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REPRESENTATIVES OF MEDICARE BENEFICIARIES AND THE DEMOCRATICLEADERSHIP JOIN PRESIDENT CLINTON TO CHALLENGE REPUBLICANS TO PROVIDE
ALL SENIORS WITH THE CHOICE OF A REAL MEDICARE BENEFIT
Today, Senate Democratic Leader Daschle, House Democratic Leader
Gephardt, and representatives of older Americans, people with
disabilities, and pharmacists will stand with the President as he
challenges the Republicans to ensure that all seniors can access a real
Medicare prescription drug benefit. The President will welcome any
effort to assure an affordable prescription drug benefit option for all
Medicare beneficiaries, but will underscore that a private insurance
drug benefit cannot achieve this outcome. He will say he is open to
private insurance options, but only if all seniors have the ability to
choose an affordable, defined, fee-for-service drug benefit under
Medicare. The President will point out that a private insurance model
that does not provide such a Medicare option for all beneficiaries would
be nothing more than an empty promise.
PRESIDENT CLINTON AND THE DEMOCRATIC LEADERSHIP AGREE WITH SENIORS'
CONCERNS ABOUT THE REPUBLICAN PLAN. Today, representatives of millions
of older Americans and people with disabilities voiced their concern
that, according to the sketchy details available, the Republican plan
would provide a prescription drug benefit through a flawed Medigap-like
model that could not assure Medicare beneficiaries it is available or
affordable. The Republican plan appears to:
Fail to assure the availability or stability of drug coverage
options. The Republican plan builds on the already-flawed private
Medigap insurance market rather than adding a prescription drug benefit
to Medicare. The insurance industry itself claims that an insurance
model will not work for prescription drug coverage - and that insurers
will not voluntarily participate. Even if some insurers do offer
coverage, they would likely come in and out of the market, move to
profitable market areas, and significantly modify their benefit design
from year to year based on prior year's experience. This would result
in the same pull-outs and uncertainty that we see in managed care today.
Provide a private insurance - not a Medicare - benefit. Outpatient
prescription drugs would not be part of the Medicare benefits package
like doctor or hospital care. Beneficiaries would pay expensive
premiums to private Medigap plans rather than to Medicare for an
affordable option.
Fails to ensure the affordability of coverage options. Under the
Republican plan, it appears that Medicare would not provide a single
dollar of direct premium assistance for middle-class Medicare
beneficiaries (any senior with income above $12,600). Instead, it
relies on a flawed "trickle-down theory" that would end up subsidizing
insurers, not seniors. The Republican proposal appears to subsidize
insurers for part of the cost for the most expensive enrollees, hoping
that this will result in lower premiums for all enrollees. There are no
assurances that seniors will see lower premiums as a result. Even if an
insurer passed through every dollar of its subsidy, premiums would still
be too expensive for many seniors.
Does not guarantee a meaningful benefit. The Republican plan
appears to specify only the stop-loss amount. Private insurers could
define deductibles, copays and benefit limits, promoting competition on
confusion rather than price and quality. In addition, relying on an
insurance model where insurers get paid one premium for all enrollees -
no matter how sick - and can define the drug benefit puts sicker seniors
and people with disabilities at risk of adverse selection. An insurer
could discourage seniors with high drug costs from enrolling by offering
no deductible, low copays and a low benefit cap that leaves a large gap
before the stop-loss kicks in.
Limit choice of drugs and pharmacies. The so-called "choice" model
offered by the Republicans appears to break up the pooled purchasing
power of seniors, forcing insurers to reduce prices through restrictive
formularies and limited choice of pharmacies. While there may be a
limited appeals process available to them, beneficiaries are not
guaranteed access to off-formulary drugs that their doctor certifies are
medically necessary.
PRESIDENT CLINTON WILL CALL ON CONGRESS TO INCLUDE A REAL MEDICARE DRUG
BENEFIT. The President will state that he welcomes any effort to
provide affordable coverage to all older Americans, but will underscore
that a private insurance drug benefit cannot work to achieve this
outcome. He will indicate that he is open to private insurance options,
but only if all seniors have the ability to choose an affordable,
defined, fee-for-service drug benefit under Medicare. The President will
point out that a private insurance model that does not provide such a
Medicare option would be nothing more than an empty promise.
PRESIDENT CLINTON WILL AGREE WITH AGING, DISABILITY, AND PHARMACIST
REPRESENTATIVES REJECTION OF THE REPUBLICAN LEGISLATIVE PROCESS. Amid
reports that the final Republican proposal will be released on Friday,
marked up on Monday, and sent to the floor for a vote shortly
afterwards, advocates for seniors and people with disabilities will
reject the partisan legislative process chosen by the House. This
process fails to provide older Americans and people with disabilities
with the time necessary to adequately evaluate the implications of
policies of such great importance to their health. In response to their
concerns, the President will call on the Congress to work together in a
bipartisan fashion a plan that provides a meaningful and affordable
benefit to all beneficiaries.
THE PRESIDENT'S PLAN EXTENDS PRESCRIPTION DRUGS TO ALL MEDICARE
BENEFICIARIES. The President will point out that his plan provides an
affordable, accessible, prescription drug benefit option to all
beneficiaries. It is:
Voluntary. Medicare beneficiaries who now have dependable,
affordable coverage would have the option of keeping that coverage.
Accessible to all beneficiaries. Beneficiaries who join the
program would pay the same premium and get the same benefit, no matter
where they live, through a private, competitively selected benefit
manager or, where available, through managed care plans.
Designed to give beneficiaries meaningful protection and bargaining
power. A reserve fund in the President's budget helps Medicare
beneficiaries with catastrophic prescription drug costs. The plan also
gives beneficiaries bargaining power they now lack by utilizing private
prescription drug managers to negotiate discounts that can be extracted
from volume purchasing.
Affordable to all beneficiaries and the program. According to CBO,
premiums would be $26 per month in 2003. Low-income beneficiaries -
below 150 percent of poverty ($17,000 for a couple) - would receive
extra help with the cost of premiums; those below 135 percent would have
no cost sharing.
Consistent with broader reform. The new, voluntary prescription
drug benefit is part of a larger plan to strengthen and modernize
Medicare. This plan would make Medicare more competitive and efficient,
reduce fraud and out-year cost increases, promote fair payments, and
improve preventive benefits in Medicare.