04/2002: State Legislative Update

Published April 1, 2002


A bill (SB 470) introduced by State Sen. Jack Hill (D) would create a prescription drug discount program for Georgia residents age 55 and over. Drug manufacturers who sell medications through state-supported programs, including Medicaid, would be required to pay rebates to the state Department of Community Health. The state would use the rebate money to reimburse pharmacies, which would in turn give drug discounts to residents. Georgia already receives about $185 million each year in rebates from drug companies through Medicaid, according to state Rep. Ron Stephens (R).


Gov. George Ryan (R) announced a $52.8 billion fiscal year 2003 budget proposal cutting Medicaid provider reimbursements and closing a mental health center. Following cuts in Medicaid spending over the last few months, Ryan’s latest proposal calls for $756 million in additional cuts, reducing payments to doctors, dentists, pharmacists and nursing homes participating in Medicaid. The Illinois budget plan also uses the tobacco settlement and federal funds for spending on additional health benefits for seniors, including prescription drug assistance.


Gov. Frank O’Bannon (D) announced $6.5 million in cuts to the state’s CHOICE program, which provides home health care to the elderly. That decrease is part of overall cuts of $109 million O’Bannon made to cover the state’s $1.3 billion budget shortfall. O’Bannon previously had announced a $250 million cut from the state’s Medicaid program, which has grown by 48 percent over the past six years.

Further cuts to Medicaid are possible. O’Bannon said he will find ways to trim an additional $203 million from the overall state budget in order to reach total cuts of $782 million. The cuts take effect this July.

Prescription drug benefits and eligibility for the state’s senior drug program, HoosierRx, would expand under amendments attached to SB 107, which reauthorizes the state’s prescription drug advisory committee.

The bill, proposed by State Rep. Vaneta Becker (R), increases the minimum annual drug benefit from $500 to $1,000 and the maximum from $1,000 to $2,000. The bill expands eligibility from 133 percent to 200 percent of poverty and calls for the state to apply for a Medicaid waiver to cover the drug costs of additional seniors, as well as to seek rebates from pharmaceutical companies.


Gov. James McGreevey (D) released a proposal imposing deep cuts in health care spending to counter a $2.9 billion state budget shortfall this year. The budget plan calls for cutting $22.5 million in Medicaid reimbursements to providers. The plan would use $740 million from last year’s budget surplus; $50 million from the Disabilities Fund; $30 million allocated but not yet spent by the Senior Gold program, which helps cover the cost of seniors’ health care; and $11 million from the Medical Malpractice Recovery fund. McGreevey is also counting on saving $327 million by skipping payments to health and retirement funds for state employees.


The legislature closed the 2002 session passing three of the governor’s six policy priorities for reforming the drug war in his state. Gov. Gary Johnson (R) was pleased the legislature passed measures preventing abuse of asset forfeiture laws, allowing offenders to receive Medicaid assistance after release from prison, and giving judges more discretion in sentencing nonviolent habitual users.

Johnson regretted the legislature’s opposition to legalizing medical marijuana, decriminalizing possession of small amounts of marijuana, and sending nonviolent first- and second-time offenders to treatment centers instead of prison.


Gov. Mark Schweiker’s (R) budget plan for the next fiscal year would close a loophole in the state’s Medicaid law, which would drop about 7,500 people from the program and save the state about $10 million. Currently, all children with disabilities are allowed to receive benefits through the state’s Medicaid program, called Medical Assistance, regardless of family income.

Under Schweiker’s proposal, the state would allow children with disabilities to receive Medicaid benefits only if their annual family incomes do not exceed $100,000 for a family of four.


The state House and Senate each released budget plans for the next fiscal year. Although very different, both proposals signal the state is poised to ration government services. The Senate plan is more generous than the House plan concerning services to those with mental illnesses. The Senate would restore cuts proposed by former Gov. Jim Gilmore (R) to community-based care programs for the mentally disabled.


Under a bill (SB 6368) passed by the Senate, the state would create a list of “preferred” drugs for many common illnesses and use that list to “negotiate lower prices with drug manufacturers.” The bill is aimed at reducing the state’s $1 billion drug costs during the current two-year budget cycle. In year one, the preferred drug list would apply only to 500,000 Medicaid beneficiaries; thereafter, local governments, private companies, and uninsured residents could participate in the new formulary.

The bill, which still has to pass the House, calls for a panel of doctors and pharmacists to compare similar drugs and choose the cheapest one to put on a list of drugs the state will buy in bulk. The bill would permit doctors to prescribe drugs not on the list. The bill would “eventually” replace a similar prescription drug program that took effect this month.

That program, called “Therapeutic Consultation Service,” limits Medicaid beneficiaries to four brand-name prescriptions per month. If a patient attempts to fill a fifth brand-name prescription in a month, the pharmacist contacts the beneficiary’s physician, who must contact a pharmacist hired by the state for approval.


Gov. Scott McCallum’s (R) proposed budget plan for fiscal year 2003 would eliminate funding for 14 community health centers that provide care for low-income and uninsured people. The clinics have received funding from the state only for the past three years, and McCallum’s budget proposal would cut $3 million in state support next year, leaving the centers reliant on federal support alone. Community center officials have complained that federal aid is not guaranteed, leaving them in a precarious financial position.

The State Legislative Update is compiled from a wide range of news sources, including the Council for Affordable Health Care (CAHI) http://www.cahi.org; the National Association of Health Underwriters (NAHU) http://nahu.org; Bizjournals at http://bizjournals.com; Stateline at http://stateline.org and Lexis/Nexis research.