Medicare State Reimbursement Act of 2006 - Amends title XIX (Medicaid) of the Social Security Act with respect to required state reimbursements to the Secretary of Health and Human Services for federal assumption of Medicaid prescription drug costs for dually eligible individuals (Medicaid clawback).
Requires an offset from the Medicaid clawback for state prescription drug expenditures for covered part D (Voluntary Prescription Drug Benefit Program) drugs for Medicare beneficiaries enrolled in a part D plan but unable to access on a timely basis benefits to which they were entitled.
Requires the Secretary to provide for recovery of payment reductions owing to such offset from those part D or Medicare Advantage-Prescription Drug (MA-PD) plans that would otherwise be responsible for the expenditures made by the states.