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F I S C A L I M P A C T R E P O R T
SPONSOR Feldman
ORIGINAL DATE
LAST UPDATED
02/14/06
HB
SHORT TITLE
SUPPORT FEDERAL MEDICARE CHANGES
SM 8
ANALYST Weber
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
NFI
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Human Services Department (HSD)
Department of Health (DOH)
SUMMARY
Synopsis Senate Memorial 8
Senate Memorial 8 makes the following observations.
the Medicare, part D program is proving to be one of the most complicated programs ever
created with significant and serious implementation problems; and
the benefits promised to senior citizens are not being realized because the program is so
difficult to understand; and
a dire need exists to revise the program so that the program can provide the promised
benefits.
The memorial requests that due to the preceding conditions that the members of the New Mexico
congressional delegation be requested to support the following changes to the Medicare, Part D
program.
elimination of the penalty for all
Medicare
-eligible individuals who do not enroll by May
15, 2006;
pg_0002
Senate Memorial 8 Page 2
inclusion of a requirement that the prescription drug plans drop coverage of drugs on
their formularies only after one year advance notice to coincide with the annual open
enrollment period, except that drugs that have been determined to be dangerous or
removed from the market may be dropped as necessary;
standardization of the formulary design so that each plan has the same number of tiers
and requirements for coverage;
modification of the requirements about what can be counted toward a
Medicare
beneficiary's true out-of-pocket cost to include all prescription drugs purchased on behalf
of the beneficiary regardless of where the drugs have been purchased; whether the drugs
have been purchased through a state pharmacy program or with a discount drug card; or
whether the drug is on the formulary of the beneficiary's plan;
assurance of transparency so that states know the cost negotiated by the prescription drug
plan to ensure that all negotiated rebates are passed through to the beneficiaries; and
institution of price negotiation for the purchase of prescription drugs for the
Medicare
program, similar to the provisions already in place under
Medicaid
and t
he veterans'
administration;
It is further requested that copies of this memorial be transmitted to each member of the New
Mexico congressional delegation.
SIGNIFICANT ISSUES
Human Services offers the following comments.
Significant problems regarding access to drugs and the cost of drugs for the new
Medicare Part D beneficiaries have been reported nationally. All the provisions in this
memorial would lessen the problems and financial burden of low income Medicare Part
D recipients. There would likely be increased costs to the federal government if these
changes were to be made.
Formulary changes without adequate notice are a significant problem for all recipients.
Because of the significant implementation issues, eliminating the late penalty for late
enrollment would allow additional time for the Centers for Medicare and Medicaid
Services to iron out these issues.
A change in the definition of True Out Of Pocket (TrOOP)/Incurred Costs would more
accurately count recipient expenses that are tied to increased program benefits.
Federal legislation is being introduced to help rectify problems associated with the new
Medicare Part D benefit. This memorial would give non-binding direction to the New
Mexico congressional delegation on how to react to this legislation.
MW/nt