The Bush administration said Tuesday that states would be fully reimbursed for any costs they incurred in paying claims for prescription drugs that should have been covered by the new federal Medicare program.

Michael O. Leavitt, the secretary of health and human services, announced the plan in response to a political furor swirling around the new Medicare drug benefit. 

At least two dozen states have taken emergency action to help low-income people who could not get their medications under the program, which began Jan. 1. States are spending millions of dollars a day in such assistance.

Dr. Mark B. McClellan, administrator of the Centers for Medicare and Medicaid Services, said the Bush administration would use its influence to ensure that prescription drug plans - private insurers under contract to Medicare - reimbursed states for the cost of claims that the insurers should have paid. 

Many states have paid more for particular drugs than private plans would have paid. Dr. McClellan said the federal government would reimburse states for the difference and would also cover any administrative costs that states had incurred in operating stopgap programs.

Mr. Leavitt said, "In cases where states have continued to pay for drugs at rates higher than what the plans would reimburse, as a function of our transition, we're going to help them cover that."

The federal government said it would reimburse states for prescription drugs dispensed to low-income Medicare beneficiaries through Feb. 15. Federal officials assume that problems in the new program will be worked out by then.
Gov. Arnold Schwarzenegger of California, a Republican, welcomed the promise of full reimbursement. "This is great news," he said. "The federal government is living up to its responsibility."

But the steps were not enough to satisfy some Democrats, who said the federal government should reimburse all state costs, without requiring states to dun insurers.

Gov. John Lynch of New Hampshire, a Democrat, expressed concern about the Feb. 15 deadline. "New Hampshire citizens are still having problems getting their medications through Medicare," Mr. Lynch said. "The federal government should not set a deadline until it can prove that everyone who is eligible can actually get their prescriptions."

Senator Hillary Rodham Clinton, Democrat of New York, said the announcement showed that Bush administration officials "are feeling the heat, are finally recognizing the crisis they created in the design and implementation of the new drug benefit." 

In an interview, Ms. Clinton said the action was intended to head off legislation that would require the federal government to reimburse the states directly. "I am very skeptical that all the kinks in the new program will be worked out by Feb. 15," she added.

The chief sponsor of the legislation, Senator Frank R. Lautenberg, Democrat of New Jersey, said: "Today's announcement only makes the problem worse. 

First, states had to step in and spend millions to prevent the Medicare system from collapsing at the beginning of this year. Now the federal government wants the states to act as its bill collectors."

A co-author of the bill, Senator Olympia J. Snowe, Republican of Maine, said she was pleased that the administration would compensate states for the costs of their emergency assistance programs, which she said had "averted great harm to those with limited resources."

For weeks, federal officials said they did not have authority to reimburse states. On Tuesday, they said they had discovered that they could reimburse the states by conducting a demonstration project under Section 402 of the Social Security Amendments of 1967.

Bush administration officials said they did not know how much their commitment to the states would cost. Dr. McClellan said "the bulk of costs" would be paid by insurers, not the government. But, he said, federal officials would help the states collect through a "reconciliation process," the details of which were still being worked out.

While acknowledging some problems, Dr. McClellan said Tuesday, "The prescription drug program is working for the vast majority of seniors and people with disabilities."

But William P. Scheer, president of the Pharmacists Society of the State of New York, who owns a drugstore in the Bronx, said: "Federal officials must be taking happy juice if they believe that everything is running so well. Some of the prescription drug plans are running roughshod over us and our patients."