PRESIDENT CLINTON AND THE DEMOCRATIC LEADERSHIP URGE THE CONGRESS TOACT NOW ON A MEDICARE PRESCRIPTION DRUG BENEFIT AND OTHER NATIONAL
Today, the President will meet with the Democratic leadership of the
House and Senate to address national priorities that affect the health,
safety, and economic security of the nation. In addition to addressing
strategies for the passage of a strong, enforceable Patients' Bill of
Rights, common sense gun safety legislation, and a simple $1 increase in
the minimum wage, they will focus on the need to pass a voluntary,
affordable Medicare prescription drug benefit available to all
beneficiaries. The President will underscore his strong belief that a
united Democratic party can help produce a strong prescription drug
benefit that receives broad based, bipartisan support, and he will
emphasize that the Congress should act on all of these national
priorities this year. Finally, the President will say that he welcomes
the Republicans' stated goal of developing a prescription drug benefit
for all Medicare beneficiaries, but he will highlight why the approach
they have outlined will not achieve this goal.
MILLIONS OF MEDICARE BENEFICIARIES HAVE NO OR UNDEPENDABLE PRESCRIPTION
DRUG COVERAGE. Millions of seniors and Americans with disabilities have
no prescription drug coverage and millions more are at risk of losing
coverage, or have inadequate, expensive coverage.
Most older Americans without prescription drug coverage are
middle-class. Over half of the millions of Medicare beneficiaries who
lack drug coverage have incomes greater than 150 percent of poverty
($12,525 for a single, nearly $17,000 for a couple). Seniors without
drug coverage fill 30 percent fewer prescriptions than those with
coverage, but pay 83 percent more out-of-pocket for drugs. In addition,
not even counting manufacturers' rebates, prescription drug prices for
those without coverage are typically 15 percent higher than prices paid
on behalf of people with coverage. This price gap almost doubled
between 1996 and 1999.
Current prescription drug coverage is unstable and declining. More
than three in five beneficiaries do not have dependable drug coverage.
The number of firms offering retiree health insurance coverage dropped
by 30 percent between 1993 and 1999, and Medigap premiums have been
rising at double the rate of inflation. While Medicare managed care
plans usually offer some drug coverage, it is typically limited. The
number of plans with a drug benefit below $500 has increased by 50
percent over the past two years. In addition, 11 million beneficiaries,
who disproportionately reside in rural areas, have no access to managed
A UNIFIED DEMOCRATIC FRONT PROVIDES THE FOUNDATION FOR BIPARTISAN
CONSENSUS. President Clinton today will point out that a strong,
unified Democratic position enhances the likelihood of passing a
Medicare drug benefit, just as it helped to assure the eventual House
passage of a strong, enforceable and bipartisan Patients Bill of Rights.
He will state that the recent announcement of Democratic consensus on
the details of a drug benefit should spur the Congress to move forward
on this vital issue.
UNIFIED DEMOCRATIC SUPPORT FOR A NEW, PRESCRIPTION DRUG BENEFIT OPTION
THAT IS AFFORDABLE AND AVAILABLE TO ALL BENEFICIARIES. The Democratic
Caucus supports the passage of a new prescription drug benefit that is:
Voluntary and Accessible To All Beneficiaries. A new benefit should
ensure that all beneficiaries can access prescription drug coverage,
whether they are in traditional Medicare, managed care, or a retiree
health plan. Employers will receive financial incentives to provide
retiree coverage and maintain existing coverage.
Designed To Give Beneficiaries Meaningful Protection. The proposal
would provide a benefit that covers half the cost of prescription drugs
up to a $5,000 limit when fully implemented and would provide additional
protection against catastrophic prescription drug costs. In addition,
it would use market-based purchasing mechanisms to achieve discounts for
the price of medications.
Affordable To All Beneficiaries And The Program. Under the plans,
Medicare will contribute at least 50 percent of the prescription drug
premium to make it affordable for all beneficiaries. The plans will
also include special protection for low-income beneficiaries; those with
incomes below 135 percent of the poverty level will receive full
coverage of cost sharing and premiums, and those with incomes between
135 and 150 percent of poverty will receive premium assistance on a
Administered Using Private Sector Entities And Competitive Purchasing
Techniques. Private sector entities will negotiate prices with drug
manufacturers and administer the benefit, the same as most private
insurers. Drugs will be purchased at privately negotiated rates, giving
beneficiaries the bargaining power they lack today. As a result,
beneficiaries will not only receive prescription drug coverage for the
first time, they will pay lower prices for their drugs.
REPUBLICAN POLICY DOES NOT MEET THEIR STATED GOALS. Although the House
Republican leadership recently recognized the need for an affordable,
optional prescription drug benefit available to all Medicare
beneficiaries, the President will note that the policy advocated by the
House Republicans does not achieve their stated goals. The current House
Does not assure availability of prescription drug coverage. Because
the Republican plan relies on private insurers to offer a drug-only
benefit voluntarily, this policy cannot be guaranteed to be available to
all seniors in need of a drug benefit. In testimony before the
Congress, the insurance industry itself has expressed skepticism about
the effectiveness of the Republican approach.
Not affordable for most seniors, even if it is available.
Furthermore, because it provides direct premium assistance only to
beneficiaries with annual incomes of under $12,600, the Republican
benefit will almost certainly fail to be an affordable option even if it
is available. If enacted, the Republican proposal would mark the first
time in the program's history that Medicare would not provide universal
premium assistance for benefits, and it would undermine the social
insurance concept of the program.