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HomeMy WebLinkAboutCOM 0243.002 2002-2004 Opening Remarks by Senator.Ron Menor at April 11, 2 ufq~TJ~tional Briefing ~~t . - II LLJJ on the Healthy Hawaii Prescription Drug Progra~3 ~flY 2Q Pik 2 Q9 CCUf~ i;LE:'~'K COUNTY ; iF HAWAII The purpose of today's informational briefing/meeting is to review and discuss the status of Act 75 which the legislature enacted into law last session and which established the Healthy Hawaii program. For the benefit of some in this audience, let me provide a brief overview of what the Healthy Hawaii program is intended to accomplish. The program would allow individuals and families with incomes at or below 300 percent of the federal poverty level who do not qualify for Medicaid to be able to purchase prescription medications at discounted Medicaid prices. What this means is that a family of two earning approximately $41,000 and a family of four earning around $62,000 would be able to purchase the prescription drugs that they need at prices that could be discounted by as much as 40 percent. In addition, it has been estimated that the Healthy Hawaii program will benefit more than 150,000 residents of the state who have no coverage or have very poor drug coverage. I am sure that you would agree the number of people in our state who lack drug coverage is unacceptably high acid these statistics underscore the need for the Healthy Hawaii program. Comm. No. Ref. Tai Ref. Date 0 Page 2 In order to get this badly needed program implemented there are several things that need to be done. First of all, the State of Hawaii needs to obtain what is called a Medicaid waiver from the Center of Medicare and Medicaid Services, or CMS, which is part of the U.S. Department of Health and Human Services, in order for Hawaii to implement the program. We need a waiver because the Healthy Hawaii program is considered a Medicaid Demonstration Project under Section 1115 of the Social Security Act, since the program would extend the benefits of the Medicaid program by helping a population group that is not currently eligible under Medicaid to get discounted prescription drugs. I want to emphasize that the Social Security Act gives the Secretary of Health and Human Services and the Administrator of CMS broad discretion and authority to approve a state's Medicaid waiver application. That's why it is so important for government officials and concerned residents to actively lobby the appropriate federal agencies to approve the state's Medicaid waiver application. They must be made aware of the demand for this program in our state. Once the federal government approves the state's Medicaid waiver application, state funds will be needed to start up the program. The legislature appropriated $1.5 million for exactly this purpose last year. This money will cover initial administrative costs for the state department of human services to administer the program and provide payments to pharmacies so they can begin offering medications at discount prices. Page 3 The $1.5 million was intended as a one-time appropriation because under the program, the drug companies would reimburse the state through the rebates on drug sales, which the state would collect. Going forward, these rebates will cover the reduced prices for the medications that will be offered by pharmacies. However, at the beginning of this legislative session, the governor decided to restrict the $1.5 million that the legislature approved for implementation of the program. We must urge the governor to reconsider her position and to make certain those funds will be available if and when our state program receives federal approval. Finally, before the committees heaz from the various testifiers, I would like to address some enoneous statements that have been made about the Healthy Hawaii program. Myth No. 1: The Healthy Hawaii program cannot help anyone in the nearfuture because it is not scheduled to take effect until 2005. This statement is incorrect. The state can move towazd implementation of the Healthy Hawaii program as soon as the federal government approves the state's Medicaid waiver application and the governor frees up the $1.5 million. Some people have confused the Healthy Hawaii program with the Hawaii Rx program, another drug discount program enacted at the same time by the legislature. It is the Hawaii Rx program that is not scheduled to be implemented until Januazy 2005. Pagc 4 Myth No. 2: The Medicaid waiver for the Healthy Hawaii program will not be approved by the federal government because Medicaid waivers for similar programs czre tied up in court. This is also untrue. The programs whose Medicaid waivers have been held up in court aze different from the Healthy Hawaii program. The legislation that is the basis of the Healthy Hawaii program was written to avoid the issues that caused problems for other states. Moreover, there is no pending litigation with respect to the Medicaid waiver application for Hawaii or any other state. Again, the big drug companies and their allies are attempting to confuse the Healthy Hawaii program with a Maine program, similar to the Hawaii Rx program, which maybe affected by a case currently before the U.S. Supreme Court. Myth No. 3: The Healthy Hawaii program is unnecessary because Hawaii's problems will be resolved when the federal government enacts a tLfe/d'icaizl prescription drug /I~j f~c1; cci l program. This is wrong on two counts. First, even in the unlikely event that Congress can approve a program on which Republicans and Democrats agree that provides prescription drug benefits under Medicare, such a program would only cover Medicare beneficiaries, which means it is limited to people 65 years of age or older. Unlike