All 50 States Save Even More Than Expected With New Medicare Drug Benefit

All 50 States Save Even More Than Expected With New Medicare Drug Benefit

This week, the Centers for Medicare and Medicaid Services (CMS) notified all 50 States that they will save even more money than previously expected now that prescription drug coverage for their Medicaid and Medicare beneficiaries, known as dual eligibles, is being covered entirely under Medicare. Recent news that the overall cost to provide Medicare prescription drug coverage dropped 20 percent allowed CMS to make the decision to further reduce States' liabilities. This amounts to over $700 million in savings nationally and $113 million in savings for California.

"I applaud the CMS announcement, which is good news for California," said Congressman Bill Thomas. "States will retain more of their money in their budgets, while Medicare ensures all dual eligibles have access to affordable prescription drugs. Again and again, the new Medicare drug benefit program is showing that competition drives down prices."

As of January 1, all dual eligibles are covered by the new Medicare prescription drug benefit. As part of that transition, states will continue to pay a percentage of the costs for coverage of their dual eligibles, but less than they had been paying under the old system. Participation in the Medicare prescription drug program has been very strong since enrollment began on November 15, 2005. As of last month, 21 million beneficiaries are receiving their prescription drugs through Medicare. Nearly four million of those signed up for the stand-alone Medicare drug plan.

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