State budget cuts threaten Medicaid Rx coverage. (Some Drugstores could Drop Medicaid).

Drugstores nationwide are threatening to stop filling prescriptions for Medicaid patients as states scale back their payments to pharmacies.

Under budgetary pressure from the recession, states are looking for ways to save money, and pharmacies are easy targets, said Crystal Wright, vice president of media relations for the National Association of Chain Drug Stores. The organization represents 200 chain pharmacy companies nationwide, with stores such as Rite Aid, Walgreens, and CVS/pharmacy, and about 100,000 individual pharmacists.

Medicaid covers approximately 36 million low-income individuals nationwide. The program financed more than 1 million births in 1998. During that same year, the program covered 20.6 million children, according to the Kaiser Family Foundation.

Access to a local pharmacy is crucial for low-income individuals on Medicaid who may not own cars and can't travel long distances to get their prescriptions filled, Ms. Wright noted.

Medicaid is the second-largest expenditure in all state budgets, the National Governors Association said in a position statement.

In a March 19 letter to federal legislators requesting financial relief for states and an overhaul of Medicaid, the National Governors Association stated: "Medicaid costs are rising at a double-digit rate, while revenues are coming in at the lowest rate ever recorded.

"Unlike the federal government, states do not have the option of deficit spending in a time of recession or war, but rather must cut existing programs or raise new revenue to balance their budgets," the letter explained.