Healthy Hawaii, which will help everyone in need, regardless of age, the federal legislation would provide no relief to middle income working people and their families, the working poor, and many senior citizens living on fixed incomes. These people make up a lazge percentage of those the Healthy Hawaii program would help. Pagc 5 Myth No. 4: The governor's voluntary prescription drug program is a viable alternative to the Healthy Hawaii program. Although the governor deserves credit for taking the initiative to help some of the people who cannot afford prescription drugs, if all goes well, her program will only help a fraction of those who would benefit from the Healthy Hawaii program. I have provided for members of the audience a comparison sheet that my office has prepared comparing the features of the Healthy Hawaii program with the governor's program. This side-by- side compazison clearly shows the broader reach and more extensive set of benefits provided by the Healthy Hawaii program, including the fact that the Healthy Hawaii program will cover over seven times more people who need relief from the high cost of prescription drugs. I hope that this overview has been helpful to you. Let's now proceed with the informational briefing. COMPARISON OF ACT 75 AND GOVERNOR LINGLE'S PRESCRIPTION DRUG PROGRAM Act 75, The Health Hawaii Act Governor Lin le's Pro ram* Number of Persons Served 150,000 20,000 Eligibility At or below 300% of federal poverty level Depends on drug company criteria, generally at or e.g., family of four with annual income of below poverty level, e.g., family of four with $64,000 annual income of a roximatel $20,000 Funding One-time $1.4 million appropriation from State $3 million donation by Weinberg Foundation and other donations for first two-year period Drugs Covered All physician-prescribed drugs Each pharmaceutical company decides which dru s the want to offer Generic Drugs Covered Unclear; may be determined on a case-to-case basis Enforcement Mandatory participation by physicians, hospitals, Voluntary participation by physicians and drug pharmacies and drug companies, as state law companies that may leave the program at any time dictates Predicted effect on budget Keeps working families out of poverty and off Requires income-earning individuals and families Medicaid roles, eliminating expense of state to continue spending household budget on drugs contribution to federal-state fundin until the aze oor enou h to uali Accessibility Easy to understand, access and participate in More complex than the Healthy Hawaii Act and using one cazd difficult for consumers to understand which drugs will be covered and which company cards they must use * Based on information about the program disclosed to date ~g ;M1~y~ 1 S~FS$~~-~.. ~~TP ~PYL2ItP ~intr of 1~nianii STF.TE Ci..°IT February 25, 2003 Secretary Tommy G. Thompson U. S. Department of Health and Human Services 200 Independence Avenue, S.W. Washington, D. C. 20201 Deaz Secretary Thompson: We, the undersigned senators of the Hawaii State Legislature, ask for your support in obtaining approval of the pending Medicaid waiver application for the Healthy Hawaii program, which was enacted into law last session and submitted to your department by the State Department of Human Services. The Healthy Hawaii program would utilize the Medicaid program to provide discounts on prescription drugs to all Hawaii residents whose incomes are within 300 percent of the federal poverty level. This group of beneficiaries includes thousands of working families and senior citizens throughout the state. Projections indicate Healthy Hawaii will benefit more than 150,000 of Hawaii residents. The legislation that created this program was passed overwhelmingly with bi-partisan support in both houses of our state legislature. Moreover, the Healthy Hawaii Act included an appropriation of $1.5 million dollars to implement the program. In addition to paying start-up costs, the appropriation should reassure those responsible for its approval at the federal level that the State of Hawaii intends to invest its own funds in this much-needed program and does not expect the federal government to be the sole funding source. As you are well awaze, even in the event that Congress approves one of the proposed prescription drug benefit plans under Medicare, it would not solve the prescription drug issue in Hawaii, since the federal measures would only cover Medicare beneficiaries, who are all over 65 years old. Unlike Healthy Hawaii, which helps everyone in need, regardless of age, the federal legislation would provide no relief for low-to-middle- income working families and for the elderly under the age of 65 who make up a large portion of those who would benefit from the Healthy Hawaii program. These people must not only deal with the high cost of living in our state and the economic downturn that has affected their household incomes, but also, there are some residents who face the threat of personal bankruptcy if they are forced to pay the full price of the prescription medications they need. ' Page 2 Hawaii State Senate Letter to Secretary Thompson Healthy Hawaii Program In addition to the support expressed by the legislature, the program has generated widespread backing in the community, among consumer groups, such as AARP, and the major metropolitan newspapers in our state. We stand ready to do whatever is necessary to work with the Department of Health and Human Services to implement this important program. Thank you in advance for your consideration of our request to help secure approval of the Medicaid waiver, so that the benefits of this program can finally be realized by thousands of Hawaii families and individuals. Sincerely, (\7 u~~ C~