News Release

Pennsylvanians Get 'Win-Win' in Drug Program Pact

PACE Program to Work with New Medicare Drug Coverage

A new agreement between the federal government and the Commonwealth of Pennsylvania will allow 300,000 Pennsylvanians in the state�s pharmaceutical assistance program to continue or enhance their drug coverage at substantial savings to the state, according to U.S. Secretary of Health and Human Services Mike Leavitt.

Secretary Leavitt and Pennsylvania Gov. Ed Rendell announced the agreement today in Philadelphia. It enables Pennsylvania to supplement, or �wrap around,� the PACE (Pharmaceutical Assistance Contract for the Elderly) program with the new Medicare prescription drug coverage in a way that will be seamless from the standpoint of PACE beneficiaries.

�The agreement ensures that Pennsylvanians in PACE can continue their same level of benefits, and that Pennsylvania seniors and people with a disability who are not in PACE can get access to prescription drug coverage in 2006 through Medicare,� Secretary Leavitt said. �This will save seniors money, provide them peace of mind, and, most importantly, help them stay healthy.�

Secretary Leavitt praised Gov. Rendell, U.S. Senators Arlen Specter and Rick Santorum, and the Pennsylvania congressional delegation, for their assistance in getting to today�s agreement.

The Medicare prescription drug coverage provides new, subsidized drug coverage for all 2.2 million people with Medicare in Pennsylvania, regardless of income, health status or current prescription drug usage. It also provides extra help for those beneficiaries with limited means. Because Medicare will now cover the costs of a substantial part of the PACE benefits, the state will be able to provide PACE-level benefits at a much lower cost.

�Today�s agreement is a �win-win� for the Commonwealth, its seniors, and everyone who depends on Medicare,� said Mark B. McClellan, M.D., Ph.D., administrator for the Centers for Medicare & Medicaid Services (CMS), which administers Medicare.

PACE beneficiaries do not need to take any immediate action to continue to receive their PACE benefits in 2006. PACE beneficiaries with limited income and assets will receive assistance from the state, Medicare, and the Social Security Administration to enroll in Medicare�s low-income subsidy, which will enhance the coverage they receive and provide additional financial relief to the state. In general, these beneficiaries will pay no premium and only a few dollars for each prescription. Other PACE beneficiaries will receive information and assistance from PACE in the weeks ahead on how their coverage will work with Medicare, and they will experience no reductions in benefits or pharmacies.

Other key features of today�s agreement include:

• PACE can help people with Medicare identify and enroll in a Medicare drug plan based on their preferences. This will be accomplished by putting information on their prescription usage into a software program, which will provide a list of a subset of available plans based on such features as the particular formulary details and pharmacy networks matching a beneficiary�s recent drug use. The kinds of features to be used, and the guidance provided to beneficiaries, will reflect the guidance on state assistance developed by CMS that is already being used by a range of states with prescription assistance programs.
• Prescription Drug Plans (PDPs) that wish to enroll PACE participants must support a seamless coordination between the Medicare drug benefits and the PACE coverage.
• CMS and PACE officials will work together to make it easier for PACE participants to enroll in drug coverage, much as CMS is working with state pharmaceutical assistance programs in New Jersey, New York and many other states.