updated 1/24/2006 6:43:04 PM ET 2006-01-24T23:43:04

Federal officials said Tuesday they would reimburse states that bought medicine for senior citizens and disabled people who could not get help through the new Medicare drug benefit.

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The benefit began on Jan. 1. Under the program, Medicare beneficiaries enroll in private plans that get a government subsidy to provide prescription drug coverage.

But the program got off to such a difficult start that more than 20 states opted to continue emergency coverage for some of their low-income residents. Those residents often didn't show up in pharmacists' computers as being enrolled in a plan. On other occasions, the residents were charged fees for their medicine that far exceeded what they were supposed to pay.

Previously, officials said reimbursement to the states would come from the private plans themselves. But, the states may have incurred some expense above and beyond what the plans are required to pay. In those cases, the federal government would step in.

"These states need to be reimbursed for costs that they have put out on behalf of the plans," said Health and Human Services Secretary Mike Leavitt.

HHS was unable to provide a dollar figure for the state reimbursements.

A bipartisan group of lawmakers has introduced legislation that would require that states be wholly reimbursed for picking up the tab for Medicare beneficiaries. HHS officials said an administrative waiver was all that is needed.

"This can start right away. We don't need legislation," said Mark McClellan, administrator for the Centers for Medicare and Medicaid Services.

McClellan also said that the waiver would be in place until Feb. 15. By then, agency officials hope most problems with the system will have been worked out.

Sen. Frank Lautenberg, D-N.J., said the waiver "is simply more red tape from the Bush administration."

The Feb. 15 date was arbitrary, Lautenberg said, and "nothing more than a cruel Valentine for senior citizens who need their medicine."

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