ARIZONA STATE SENATE
Allows, beginning October 1,
2001, eligible persons to receive financial subsidies for prescription drugs
through the Arizona Health Care Cost Containment System (AHCCCS).
Background
According to the State
Health Insurance Assistance Program, as of January 1, 2001, some health care
insurers dropped coverage of their Medicare health maintenance organization
(HMO) plans for approximately 31,000 Arizona Medicare beneficiaries. Medicare HMOs continue to serve Maricopa,
Pima, Pinal and Santa Cruz counties.
The remaining plans have set maximum brand-name drug benefits or have
removed brand names from formularies, raised co-payment requirements or have
eliminated prescription medication benefits completely.
According to 1999 federal
Health Care Financing Administration (HCFA) national health expenditure data,
the costs of prescription medications grew 17 percent in 1999. Also, the average cost per senior was $1,196
per year. In response to the
prescription medication needs of seniors and disabled individuals, particularly
those with low income, 23 states have implemented some type of pharmaceutical
assistance program. A recent state
trend is to lower pharmaceutical prices for broader categories of consumers,
such as Vermont and Maine have enacted.
Vermont’s plan uses their
Medicaid program to extend discounts on prescription drugs to all seniors and
other adults who are without prescription drug coverage and whose income is
below 300 percent of the federal poverty level (FPL). The Vermont program was
implemented in December, 2000. Maine’s
program includes state price controls for public consumer purchases and is
scheduled to begin on April 1, 2001.
S.B. 1110 allows, beginning
October 1, 2001, an eligible person to receive a financial subsidy from AHCCCS
for prescription drugs equal to the average rebate pharmaceutical manufacturers
pay AHCCCS pursuant to federal law.
Additionally, this legislation requires AHCCCS to apply to HCFA for a
waiver for the expanded pharmaceutical drug coverage.
The fiscal impact associated
with the provisions of S.B. 1110 is unknown.
1. Allows, beginning October 1, 2001, an eligible person to receive a financial subsidy from AHCCCS for prescription drugs that is equal to the average rebate pharmaceutical manufacturers pay AHCCCS pursuant to federal law.
2. Limits eligibility to persons who qualify for Medicare, are from households with income between 100 and 300 percent FPL and do not have prescription drug coverage.
3. Requires AHCCCS to apply for a waiver from HCFA to allow the expanded coverage and allows AHCCCS to negotiate for expanded coverage if the waiver request is denied.
4. Prohibits, beginning October 1, 2001, AHCCCS from including coverage of outpatient prescription drugs under any prepaid capitated contract and requires AHCCCS to provide outpatient prescription drug coverage through rates negotiated with pharmaceutical manufacturers pursuant to federal law.
5. Defines “federal poverty guidelines”.
6. Contains conforming and technical changes.
7. Provides for a general effective date, except as noted.
Prepared by Senate Staff
February 9, 2001