Making Medicines Affordable.

• Author: Cauchi, Richard
• Position: Statistical Data Included

A number of states have for years helped older Americans buy needed prescription drugs.

When Margaret Gallagher, 77, goes to the drug store each month, she makes a choice--to buy her cardiac medicine or her anti-arthritis drugs. Her doctor used to help by providing no-cost samples, but they are no longer available.

Margaret's story is repeated daily in communities across the nation. Prescription drugs make up only 11 percent of the total of all health care costs, but that statistic is no comfort to many patients. There are several real-life obstacles. First, Medicare and some private health insurance plans do not cover prescription drugs. Second, health plans that do cover drugs often have restrictive formularies or lists that exclude coverage for a particular drug. Third, spending for prescriptions was increasing an average of 16 percent in 1999, significantly higher than other major medical expenses.

It is no surprise that President Clinton and some members of Congress are calling for federal drug benefits. Yet senior pharmacy assistance programs have been in place in several states for as long as 25 years--quietly but effectively filling a critical gap for moderate-income seniors and others. Using creative combinations of state funds and public-private partnerships, these programs now are pointing the way for other states, as well as for federal policymakers.

As of mid-1999, 16 states had created pharmacy assistance programs with several common features. Eligibility is based on annual income limits (typically between $14,000 and $19,000 for a single person); the minimum age often is 65 (eight states include special coverage for adults under 65 with disabilities). The programs vary significantly in overall size. In New Jersey, some 206,000 people received help from its program, which marks its 25th year in 1999. The Michigan Emergency Pharmaceutical Program, founded in 1988, serves 31,000 residents.

Three states use earmarked funds: Massachusetts uses a portion of a 25-cent a pack cigarette tax; New Jersey earmarks casino revenues; Pennsylvania uses lottery proceeds. Several others depend on special trust funds. To avoid runaway state costs, most programs have some form of limitations or cost sharing:

* Connecticut has a $12 copayment per prescription.

* Illinois requires the first $15 per month be paid by the patient.

* Maryland covers only chronic maintenance and anti-infection drugs.

* Massachusetts has a $15 annual enrollment fee and...