Medicaid drug plan may cost $45 million more than budgeted

Human Resources Director Mike Willden told legislators Friday they may have to add $45 million more to his budget to cover unexpected costs of the new federal Medicaid Drug Prescription Plan.

When federal officials first made projections, he said, they estimated Nevada's Medicaid program would save $17.8 million over the biennium as those eligible moved to the Medicare program.

"That was done on information available last summer," he said. And those numbers were used to build his proposed budget.

"Right now, Medicaid is estimating savings may be only $3 million over the biennium. We're talking right now about a $15 million hole."

He said the program is huge, with an estimated 274,000 Nevadans eligible for the prescription drug program, 141,000 of those at reduced rates because they are classified as low income.

"We know Medicare is not going to cover certain drugs," he said. "The question is, do you want to cover drugs that are excluded?"

But he said the big unknown is what drugs won't be covered by the private plans that Medicare recipients must go through to get pharmaceuticals.

"There may be drugs they choose not to cover that Medicaid now covers," he said. He estimated that could cost $2.2 million a year.

"The primary issue for us is the mental-health drugs. These are the newer and safer drugs." he said.

"This number could look as ugly as $11 million a year," he told lawmakers.

Willden said the state has no choice because, if it doesn't pay for those drugs, people will stop taking them. When that happens, many more people end up in emergency rooms and hospitals, costing the state even more money.

Finally, he said it could cost another $2.6 over the two-year budget to cover copay costs for people eligible for Medicaid who will be pushed into Medicare. Medicaid doesn't have copay requirements.

Subcommittee Chairwoman Sheila Leslie, D-Reno, added up the total to almost $45 million needed over two years.

"I don't want our seniors to be less well off because of this wonderful program," she said sarcastically.

"This is a federal program that's turned out to have huge fiscal consequences for our state," Leslie said after the hearing. She said federal shortfalls like the Medicaid plan will quickly eat up any surplus state lawmakers may think they have this year.

- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.