PRESIDENT CLINTON CITES FLORIDA AS CASE EXAMPLE FOR NEED FOR MEDICARE
PRESCRIPTION DRUG BENEFIT
Releases New Report on the Need For Drug Benefit for Medicare
Beneficiaries With Disabilities
July 31, 2000
Today, in an event at the David Barksdale Senior Center in Tampa,
Florida, President Clinton will critique the shortcomings of the House
Republican prescription drug proposal and release a new Domestic Policy
Council / National Economic Council report highlighting the necessity of
prescription drug coverage for Medicare beneficiaries with disabilities.
The President will cite Florida as a case example of why a private
insurance model, such as the one proposed by the House Republicans, will
not work. He will point out that most Medicare beneficiaries in Florida
who need affordable prescription drug coverage must turn to the
expensive and limited-value private Medigap options or the unreliable
Medicare managed care market. The new White House report documents how
Medicare beneficiaries with disabilities are in poorer health and
require more prescriptions. The President will highlight the finding
that Medicare beneficiaries with disabilities who lack prescription drug
coverage pay fully 50 percent more out of pocket for 50 percent fewer
prescription drugs than those with coverage. This report strongly
validates the need for a voluntary Medicare prescription drug benefit
that rejects the private insurance model and instead offers an
affordable and meaningful Medicare benefit for all eligible people with
disabilities as well as all seniors.
PRESIDENT CITES FLORIDA AS CASE EXAMPLE OF NEED FOR MEDICARE
PRESCRIPTION DRUG BENEFIT. The President will point to the barriers 2.7
million Floridian Medicare beneficiaries face in accessing affordable
prescription drugs. He will cite the private Medigap insurance market
in Florida and throughout the nation, which provides for an expensive
but extremely limited benefit with no protections against catastrophic
expenses. The President will also highlight the serious shortcomings of
Medicare managed care plans, which all too frequently move in and out of
participation in the program and recently announced decisions that would
effectively drop 87,000 Floridians. He will underscore that while the
Medicare managed care program needs to be strengthened through the
provision of direct subsidies for prescription drug coverage, neither it
- nor a Medigap drug-only plan -- can be relied on as workable options
to provide a much-needed prescription drug benefit for seniors and
people with disabilities.
PRESIDENT CLINTON RELEASES A NEW STUDY ON THE IMPORTANCE OF MEDICARE TO
PEOPLE WITH DISABILITIES. About one in eight Medicare beneficiaries -
over 5 million (284,000 in Florida) -- are people with disabilities
under age 65. Over the next 10 years and the number of beneficiaries
with disabilities is projected to increase by 38 percent (from 5.5 to
7.6 million). Key findings of the report include:
Medicare Beneficiaries with Disabilities Have Poor Health and
Significant Health Care Needs. Most disabled beneficiaries -- 60 percent
of disabled beneficiaries -- report fair to poor health, compared to 22
percent of aged beneficiaries. Nearly 30 percent have functional
limitations due to health problems, compared to 18 percent of elderly
People with Disabilities Face Unique Coverage Challenges. Medicare
beneficiaries with disabilities are much less likely to have, be able to
access, or be able to afford private insurance coverage. The report
People with disabilities are 35 percent less likely to have
employer-based coverage. While some elderly get coverage through
retiree health plans, the non-elderly disabled have typically lost
access to employer-based insurance before qualifying for Medicare (22
percent for disabled versus 34 percent for aged).
Restricted access to individual Medigap insurance with drugs.
Less than one in 20 Medicare beneficiaries with disabilities have drug
coverage through private Medigap insurance (versus 12 percent of elderly
beneficiaries). A recent study found that only 10 states guarantee
people with disabilities access to a Medigap plan with prescription
Unaffordable premiums for private Medigap plans. Only 7 of the 10
states that guarantee access to Medigap for people with disabilities
have full or partial community rating that improves the affordability of
this coverage. Without protections, premiums range from 10 to 72
percent higher for beneficiaries with disabilities than for those who
Unlikely to get prescription drug insurance through Medicare
managed care. While about 12 percent of Medicare beneficiaries are
disabled, only 5 percent of Medicare managed care enrollees are
beneficiaries with disabilities. In contrast, in 1996, 16 percent of
elderly beneficiaries got drug coverage through managed care.
Beneficiaries With Disabilities Need a Voluntary Medicare Prescription
Drug Benefit. The report concludes that to ensure access for people
with disabilities, a prescription drug benefit must:
Ensure a Medicare option rather than rely on private insurers that
have failed to extend prescription drug coverage to people with
disabilities. Only a small number of beneficiaries with disabilities
have access to drug coverage through private insurers, and when they do,
it is often unaffordable. As such, any proposal must provide a Medicare
prescription drug option.
Have an affordable premium and a meaningful benefit. Any proposal
must have sufficient financing to ensure that premiums are affordable to
all Medicare beneficiaries. And to ensure that its benefit is
meaningful, it must protect against catastrophic prescription drug
expenses. Medicare beneficiaries with disabilities are more likely to
have high drug costs given their greater use.
Have access to the prescriptions that they need and pharmacies
that they trust. Because Medicare beneficiaries with disabilities often
have multiple, complex health problems, it is also important that
proposals allow doctors to prescribe any drug that is medically
necessary. Also, people with disabilities often face physical
challenges in getting to pharmacies. Proposals should ensure that
qualified community pharmacies can participate.
Be adequately financed and part of a plan to improve Medicare.
Strengthening Medicare is the best way to assure that it will be
available when future retirees and people with disabilities need it.
Extending program solvency, improving efficiency, and restoring provider
payments should be included in any Medicare reform plan. Additionally,
enough budget surplus must be set aside to finance a meaningful
prescription drug benefit and take its trust fund off budget. THE HOUSE
REPUBLICAN PRIVATE INSURANCE PLAN IS FLAWED. The plan:
Does not provide 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. The
private insurance industry itself confirms that a private insurance
model such as the House Republican proposal will not work. In fact, it
has stated that "to pass legislation to provide access to such coverage
would constitute an empty promise to Medicare beneficiaries." [Blue
Cross / Blue Shield Association Letter to Senator Roth, 4/24/00]
Is seriously underfunded and provides for an inadequate benefit.
The House Republican plan dedicates less than half of the resources the
President and the Democratic leadership allocates to a Medicare
prescription drug benefit ($40 billion versus over $80 billion). As a
result, the premiums are approximately 30 percent higher ($25 versus
$37), and its benefits are significantly less meaningful ($0 deductible
versus $250 deductible; catastrophic stop-loss protection beginning at
$4,000 versus $6,000).
Would leave millions of Medicare beneficiaries without
prescription drug coverage. The Congress' own budget office has
projected that the House Republican plan would leave out over half of
the Medicare beneficiaries who currently have no prescription drug
coverage. This finding validates that the House plan is underfunded and
does not provide sufficient benefits to be able to make the prescription
drug option attractive or affordable enough to some of the nation's most
vulnerable seniors and people with disabilities.
Limits choice of drugs and pharmacies. The so-called "choice"
model offered by the Republicans breaks up the pooled purchasing power
of seniors and people with disabilities, forcing insurers to reduce
prices through restrictive formularies and limited choice of pharmacies.
Not all prescription drugs that a doctor determines are medically
necessary would be available -- only after an inappropriate drug has
been taken can a beneficiary can appeal for a needed drug.
Additionally, insurers could restrict access to local pharmacies.