WHEREAS, over 40 million Americans, including approximately 186,000 Hawaii residents, receive health coverage through Medicare and are currently eligible to purchase prescription drug coverage through the Medicare Part D Program, which began on January 1, 2006; and

WHEREAS, over 6.4 million Americans, including 26,000 Hawaii residents, are eligible for both Medicare and Medicaid and are referred to as "dual eligibles"; and

WHEREAS, the dual eligible group, 60 percent of whom live below the poverty line, has more individuals who rely on healthcare than other Medicare beneficiaries, with more than 50 percent requiring assistance with activities of daily living or suffering from multiple chronic conditions, such as Alzheimer's disease, diabetes, pulmonary disease, or stroke; and

WHEREAS, the number of elderly residents in the state is expected to rise rapidly over the next two decades with one in four residents over the age of 60; and

WHEREAS, Medicare-eligible individuals enrolling in the Medicare Part D Program after May 15, 2006, face a cumulative one percent late-enrollment penalty for each month between the date they were eligible and the date they enrolled; and

WHEREAS, the enrollment penalty for Medicare Part B is ten percent per year on the standard premium amount, which is more predictable and less severe than the enrollment penalty for Medicare Part D; and

WHEREAS, Medicare beneficiaries must now navigate a new, complex system of multiple health plans to purchase coverage and receive prescription drug benefits; and

WHEREAS, each prescription drug plan has a different formulary, different co-payments, and varied cost-sharing that Medicare beneficiaries must understand to determine which plan has a formulary that not only includes most, or all, of the beneficiaries' drugs, but also offers the best value; and

WHEREAS, beneficiaries face a great deal of uncertainty as each plan is allowed to modify its formulary, including dropping coverage of medications, on a monthly basis, while most Medicare beneficiaries may only change plans once a year during the open enrollment period; and

WHEREAS, a beneficiary who needs a drug that is suddenly dropped by the chosen plan must change to another drug or pay out-of-pocket for the drug; and

WHEREAS, drugs not listed on the formulary that are purchased out-of-pocket by a beneficiary or paid for with a discount card or through a state pharmacy program do not count toward the beneficiaries' cost-sharing under the Medicare Part D plan; and

WHEREAS, plans are not required to disclose complete information about the actual price of the drugs on their formularies nor the cost of these drugs as negotiated by the plan with drug manufacturers, resulting in the opportunity for plans to inflate prices charged to Medicare beneficiaries who will then have a higher total cost-sharing amount; and

WHEREAS, many states will have additional costs associated with the "clawback" provision of the Medicare law, which requires states to reimburse the federal government for the costs of dual eligibles based on a formula that may not accurately reflect actual costs and numbers of these enrollees; and

WHEREAS, states will also incur significant costs if they participate in educational and other efforts necessary to ensure that dual eligibles and other Medicare enrollees do not have a gap in coverage and have adequate information with which to make informed choices between plan options; and

WHEREAS, the State initiated a fail-safe program that covered dual eligibles' prescriptions if their claims were not processed through the drug plans offered by the new Medicare Part D Program, and paid 480 claims in a four-day period from January 1, 2006 to January 4, 2006, to ensure that patients received their medications; and

WHEREAS, the Medicare law explicitly prohibits negotiations over the price paid by the federal government for prescription drugs; and

WHEREAS, these same medications currently provided to dual eligibles under Medicaid are subject to price negotiation by the federal government, and the costs of these medications, which will be reimbursed by the states to the federal government, are likely to increase in the absence of price negotiation; and

WHEREAS, according to the Congressional Budget Office, the new Medicare Part D Program is expected to increase spending by $47 billion in 2006, the first year of implementation, and reach $174 billion per year in 2015, when it will make up 23 percent of the $766 billion in total Medicare spending; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2006, that the President and Congress of the United States are requested to adopt the following changes to the Medicare Part D Program:

and

BE IT FURTHER RESOLVED that certified copies of this Resolution be transmitted to the President of the United States, the Speaker of the United States House of Representatives, the President of the United States Senate, and the members of Hawaii's Congressional delegation.

Report Title:

REQUESTING THE PRESIDENT AND THE CONGRESS OF THE UNITED STATES ADOPT CHANGES TO THE MEDICARE PART D PROGRAM