Medicare's new prescription-drug program is causing thousands of low-income seniors and disabled Americans to lose their drug benefits, prompting at least 14 states to pay for their prescriptions.

The problem affects thousands of the 6.2 million people whose drug coverage was automatically transferred from Medicaid to Medicare this month. At drugstores nationwide, pharmacists are telling beneficiaries that they're not enrolled, or their drugs aren't covered, or they must pay deductibles and larger co-payments than they can afford, interviews with federal, state and local officials show. (Related story: Benefit costly for some poor)

The trouble stems from worse than expected start-up problems with the new Medicare drug plan, which began Jan. 1. "It's a major public health crisis," says Jeanne Finberg of the National Senior Citizens Law Center. "People are trying to get their drugs, and they can't get them."

That has prompted states from Maine to Hawaii to intervene. They have promised to pay for temporary coverage while the federal government, insurers and pharmacists fix the problems. Most states have said they will seek reimbursement from Medicare or the private insurance plans administering the new drug benefit.

"Once we saw that that was happening, we knew that we had to step in and be the safety net for these folks," says Suzanne Esterman of New Jersey's Department of Human Services.

California, Illinois and Pennsylvania became the biggest states Thursday to say they will pay for drugs denied to those switching from Medicaid to Medicare coverage. "Hopefully the glitches with the federal program will be worked out soon, but until then we're going to take care of those who need their prescription drugs," said Illinois Gov. Rod Blagojevich.

The Bush administration has worked to fix the fledgling prescription-drug program. The government has urged insurers to beef up customer service desks, which have left pharmacists and beneficiaries on hold for hours. It also required that prescriptions be approved for 30 days while disputes are resolved. "The benefit needs to work for everyone," says Mark McClellan, who heads the Centers for Medicare and Medicaid Services. "We're working ... to make sure that no one leaves without the prescriptions that they need."

The agency last week boosted the number of people answering its toll-free pharmacy hotline from 150 to 4,000.

Advocates for the poor also are concerned that the government isn't reaching millions of additional Medicare recipients who don't receive Medicaid but may qualify for low-income subsidies. About 1.1 million have been found eligible and 2 million denied, but the Social Security Administration sent letters to 19 million notifying them of the subsidy.

"Most of the people haven't been reached," says Jim Firman, chairman of the Access to Benefits Coalition, which includes more than 100 non-profit groups seeking to attract low-income Americans into the program. "By any measure, we've got a long way to go."

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