Supreme Court in May allowed Maine to move forward with plans to negotiate directly with drug companies on lower drug prices for the uninsured.

The Hawai'i Legislature passed two bills last year modeled after the Maine approach, but both initiatives — and how they would fit within any new federal guidelines — are under review by a state task force appointed by Gov. Linda Lingle. Hawai'i Rx, scheduled to take effect next July, would establish a purchasing pool that could negotiate with drug companies for lower prices. Healthy Hawai'i would enable people who earn 300 percent of the federal poverty level to qualify for drugs under lower Medicaid prices.

Earlier this year, the federal Department of Health and Human Services rejected Hawai'i's request for a waiver necessary to implement Healthy Hawai'i. The Legislature has since changed it to give the government the option of limiting participation. But the Lingle administration has not committed to filing another waiver request.

Advocates for seniors and the poor estimate that the two programs would provide drug coverage to about 220,000 people.

Lingle has offered her own program, Hawai'i Prescription Care, started with a $3 million grant from the Harry & Jeanette Weinberg Foundation, that could help 20,000 low-income people with chronic illnesses obtain free or low-cost prescription drugs.

Greg Marchildon, state director for AARP Hawai'i, said the federal Medicare legislation is flawed, but he is encouraged that lawmakers appear serious about helping.

State Rep. Roy Takumi, D-Pearl City-Palisades, who has been involved in drafting the Hawai'i prescription drug programs, said he worries that many seniors will fall into the gap in the federal legislation where they have to pay the full cost of prescription drugs. He also said the legislation could divert money from other Medicare benefits.

Lucia Valentin, the retiree on Kaua'i, said any help with drug costs is better than nothing.

Larry Wheeler of Gannett News Service contributed to this report.