Supreme Court Won't Block Portions of Medicare Prescription Drug Program

The Supreme Court refused Monday to block part of the six-month-old Medicare prescription drug program, a defeat for states that claim they may get stuck with the bill.

Justices declined without comment to temporarily stop part of the law that added a prescription drug benefit to Medicare, the federal health insurance program for the elderly and disabled. States were contesting a requirement that they pay the federal government for some expenses.

The court also said that the fight belonged in a lower court, not the Supreme Court.

The 2003 law went into effect Jan. 1. About 43 million people are eligible for the benefit, although some missed a May deadline to sign up and may face a penalty.

Texas, Kentucky, Maine, Missouri and New Jersey called on justices to issue an injunction and to allow them to bring the appeal. Justices rejected both requests without explanation.

Ten other states also filed briefs with the court claiming the program threatens state independence: Alaska, Arizona, Connecticut, Kansas, Mississippi, New Hampshire, Ohio, Oklahoma, South Carolina and Vermont.

State lawsuits against the federal government can be filed directly with the Supreme Court, or begin in lower court. The Bush administration told justices that this case belonged in a lower court, and that states should actually receive more money, not less, under the law.

"The states cannot establish that the (law) ... will cause them any financial hardship at all," Solicitor General Paul Clement wrote. "By contrast, an injunction barring implementation of (the law) would deprive the Medicare Part D program of an important source of the funding necessary to furnish prescription drugs to individuals over 65 or who have disabilities."

The contested part of the law involves a provision which requires states to pay the federal government part of the money they are expected to save because they no longer must pay for drugs for people enrolled in both Medicare and Medicaid.

People who previously were covered by state Medicaid programs are part of the new program.

Texas Solicitor General Ted Cruz had told justices that states are expected to have to pay billions of dollars over the next two years. He said so far, however, states have not been told exactly how much they must pay or when they must pay up.

That makes it difficult for states planning for spending on schools or natural disasters, he said.

A group of law professors and health care experts told the court that although it is promoted as generous "the new drug benefit threatens to unravel both Medicare and Medicaid."

Beneficiaries enroll in a private plan that subsidizes the cost of their prescription drugs. While the costs and the benefits differ, depending upon the beneficiary, the Bush administration estimates that the average participant will save about $1,100 a year.

The case is Texas v. Leavitt, No. 135.