Massachusetts can no longer require Medicare HMOs to provide unlimited prescription drug benefits. District Court Judge Richard Stearns decided that the federal law creating the Medicare+Choice program supersedes a state law barring prescription-benefit limits.
The ruling pleased HMOs, which had been fighting for the right to reduce drug benefits, a move they said was needed to keep benefits affordable. Legal action was touched off last summer after Harvard Pilgrim Health Care announced it would replace its unlimited pharmacy benefit, which costs senior citizens $71 a month, with a no-premium benefit plan with an $800-a-year limit. Other plans soon followed suit.
Following the federal ruling, advocates for the elderly lobbied HMOs to delay pharmacy caps for a year to give them time to work out a solution. Three plans agreed to delay benefit limits if Harvard Pilgrim did, too, but, citing a $22 million loss during the first three quarters of 1998, Harvard Pilgrim said Nov. 16 that it would not.
Massachusetts was the only state with a Medicare prescription drug mandate, although other states might have followed its lead had Massachusetts prevailed in court.