Lower Costs of Medicare Drug Coverage to Help States Save $700 Million in 2006
2006.02.09: Lower Costs of Medicare Drug Coverage to Help States Save $700 Million in 2006
The states will send more than $700 million less to the federal government in 2006 because lower drug costs and strong competition have reduced the price tag for Medicare's new drug coverage, HHS Secretary Mike Leavitt announced today.
The competitive marketplace is working to help federal and state governments, and most of all, Medicare beneficiaries, drive down costs," Secretary Leavitt said.
The Medicare Modernization Act requires the federal government to pay prescription drug costs for people in Medicaid who had previously been covered, in part, by the states.
The actual or "net" costs to the federal government, accounting for Medicaid savings, are also significantly lower over 10 years, dropping from last year's estimated $737 billion to $678 billion.
For the 10-year period from 2006-2015, the "total" Medicare drug benefit cost, without accounting for Medicaid savings, is now estimated to be about $130 billion less -- $797 billion compared to an estimated $926 billion last year.
