WASHINGTON – U.S. Rep. Benjamin L. Cardin today condemned the House Republican Medicare bill saying that "it does not provide seniors with a meaningful, lasting benefit because it relies on the private insurance market to provide prescription drug coverage." He also stressed that this reliance on the private market "is an attempt to privatize the Medicare program in the future."

The legislation, which is expected to be voted on tonight, offers seniors the option of coverage through competing private drug-only insurance plans, beginning in 2006. "This plan is a prescription for failure," said the Congressman. "Insurance companies have never offered stability to our seniors, and this bill does nothing to restore our faith in that market. There is no requirement for any company to participate for more than one year. In the past five years, more than two million seniors were dropped by their Medicare+Choice plans. Maryland seniors remember that in 1997, they could select from eight Medicare HMOs, but by 2002, all had abandoned our state, leaving 100,000 seniors much worse off."

Rep. Cardin stressed that seniors need prescription drug coverage that is part of the basic Medicare benefit structure. "Only by providing a guaranteed benefit can seniors feel confident that their coverage will not erode over time as private insurance plans focus more on profit margins than on the well-being of seniors."

Under the Republican bill, it is estimated that private plans could offer seniors a plan with a $35 monthly premium, a $250 deductible and a 20% co-pay for drugs up $2,000. From $2,000 to $4,900, seniors fall into a "donut hole"–the gap in coverage where they would have to pay the full cost of their medications out-of-pocket."

"The bottom line is that the Republican bill is a lousy benefit. A senior with annual drug costs of $3,000, will spend $2,020 out-of-pocket under their plan. Beneficiaries will figure out quickly that this is inadequate," said the Congressman. "AARP, the National Committee to Preserve Social Security and Medicare, the AFL-CIO, and Common Cause have all expressed serious reservations about passage of the bill.

"The Republican plan also provides no solution to high drug prices. Americans face the steepest drug prices in the world," he said, "even though our taxpayers support billions of dollars of pharmaceutical research every year. It’s certainly unfair that the same drug costs much more in this country than in Canada. This bill not only fails to address this fact, it specifically prohibits the Secretary of Health and Human Services from negotiating with the pharmaceutical companies to lower prices for our seniors."

Rep. Cardin supports the Democratic alternative, which would guarantee a voluntary, prescription drug benefit for all enrollees within Medicare. The Democratic bill would provide for a $25 a month premium, $100 a year deductible, and Medicare would pay 80% of seniors’ drug costs, up to $2,000 out-of-pocket limit per beneficiary per year. After a senior spends $2,000 in drug costs, Medicare would cover the rest.

The Democratic bill grants the Secretary of Health and Human Services the authority to use the collective purchasing power of Medicare’s 40 million enrollees to negotiate lower drug prices, taking into account prices paid in other countries and by other payors in the United States.

The Congressman also pointed out that many seniors have retiree drug coverage through their former employers that is much more generous than what the House bill would offer. But the Congressional Budget Office has estimated that more than one-third of these retirees would lose their coverage if the Republican bill is enacted.

"American seniors want a reliable prescription drug benefit, and the only way to truly guarantee that is by providing it within the Medicare program. We don’t want our seniors to have to depend on the whims of private insurance companies for their medications," said the Congressman.