Truth about PLADs, Medicaid, Medicare

By By Gene Taylor / U.S. Representative
July 20, 2004
On June 25, I faxed a letter to Gov. Haley Barbour urging him to reconsider the state's action to eliminate Medicaid coverage for about 65,000 retired and disabled Mississippians who are categorized as Poverty-Level Aged and Disabled (PLAD).
I am pleased that the governor has temporarily delayed the effective date until Sept. 15 and hope that he and the Legislature will use the delay to consider other alternatives to balance the state budget. In the month and a half since the state mailed the termination letters to PLAD beneficiaries, my offices have been flooded with phone calls from distressed seniors and their concerned families and friends.
The PLAD beneficiaries targeted by the state's Medicaid cuts are some of the most vulnerable citizens in the nation. They are not so poor that they qualify for full Medicaid coverage, but their incomes are less than $12,570 for an individual or $16,863 for a couple. That is not enough to afford prescription drugs for an elderly or disabled person with chronic health problems.
Severe disabilities
I have heard from people with severe disabilities, heart disease, cancer, diabetes, chronic pain, osteoporosis, neurological disorders, psychological disorders and many other chronic illnesses. I have heard from the families of many who are too ill to call or write me themselves. Many of those who will lose Medicaid drug coverage have numerous health problems and take expensive drugs for each chronic illness.
These people are not undeserving deadbeats. The PLAD population is made up largely of working people, or their spouses, who retired or became disabled after years of working and paying taxes, but do not have generous employer-provided pensions or health benefits.
Many PLAD beneficiaries are "dual-eligibles" who are covered by both Medicare and Medicaid. Medicare is a federal government health insurance program for people 65 and older and some people with disabilities. Those on Medicare also collect Social Security retirement, survivors, or disability benefits. They or their spouses worked and paid into Social Security and Medicare for years. Disabled residents who did not work enough to qualify for Social Security Disability benefits do not qualify for Medicare. If they are very poor they qualify for SSI benefits and full Medicaid. The benefits of those on SSI will not be cut by the state's Medicaid policy.
Medicaid provides insurance for those with low-incomes and is operated by states, though most funding comes from the federal government. In Mississippi the federal government pays 77 percent of the cost and the state provides 23 percent.
Some people have Medicare due to their age or disability but also have incomes low enough to qualify for some Medicaid assistance. These dual-eligibles receive their primary medical coverage from Medicare. Medicaid pays premiums, deductibles, coinsurance and a few benefits that Medicare does not cover, especially prescriptions. The state's plan would eliminate Medicaid as a "wrap-around" drug benefit for those who are on Medicare.
Some PLAD beneficiaries do not qualify for Medicare, so they rely completely on Medicaid for all their medical coverage. The state is seeking a waiver from the Bush Administration to allow Medicaid to cover those who do not have Medicare without helping those who have Medicare.
I am concerned about the effect the loss of Medicaid drug coverage will have on thousands of elderly and disabled Mississippians. This policy has erroneously been described as a transition from Medicaid to Medicare. That is not true.
All the PLAD beneficiaries who are eligible for Medicare are already on Medicare. The state is transitioning them from Medicare with Medicaid as a back-up for prescriptions to Medicare without Medicaid as a back-up for drug costs.
Drug discount cards
It is true that the federal government now offers a choice of drug discount cards for Medicare beneficiaries and a subsidy up to $600 for those with low-incomes. But this option is not an adequate substitute for Medicaid drug coverage.
The discount cards and the subsidy are intended to help Medicare enrollees who have no access to other drug coverage. The discount cards should not be used as an excuse for the state to drop Medicaid drug coverage for Medicare beneficiaries. Most of the retired and disabled Medicare beneficiaries affected by the state's action have much more than $600 in drug needs and will not be able to afford the extra costs.
In 2006, Medicare will offer prescription drug insurance plans and will subsidize the drug benefits of low-income enrollees. At that time, Medicaid will not need to cover drugs for anyone on Medicare because that would duplicate coverage. Medicaid coverage will not be duplicate coverage this year or next year or anytime before 2006.
The governor's Medicaid cuts are not needed to comply with the federal Medicare drug bill. No change in Medicaid drug coverage is needed until Jan. 1, 2006, when Medicare drug coverage begins.
The governor's office suggests that the thousands of Mississippians who lose Medicaid coverage will be able to receive free drugs from the pharmaceutical companies. As I explained in my letter to Gov. Barbour, my offices in Gulfport, Hattiesburg, Ocean Springs and Laurel have years of experience with the drug company's patient assistance programs. Some Mississippians who lose their Medicaid benefit will be able to get a few of their drugs, and my offices will help them to negotiate the complicated process, but most of those cut off from Medicaid will not receive free drugs and very few, if any, will receive all of their drugs.
I also seriously doubt that the drug companies will allow any state to stop buying millions of dollars worth of drugs and then give those drugs away for free.
U.S. Rep. Gene Taylor represents Mississippi's 4th Congressional District. Write him at 2311 Rayburn Building, Washington, D.C. 20515, or call (800) 273-4363.