The Senate’s Medicare prescription bill requires individuals who are eligible for both Medicare and Medicaid to receive their drug benefits from their state Medicaid programs. These people are known as dually eligible individuals. This proposal is contrary to the interest of these vulnerable elders and people with disabilities, as well as of others, for many reasons, including the following:

1. Dual eligibles have paid their Medicare taxes over the years just like other Medicare beneficiaries, and should not be denied the same Medicare benefits available to all other beneficiaries.

2. The question is not whether dual eligibles will get a better benefit under Medicare or Medicaid. As with other coverage, if prescription drug coverage for duals were included in Medicare, Medicaid would provide wrap around drug coverage. Duals would get the benefit of both Medicare’s coverage and Medicaid’s coverage.

3. If only in Medicaid, dual eligibles are left to the vagaries of 51 state Medicaid programs, with 51 different eligibility requirements and 51 different versions of coverage. Moreover, coverage will not "travel" with them if they move around the country.

4. Dual eligibles whose Medicaid eligibility fluctuates from month to month depending on medical bills will experience constant breaks in coverage as they move from Medicaid to Medicare and back to Medicaid again.

5. Carving out dual eligibles for separate treatment undermines Medicare’s universality which has been a hallmark of the program and has contributed to its popularity and strong support over the years.

6. Carving out dual eligibles for separate treatment undermines Medicare’s underlying financing principle of spreading risk over the broadest number of persons possible.

7. Because prescription drugs for dual eligibles cost states nearly $6 billion a year, states will have incentives to reduce their eligibility for elderly and disabled persons to drive their dual eligibles into Medicare for their drug benefit. Currently, thirty-six states have eligibility standards higher than the minimum required by federal law and thus could reduce their coverage. Such a move not will not only leave dual eligibles without any Medicaid coverage but those who are disabled and do not have Medicare coverage will have no health care coverage at all.

8. Similarly, because of the high cost of drug coverage for dual eligibles, states may be driven to increase restrictions on their prescription drug benefit, such as stricter formularies, preferred drug lists, and prior authorization. Such restrictions will affect all Medicaid beneficiaries, not just those who are dually eligible.

9. Also because of the high cost of drug coverage for dual eligibles, states may make it more difficult for people to become eligible for Medicaid, using complicated application forms, requiring significant documentation of income and resources, among other roadblocks. Such activity would undermine successful efforts of recent years to simplify state eligibility processes.

10. Because the ranks of dual eligibles will swell as baby boomers reach age 65, and because prescription drug costs increase at a rate faster than general inflation, states will face fiscal pressures from both increasing numbers of individuals eligible for Medicaid and spiraling drug costs. These pressures may have adverse impacts on the entire Medicaid program, causing states to adopt cut backs in eligibility and services for all groups.

11. Low-income Medicare beneficiaries eligible for, but not receiving, Medicaid will have difficult and confusing decisions to make about whether to apply for Medicaid and thus lose their Medicare prescription drug benefit. There is not likely to be sufficient information available for them to make intelligent choices.

12. No other version of Medicare prescription drug legislation in recent years has excluded dual eligibles from coverage. The "windfall" to state Medicaid programs from removing the financial burden of prescription drug coverage for dual eligibles can be corrected by requiring states to pay back some of their savings to the federal government, as the House bill does.

13. Dual eligibles are the neediest and most expensive to care for of all Medicare beneficiaries. To exclude them from a Medicare benefit gives lie to President Bush’s statement that "Medicare is the binding commitment of a caring society."

© Center for Medicare Advocacy, Inc.