Proposed Bill to Tax Drug Stores that Opt Out of Medicaid Program

Sen. Micheal Katz

In hopes of closing the financial gap, a new bill was introduced Thursday that would tax drug stores that opt out of the Medicaid program to help cover costs for prescriptions and medical aid for low-income patients.

On Thursday, June 11, Senator Michael Katz, D-Centerville, with the support of Rep. Helene Keeley, D-Wilmington West, proposed a bill that would increase the gross receipts tax by 2% for any pharmacy who opts out of the Medicaid program. The bill proposes that funds collected from the tax increase will go to pay for prescriptions and other medical aid for Medicaid clients.

Recently, Walgreens announced that all 66 Happy Harry’s stores in Delaware will no longer participate in the state’s prescription program for low-income citizens due to the reduction of state reimbursement funds to the corporation.

Sen. Katz came up with the 2% tax increase after Walgreens dropped the Medicaid program for a 2% reduction in state payments.

“Walgreens has about 50-plus percent market penetration in private pharmaceutical business in Delaware and they make a lot of money from private insurance clients,” Katz said. “If they’re going to skim the cream off the top they have the responsibility to help those in need – the adults and children who use Medicaid – and do their fair share in caring for that population.”

According to Katz’s office, approximately 157,000, or about one in five, Delawareans are enrolled in Medicaid.

“I have a lot of Medicaid recipients who live in my district,” Keeley said. “These folks need the assistance. These are folks who are struggling to make their co-pays and if we can do anything for them, we should.”