CBS5.com, January 20, 2006

A health care expert said today that he sympathizes with Gov. Arnold Schwarzenegger's frustration over the federal government's botched takeover of prescription drug coverage for the elderly poor and disabled.

John Graham, the director of health care studies at the Pacific Research Institute, a San Francisco-based free-market think tank, said the federal government's new Medicare Part D drug program "is badly designed."

Graham said, "The governor is right that the federal government screwed up."

But Graham said that except for poor people who have had problems getting their prescriptions filled since the new program took effect Jan. 1, the issue largely is a bureaucratic dispute over whether the federal government or the state government should pay for the cost of prescription drug coverage.

"To taxpayers, it's irrelevant if Sacramento or Washington pays for the cost," Graham said. "It's a matter of whether it comes from your left pocket or your right pocket."

He said, "It's not Schwarzenegger or (President) Bush who pays for it, it's you and me."

Graham said he believes the Medicare Part D program "is unnecessary because the majority of seniors don't need it."

Graham said seniors in the United States "are the wealthiest generation in the history of mankind" and he believes most of them should pay for their prescription drug costs.

Schwarzenegger came to a pharmacy at a Safeway store in Alameda today to sign emergency legislation to ensure that Californians get their medications despite problems with the transition to the new federal program.

It establishes an initial 15-day emergency program and provides the governor with the authority to enact a 15-day extension in the event it is needed.

It also allocates $150 million dollars from the state's general fund to fund this emergency program for up to 30 days.

Schwarzenegger said he met with U.S. Health and Human Services Secretary Michael Leavitt Thursday to discuss the problems with the program and ask for the federal government to fully reimburse states, including California, for their costs.

The new drug program is voluntary for most Medicare beneficiaries, but it's mandatory for the elderly poor and disabled who are eligible for both Medicare and Medicaid, a program for the states that's called Medi-Cal in California.

To be eligible for Medicare, people have to be over 65 or disabled. To be eligible for Medicaid or Medi-Cal, people have to be poor.

According to Schwarzenegger, in California about one million people are "dually eligible" for both programs and about 20 percent of those people, or 200,000 people, have had difficult getting their medications.

Graham said he's not sure he agrees with Schwarzenegger that as many as one million people in California are dually eligible.

He said, "Unfortunately the needy fell through the cracks," but he said he thinks it would have been better if they had stayed with the state's program rather than the federal program because he thinks it's more appropriate for the states to pay for social services.

Graham said, "For the last two years the states and Washington have been arguing about how to deal with those who are dually eligible" and state governments have been trying to get Washington to pick up more of the tab.

He said about 30 states have passed legislation similar to that signed by Schwarzenegger today.

Graham said it was "a coordinated effort" because "states are always looking for more federal money."

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