CMS Pulls Federal Funding From Wisconsin's SeniorCare Program

CMS last week rejected a request for a new Medicaid waiver for SeniorCare, a Wisconsin prescription drug program for low-income seniors, the Washington Post reports (Lee, Washington Post, 4/10). In 2005, before the implementation of the Medicare prescription drug benefit, HHS issued a waiver to allow Wisconsin to continue to operate SeniorCare until at least June 30. SeniorCare has no monthly premiums, lower copayments than the Medicare prescription drug benefit and no gaps in coverage. In addition, SeniorCare, unlike the Medicare prescription drug benefit, does not measure the assets of beneficiaries. Wisconsin Gov. Jim Doyle (D) requested a new waiver to allow the state to continue to operate SeniorCare for three additional years (Kaiser Daily Health Policy Report, 3/29). SeniorCare, which began in 2002, has enrolled more than 100,000 Wisconsin residents ages 65 and older with annual incomes less than 240% of the federal poverty level. Under SeniorCare, beneficiaries pay a $30 annual fee and copayments of $5 for generic medications and $15 for brand-name treatments after they reach an annual deductible based on income. SeniorCare beneficiaries with annual incomes more than $16,336 pay deductibles of $500 or $850, and those with annual incomes less than $16,336 pay no deductible. SeniorCare obtains medications at a discount through Medicaid, and Wisconsin officials negotiate additional rebates with pharmaceutical companies.

CMS Comments
According to acting CMS Administrator Leslie Norwalk, the agency rejected the request for a new waiver because the state has not provided evidence that SeniorCare reduces costs for the federal government as required. Norwalk also said that, because SeniorCare does not measure the assets of beneficiaries, "I don’t know whether or not these people would ever qualify for Medicaid." She said, "All they have done, basically, is shift costs to the Medicaid program that should not be borne there." In addition, Norwalk said that private plans under the Medicare prescription drug benefit can negotiate more comprehensive and affordable options for beneficiaries than SeniorCare (Lee, Washington Post, 4/10). CMS will allow Wisconsin to continue to operate SeniorCare until the end of the year to help with the transition to the Medicare prescription drug benefit.

Reaction
According to Doyle, Norwalk and other CMS officials did not consider evidence that SeniorCare reduces costs for the federal government, the Dow Jones/Milwaukee Journal Sentinel reports (Walters/Forster, Dow Jones/Milwaukee Journal Sentinel, 4/5). Wisconsin officials said that SeniorCare has saved the federal government a total of $669 million in Medicaid costs and estimated that the program would save an additional $400 million over the next three years. Jason Helgerson, director of the Wisconsin Medicaid program, said that the federal government pays $617 annually for the average SeniorCare beneficiary, compared with almost $1,200 annually for the average Medicare beneficiary enrolled in the prescription drug benefit. Helgerson said, "We think the empirical evidence is extremely clear that SeniorCare is more cost-effective than Part D and for the simple reason that we negotiate with the drug companies and the federal government doesn’t." Doyle said, "The Bush administration is making a terrible mistake. As a result, Wisconsin seniors will pay more and get less coverage, while drug companies make even larger profits. Our state won’t be allowed to negotiate better prices on behalf of our seniors as we do now" (Washington Post, 4/10). Doyle, state lawmakers and advocates for Wisconsin seniors said that they will seek to establish supplemental coverage for the Medicare prescription drug benefit in place of SeniorCare (Dow Jones/Milwaukee Journal Sentinel, 4/5).