At Committee hearings in the House the week of June 12, 2000, House Republicans touted their latest plans for a Medicare prescription drug proposal. Although legislative language has yet to materialize, the House leadership is proposing quick action on the issue, indicating mark-up on the bill may be held as early as June 19, 2000. Advocates for Medicare beneficiaries strongly oppose the proposal because it fails to provide meaningful prescription drug coverage for all Medicare beneficiaries.
The latest Republican prescription drug proposal does not provide a universal benefit and will not expand access to prescription drugs for all Medicare beneficiaries. Under the proposal, the drug benefit will not be part of the defined Medicare benefit package. Rather, beneficiaries will be called upon to purchase private, stand alone drug insurance policies. There is no guarantee that insurance companies would offer such stand-alone products, or that drug plans, if offered, would be available to all Medicare beneficiaries regardless of income or where they live.
Private insurers have not been able to offer a meaningful and affordable drug benefit to beneficiaries. Current experience shows that ever increasing premiums for Medigap have left supplemental policies beyond the reach of many Medicare beneficiaries. Similarly, many beneficiaries who disenroll from Medicare+Choice plans identify premium cost as an important reason for leaving the plan. What's more, the private health insurance industry opposes the creation of "drug-only" policies and argues that they will not ultimately work to expand access to prescription drugs for beneficiaries.
The drug benefit will not be affordable for beneficiaries. As maintained by the health insurance industry, stand-alone policies would be too expensive for the average Medicare beneficiary. Even if premiums for the drug insurance start off reasonably, the proposal includes no mechanism to contain increases in premium costs. In addition to premiums, beneficiaries would have to pay deductibles and co-payments, the amounts of which are still unknown.
The subsidies for low-income beneficiaries are substantially reduced from earlier prescription drug proposals. The proposal contains the identical sliding scale for government subsidies of premiums and cost-sharing for beneficiaries with incomes up to 150% of poverty. Although beneficiary groups have argued that these subsidies are inadequate, the current proposal reduces, rather than expands assistance to low-income beneficiaries. Under the newest Republican proposal, subsidies will only be offered through the lowest cost plan. As a result, low income beneficiaries will be forced to use plans that offer the least attractive and least comprehensive packages. Worse, even the lowest-income beneficiaries would have to pay a $5 co-pay for each prescription. For the many beneficiaries who require multiple prescriptions, the imposition of a co-payment makes the benefit meaningless.
The proposal makes no effort to curb the rising cost of prescription drugs in this country. Medicare beneficiaries bear the brunt of the high cost of prescription drugs. They tend to use more prescription drugs than other Americans, and they tend to pay higher prices for those drugs. The Republican proposal does not address this problem. Instead, its drafters' proposed to work to increase the price for drugs in other countries where the drugs are sold at a lower price than they are in this country. This portion of the proposal has been withdrawn, but no proposal to decrease the cost of prescription drugs for older and disabled persons in this country has been offered in its place.
In sum, the latest prescription drug proposal does nothing to address the needs of older people and people with disabilities for meaningful and affordable prescription drug coverage. Members of Congress should not be permitted to risk the health and well-being of Medicare beneficiaries by passing a meaningless bill.
For further information contact Vicki Gottlich at 202-293-5760.
© Center for Medicare Advocacy, Inc. 01/08/2010