The health reform law's $250 rebate checks for seniors with high prescription costs was "intended to provide fiscal relief to seniors, not states," Health and Human Services Secretary Kathleen SebeliusKathleen SebeliusNew Dem Kansas gov reinstates protections for LGBT state employees Next Kansas governor to reinstate LGBT protections for state workers Progressives set to test appeal of prairie populism in Kansas primary MORE said in a letter sent Friday to Vermont Gov. Jim Douglas (R).

Sebelius urged Douglas to rethink his plan to reduce state benefits to seniors who are eligible for the federal rebates.

Vermont has a program, called VPharm, that provides supplemental pharmaceutical coverage for low-income seniors who aren't eligible for Medicaid assistance. The cash-strapped state has decided to recoup the $250 its seniors are getting from the federal government. 

The first rebate checks were mailed this week, to about 80,000 seniors who have fallen into the so-called "doughnut hole" where they have to pay the full cost of their prescription drugs under Medicare. The rebates are the first step towards closing the "doughnut hole," and are expected to be one of the most popular measures in the new health reform law. 

"Seniors who enter the 'donut hole' have serious illnesses, take more medication, and need additional financial help," Sebelius wrote.