[First Reprint]












Sponsored by:


District 15 (Mercer)

Assemblywoman NELLIE POU

District 35 (Bergen and Passaic)


Co-Sponsored by:

Assemblyman Manzo






    Memorializes Centers for Medicare & Medicaid Services to permit auto-enrollment into preferred prescription drug plan for Medicare Part D.



    As reported by the Assembly Senior Issues Committee on February 14, 2005, with amendments.


(Sponsorship Updated As Of: 2/15/2005)

An Assembly Resolution memorializing the Centers for Medicare & Medicaid Services to adopt rules or policies that would permit states to automatically enroll certain beneficiaries into a preferred prescription drug plan under Medicare Part D.


Whereas, The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 creates a prescription drug benefit under a new Part D of the Medicare program, which begins on January 1, 2006, and as of that date, "dual eligibles," those persons in the State who qualify for benefits under both the Medicaid and Medicare programs, will no longer receive their coverage for prescription drugs under the State Medicaid program but, instead, will rely upon the prescription drug benefit available under Medicare Part D; and

Whereas, Currently, dual eligibles in the State receive a comprehensive prescription drug benefit under the State Medicaid program, but under Medicare Part D, all of the prescription drug needs of these dual eligibles may not be met by some prescription drug plans, since the plans may use restricted formularies that exclude certain medications; and

Whereas, For the Transitional Assistance and Medicare Discount Card programs, which began in May 2004 and June 2004, respectively, the Department of Health and Senior Services realized significant savings by automatically enrolling its low-income beneficiaries of the "Pharmaceutical Assistance to the Aged and Disabled" (PAAD) program into one preferred provider discount card program, while also allowing these PAAD beneficiaries the ability to opt out of automatic enrollment; and

Whereas, According to testimony provided by the Department of Health and Senior Services to a joint hearing of the Assembly Federal Relations and Senior Issues Committees on November 23, 2004, the process of automatic enrollment into one preferred provider for the discount card program was a relatively seamless transition with no disruption or loss of services to PAAD beneficiaries and, as of November 5, 2004, almost 697,000 claims had been processed by the State's preferred provider, saving the PAAD program over $33 million through the use of the Medicare Discount Card program; and

Whereas, 1[Similarly, if the]The1 rules 1[or policies]1 adopted by the Centers for Medicare & Medicaid Services 1[were to permit the Department of Health and Senior Services to automatically enroll its ]discourage automatic enrollment of1 PAAD and "Senior Gold Prescription Discount Program" beneficiaries into a preferred prescription drug plan under Medicare Part D 1[, the] by disallowing state pharmaceutical assistance programs that auto-enroll from counting their state expenditures for providing supplemental coverage, known as "wrap-around coverage," toward beneficiaries' out-of-pocket spending limits, the point at which catastrophic coverage begins and the Medicare Part D program pays 95% of beneficiaries' covered drug expenses; and

Whereas, The1 State could see significant savings in administrative costs 1from automatic enrollment1 and these savings would enable the State to have additional funds available to seamlessly provide 1[additional coverage, known as "wrap-around coverage,"]wrap- around coverage1 to dual eligibles for medications that may not be included in the formularies of prescription drug plans under Medicare Part D or for over-the-counter medications that are currently covered by the State Medicaid program but not Medicare Part D; and

Whereas, It would also be beneficial for dual eligibles, 38% of whom have cognitive or mental impairments according to the Medicare Payment Advisory Commission, to be automatically enrolled into one preferred prescription drug plan, with the ability to opt out and enroll in another plan, because the use of such a system would facilitate the development and implementation of, and increase funds available for, wrap-around coverage by eliminating the need for the State to coordinate with numerous plans that offer different benefits and avoiding administrative costs associated with such coordination; and

Whereas, The option of an open formulary for dual eligibles under Medicare Part D or, alternatively, an open formulary for specific classes of medications such as psychotropics or anticonvulsants, would be worthy of consideration by the Centers for Medicare & Medicaid Services, since prescription drugs are a critical component of community care for certain dual eligibles for whom drug substitution may be inappropriate and since open formularies or class-specific open formularies would significantly reduce the State's expenses for wrap-around coverage for dual eligibles; now, therefore,


    Be It Resolved by the General Assembly of the State of New Jersey:


    1. This House respectfully memorializes the Administrator of the Centers for Medicare & Medicaid Services to 1[adopt]amend its1 rules or 1adopt1 policies that 1[permit]do not discourage1 state pharmaceutical assistance programs 1[to] from1 automatically 1[enroll]enrolling1 their beneficiaries into preferred prescription drug plans for prescription drug coverage under Medicare Part D, and to consider the option of an open formulary, or an open formulary for specific classes of medications, for dual eligibles.


    2. Duly authenticated copies of this resolution, signed by the Speaker of the General Assembly and attested by the Clerk of the General Assembly, shall be transmitted to the Administrator of the Centers for Medicare & Medicaid Services, the presiding officers of the Congress of the United States and each member of New Jersey's congressional delegation, the Commissioner of Health and Senior Services and the Assistant Commissioner for the Division of Senior Benefits and Utilization Management in the Department of Health and Senior Services.