Posted At Kansas City Star

BY : Alan Scher Zagier

A new federal program designed to provide more seniors with affordable prescription drugs is instead a costly and illegal drain on the state treasury, Missouri's attorney general said Monday in announcing plans to sue the federal government.

Missouri stands to lose $400 million over the next five years, Attorney General Jay Nixon said, including an estimated $20 million it must pay to Washington later this month.

Missouri joins California as states that plan to challenge the costs of the new Medicare Part D program, which began Jan. 1. Kentucky and Texas may also join the fray, Nixon said.

"Not only has this federal plan left many Missouri seniors without needed medication and with questions, it's saddled Missouri taxpayers with hundreds of millions of dollars in additional costs," Nixon said at a new conference at the Columbia/Boone County Health Department.

Implementing the new program has been a logistical ordeal, with tens of thousands of elderly subscribers nationwide unable to obtain medicine promised by the government. As a result, about two dozen states, including Missouri, have intervened to cover the costs of discounted drugs.

Many of those caught in the bind are seniors and people with disabilities who previously received reduced-cost drugs through Medicaid, the federal health care plan for the poor. Without their knowledge, the new program assigned a large number of so-called "dual eligibles" to Medicare. An estimated 135,000 state residents fall into the dual designation.

Maneuvering through the new rules has been "a nightmare" not only for drug recipients but also for pharmacists, said Steve Hollis, manager of community services for the Boone County health department.

Nixon called the requirement that states funnel savings from Medicare Part D back to the federal government one that "infringes on state sovereignty" and requires states to pay a tax to the federal government.

He was joined Monday by state Rep. Judy Baker, D-Columbia, a member of the House Senior Citizen Advocacy Committee.

"Some might say this is the same thing Boston tea parties are made of," Baker said.

The Democratic attorney general, who intends to oppose Republican Gov. Matt Blunt in 2008, emphasized the bipartisan concern among states.

California, Kentucky and Texas are led by Republican governors, with California and Kentucky having Democratic attorney generals.

"We expect other states to follow," said Nixon.

In a written statement issued Monday, Blunt acknowledged the problems created by the federal program but stopped short of endorsing his future electoral rival's planned lawsuit.

"We have made the federal government aware of our very real concerns with the federal clawback payment," Blunt said. "We will continue to work with them to resolve our differences and will work with the attorney general to ensure that any litigation is based upon the facts.

"We want to make sure that a lawsuit doesn't make the problem worse and create more obstacles for seniors who rely on the program to get their medicine."

Relying upon outdated Medicare cost figures from fiscal year 2003, the federal "clawback" payment further penalizes Missouri by not acknowledging more recent improvements that have reduced state costs, Nixon said.

The Medicare Part D formula for determining the clawback also includes a 35 percent inflation rate for the past three fiscal years - more than double the actual increase in Missouri.

State lawmakers have set aside nearly $100 million in the current fiscal year and an additional $200 million in the next fiscal year for those payments, Nixon said. He said that money is sorely needed to ease the sting of Medicaid cuts enacted last year.

The lawsuit will be filed directly with the U.S. Supreme Court in the coming weeks, Nixon said.