BRINGING MEDICARE INTO THE 21ST CENTURY
While the medical community has ridden the technological wave of the future, pushing the envelope in research into new pharmaceuticals, treatments and life-saving measures, Medicare has been stuck floundering in the 20th century.
After years of talk, Congress is poised to enact the most sweeping change for America's seniors in nearly 40 years. Pharmaceuticals are one of the true miracles of modern medicine. Ailments that traditionally required an expensive in-patient hospital stay and invasive surgery can now be treated with medication. But most Medicare recipients wouldn't know it. An estimated 9.9 million Medicare beneficiaries do not have prescription drug coverage. While the government pays for costly heart surgery, it currently will not pay for the preventative drugs that may have precluded the need for an operation in the first place.
The bill before Congress would give America's seniors access to a prescription drug benefit for the first time. Beneficiaries would pay a $35 monthly premium and a $250 deductible, after which they pay 25 percent of drug costs between $250 and $2,250, and 100 percent between $2,250 and $3,600. Costs over that threshold would require an average co-pay of $2 for generic drugs and $5 for brand name drugs, or five percent of the total drug cost depending on the plan.
Until these reforms are in place, a prescription drug discount card offering savings of up to 25 percent will be available in 2004, providing some relief immediately.
This measure also offers additional and unprecedented assistance to those with low incomes or catastrophic drug costs. Medicare beneficiaries at the poverty level and below will pay no premiums or deductibles and will have nominal cost sharing responsibility, with co-pays of $1 for generic drugs and $3 for other pharmaceuticals. And those at 135 and 150 percent of the poverty level will have dramatically reduced premiums, deductibles and co-pays. These changes will mean more than 680,000 low-income Texans will pay no more than $5 per prescription.
In addition to the prescription drug benefit, there are a number of other elements that bring Medicare up to modern-day medical standards. In the end, the legislation is a good compromise and addresses the fundamental problems.
One significant element is choice. This plan gives seniors access to a broad array of healthcare options, similar to what most working Americans already enjoy. Seniors can stay in traditional Medicare or choose another benefit package. It also has provisions to encourage companies currently providing healthcare to their retirees to continue offering this important benefit. In addition, those in rural areas will have access to the same choices as those in more densely populated urban areas.
Another important component of the bill is an increase in reimbursement rates for physicians, many of whom have stopped taking on new patients who are part of the Medicare program. Hospitals that treat a large number of illegal immigrants will receive some reimbursement for their services - a provision important for Texas hospitals.
Another advantage that will apply to the general population, not just those within Medicare, is the creation of Health Savings Accounts, which will allow individuals and families to put money, tax-free into an investment type account dedicated to their medical costs. The money is not taxed when taken out for qualified medical expenses, giving Americans another tool to cover healthcare costs.
As with any compromise, some areas are not everything you support. I advocated larger teaching hospital reimbursement levels. In addition to training the physicians of tomorrow, these institutions treat underserved patients and provide comprehensive and unique services such as neonatal intensive care and burn units for the general population. Texas teaching hospitals will receive an additional $12.9 million over the next ten years, below the levels I wanted, but a welcome increase over the status quo.
Let me be clear: this bill is not perfect, but as AARP President James Parkel said, "Millions of Americans cannot wait for perfect. They need help now."
Finally, we are taking the first step to bring this vital program up-to-date. For the first time, we can provide a voluntary prescription drug benefit that offers additional assistance for those who need it most, and strengthen Medicare for future generations.
November 21, 2003