HHS: health plans will reimburse states

Health-insurance companies will pay back states that are covering costs associated with the troubled rollout of the Medicare prescription-drug benefit, Health and Human Services Secretary Mike Leavitt said yesterday.

Congressional Democrats, joined by a handful of Republicans, have called for the federal government to reimburse the states for their unanticipated assistance in the first few weeks of the benefit. But Leavitt and Mark McClellan, the top Medicare official, insisted during a conference call with reporters that legislation is not needed.

"The plans will reimburse states' costs for the cost they would have paid. If there is a difference, Medicare will cover the difference," McClellan said.

Medicare beneficiaries who are also poor enough to qualify for Medicaid have encountered widespread problems getting their medicines in the first few weeks. Consequently, about 25 states have taken steps to guarantee access to drugs for those beneficiaries, whose drug coverage is being moved to Medicare from Medicaid. The federal government and the states jointly finance Medicaid.