Gov. Chris Gregoire and the nation's top health official announced Saturday morning that the state will allocate $14 million to cover the co-pays for the state's poorest residents in the new Medicare prescription-drug plan.

The announcement came after Health and Human Services Secretary Mike Leavitt met with the governor as part of his nationwide tour to reassure states that problems with the new prescription-drug coverage are decreasing.

Leavitt also announced the state will get a $14 million Medicare "credit" from the federal government. The state paid $119 million to the federal government to provide Medicare coverage this year. But Leavitt said the cost of prescription drugs has dropped, so the state received $14 million back.

Under the new Medicare Part D that began Jan. 1, Medicare beneficiaries — the elderly and the disabled — may enroll in private plans that will pay part of the cost of their prescription drugs with government subsidies.

In this state, about 96,000 people are "dual eligibles" — Medicare recipients whose prescriptions were previously paid in full by Medicaid, the federal-state program that helps pay medical costs for the needy and disabled, and for low-income families with children. Now, they are required to enroll in Part D, and face co-payments from $1 to $5 per prescription refill for the first time.

Thousands of these dual eligibles also say they're being overcharged, or that they're being denied coverage when there is confusion over eligibility.

Pharmacists have complained they couldn't get through the overloaded national computer system to verify customers' coverage.

"No rational person would expect a transition this significant or this large to go without some unexpected problems," Leavitt said.

He said the computer problems and other glitches have been resolved, and most Medicare beneficiaries are getting prescriptions filled on time.

"The system is working better every day, and about 200,000 people a day are signing up for the benefits," he said.

In a statement, Gregoire acknowledged the large number of "transition issues" with the new Part D program, but she wanted to talk specifically about the new co-pays for dual eligibles.

At the Washington State Community, Trade and Economic Development Office in downtown Seattle on Saturday morning, Gregoire said the state will use the $14 million to cover those co-pays for the "96,000 of our most vulnerable citizens" who need prescription drugs.

Many have serious mental and physical problems and require seven to 15 prescriptions per month, Gregoire said. To expect them to cover co-pays for all those prescriptions, for "some of these folks, that is just not possible when they are living on $570 a month" in Social Security income, she said.

The co-pay exemption covers this year only, and the governor acknowledged this will be a continuing problem unless more funds are available.

The state will start covering the co-pays within two weeks, according to the governor's staff. Those who have paid some co-pays already will not be reimbursed.

Tan Vinh: 206-515-5656 or tvinh@seattletimes.com

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