HCS SCS SB 4, 1, 5 & 6 -- MISSOURI SENIOR Rx PROGRAM

SPONSOR:  Singleton (Abel)

COMMITTEE ACTION:  Voted "do pass" by the Committee on Children,
Families and Health by a vote of 15 to 0.

This substitute establishes a Missouri Senior Rx Program for
eligible seniors who reside in Missouri.  In its main
provisions, the substitute:

(1)  Repeals the current $200 prescription tax credit for
eligible seniors;

(2)  Revises the current resource limit used to determine
eligibility for persons who apply for public assistance.  The
resource limit for an individual is $1,500; for a married
couple, the resource limit is $2,500;

(3)  Increases the income limit to 100% of the federal poverty
level for persons eligible to receive Medicaid;

(4)  Establishes an 11-member Commission for the Missouri Senior
Rx Program within the Division of Aging in the Department of
Health and Senior Services.  The composition and selection of
members and duties of the commission are contained in the
substitute;

(5)  Establishes the Missouri Senior Rx Program within the
Division of Aging in the Department of Health and Senior
Services.  Various terms are defined;

(6)  Requires the commission to govern the program and to
solicit requests for proposals to administer the program from
private contractors.  The commission can administer the
pharmaceutical rebate program or contract with the Division of
Medical Services to administer the pharmaceutical rebate program;

(7)  Requires the commission to select a bid from the submitted
proposals to administer the program.  If no bids are received,
the program will be jointly administered by the Department of
Health and Senior Services and the Department of Social Services;

(8)  Sets eligibility criteria for participation in the
program.  Residents are eligible to apply to the program if they
are 65 years of age, have not received pharmaceutical benefits
for at least 6 months prior to applying to the program, have not
received Medicaid benefits, and meet income eligibility
guidelines.  Retirees who previously had health insurance before
retirement are not subject to the 6-month waiting period before
applying to the program.  Individuals who have benefits with a
actuarial value greater than or equal to the benefits in the
program are excluded from participation;

(9)  Establishes income eligibility limits of $17,000 for
individuals and $23,000 for married couples;

(10)  Makes the program the payer of last resort and not an
entitlement;

(11)  Requires that seniors submit an annual application to the
Division of Aging or the division's designee.  The commission
will develop and implement a means test requiring applicants to
meet the income requirement of the program.  In addition,
eligible enrollees are required to pay an annual enrollment fee
of $25 or $35 based on marital status and income level;

(12)  Prohibits requiring applicants to accept Medicaid benefits
in lieu of participating in the program;

(13)  Requires that participants pay an annual deductible to
participate in the program.  Deductible amounts are $250 or $500
per participant, depending on marital status and household
income;

(14)  Requires that enrollees pay 40% of the purchase price of
prescription drugs;

(15)  Establishes an annual program benefit limit of $5,000 per
enrollee;

(16)  Allows the Department of Health and Senior Services to
enter into a contract with any private individual, corporation,
or agency to implement the program;

(17)  Requires the division to utilize Area Agencies on Aging,
senior citizen centers, and related entities to provide
outreach, enrollment assistance, and education relating to the
program.  The division and the third party administrator are
responsible for informing eligible seniors about pharmaceutical
company benefits and other information;

(18)  Requires the commission to submit quarterly reports to the
Governor, Senate Appropriations Committee, House of
Representatives Budget Committee, Speaker of the House of
Representatives, and President Pro Tem of the Senate;

(19)  Requires that program benefits be supported by moneys
appropriated by the General Assembly;

(20)  Requires the commission to direct the third party
administrator to implement cost control measures if projected
costs exceed the current program appropriation;

(21)  Requires the program to cover eligible costs not covered
by a federal pharmaceutical assistance program if established;

(22)  Requires the commission to develop rules to implement the
program;

(23)  Makes any person who engages in fraudulent activities in
order to participate in the program guilty of a misdemeanor and
forfeits his or her rights to participate in the program;

(24)  Requires the program to be operational by July 1, 2002.
An initial enrollment period will be from April 1, 2002, through
May 30, 2002.  Beginning with calendar year 2004, open
enrollment periods will be held from November 1 through December
15 of the preceding calendar year;

(25)  Allows an individual a 30-day enrollment period outside
the established enrollment periods;

(26)  Requires that the program use generic prescription drugs
when available.  Enrollees may receive brand name prescription
drugs when a generic prescription drug is available only if both
the prescribing physician and the enrollee request the brand
name prescription drug, the enrollee pays the co-insurance on
the generic drug, and the enrollee pays the difference in price
between the brand name drug and the generic drug;

(27)  Requires that pharmacists participating in the program be
reimbursed for costs resulting from obtaining and dispensing
medications.  Reimbursement formulas for brand name and generic
medications are contained in the substitute;

(28)  Requires the division to issue a certificate of
participation to pharmaceutical manufacturers who participate in
the program.  A manufacturer can apply for participation in the
program by submitting an application approved by the
commission.  The length of participation, renewal provisions,
and confidentiality provisions are contained in the substitute;

(29)  Requires pharmaceutical manufacturers to provide rebates
under the program.  Rebates for brand name and generic
prescription drugs will be 15%.  Rebates will be used to fund
the program;

(30)  Prohibits a pharmaceutical manufacturer's status under the
current Medicaid program from being affected if the manufacturer
refuses to participate in the program; and

(31)  Creates a Missouri Senior Rx Program Fund which will be
administered by the State Treasurer.  The revenue sources for
the fund are specified in the substitute, and funds will not
revert to the General Revenue Fund.

The substitute contains a severability provision and an
emergency clause.

FISCAL NOTE:  Estimated Net Cost to General Revenue Fund of
$575,124 in FY 2002, $20,579,408 in FY 2003, and $8,777,621 in
FY 2004.  Estimated Net Income to Pharmaceutical Investment
Program for Seniors of $3,335,430 in FY 2002, $0 in FY 2003, and
$0 in FY 2004.

PROPONENTS:  Supporters say that the major purpose of the
legislation is to establish a prescription assistance program
for Missouri seniors with cost-control measures which will
provide prescription drug assistance while remaining within the
fiscal resources of the state.  Establishment of a
"clearinghouse" will allow for the dissemination of program
information to Missouri seniors; improve coordination between
existing state agencies and drug assistance programs; and
provide a centralized location were resources can be accessed by
Missouri seniors.

Testifying for the bill were Senators Singleton and Steelman;
and Health Policy R & D of Washington, D.C.

OPPONENTS:  Those who oppose the bill say that it is important
to establish a prescription assistance program which will
provide assistance for prescription drug purchases for Missouri
seniors as well as improve their quality of life.  Targeting the
income and resource limit changes to Missouri seniors aged 65
years of age or older will continue to burden persons affected
by physical and mental disabilities who have to meet the current
Medicaid "spend-down" requirement, unless a Medicaid waiver is
granted by the federal Department of Health and Human Services.
(This provision was removed from the substitute.)  It is
important that the Missouri legislature be in the forefront by
establishing a prescription assistance program which will
address the needs of a growing elderly population in Missouri.

Testifying against the bill were Representative Hollingsworth;
Coalition of Community Mental Health Centers; Paraquad of
Missouri; and National Alliance of the Mentally Ill.

Joseph Deering, Legislative Analyst

Missouri House of Representatives
Last Updated October 19, 2001 at 4:30 pm