States resist payments for Medicare Rx drug benefit 

State governments will have to pay billions of dollars to the federal government next year to help finance the new Medicare prescription drug benefit. 

The Bush administration notified states this week of the 2003 Medicare law that requires states to pay the federal government for taking over Medicaid drug costs.  The Congressional Budget Office estimates that the required state contributions will total $6 billion for the current fiscal year and $124 billion from 2006 to 2015, however, many state officials argue the calculations are incorrect, charging states more than they actually owe. 

Originally the law was to relieve states of prescription drugs costs for low-income Medicare recipients, but many states have concluded they will lose money after being forced to give back most of the savings.

If the resistant states, including Texas, do not make the required payments, federal officials will deduct from the money they give the states for other programs.