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Medicare drug program to cost states $$

In a posting on, John Rodat has written an excellent summary of the unintended (or perhaps not…) consequences of the Medicare Drug program. Namely, and I quote…
–“Lots of Medicaid clients are also Medicare clients.
–Lots of these “dually eligible” folks are sick and use lots of pharmaceuticals.
This is especially so for those in nursing homes
–So when the Federal government created the new pharmaceutical benefit, it recognized that it would be paying for drugs that were previously being paid for under Medicaid. That would simply have shifted the cost from states to the Federal government
To offset that effect, the new law includes a provision (tenderly called the “clawback”) that establishes a formula by which the states pay the Federal government.”
And, this formula may well cause some states to pay the Feds more than they gain from the Medicare Drug program…
Kudos to Mr. Rodat for his insight.
What does this mean for you?
More supply-fueled demand for drugs means higher total Rx costs.

Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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