Ryan Votes To Provide Prescription Drug Coverage for Seniors, Strengthen Medicare

WASHINGTON, D.C. – First District Congressman Paul Ryan, a member of the House Ways and Means Committee, today voted in favor of the "Medicare Modernization and Prescription Drug Act of 2002." Ryan, who has made fixing Medicare’s weaknesses a top priority, is an original cosponsor of the legislation, which passed the Committee early this morning by a vote of 22-16.

"This bill is a two-part win for Wisconsin," Ryan said. "It makes affordable drug coverage available through Medicare to our seniors. It also gives necessary relief to our health care system by bringing funds back to our hospitals and other providers and by making regional Medicare payments fairer for Wisconsin."

"Medicare was created in the 1960s and unfortunately has not kept up with medical advances," Ryan said. "The system is strained, and many Wisconsin seniors are struggling to make it work for them. Seniors have every reason to expect lower costs for prescription drugs, more comprehensive coverage under Medicare, and the chance to choose the drug plan that works best for them. This bill delivers."

The cornerstone of the bill is the addition of a voluntary prescription drug benefit available to all Medicare beneficiaries. Highlights of the plan that the Ways and Means Committee passed include the following:

• It provides a voluntary, affordable prescription drug benefit as an entitlement to all Medicare beneficiaries. Because it is voluntary, seniors who want to keep their current coverage may do so.
• It gives seniors group buying power, lowering the cost of their prescription drugs substantially.
• Beneficiaries would pay a premium of around $35 per month or about $1 a day.

• After an initial $250 deductible, Medicare would pay 80 percent of the drug costs up to $1,000, 50 percent of the costs between $1,001 and $2,000, and all costs (100 percent) above $3,800 out-of-pocket per year.
• Low-income seniors would get even more help with their prescription drug costs through subsidized premiums and more comprehensive coverage.
• It guarantees beneficiaries a choice of at least two drug plans.

"Besides helping seniors pay for prescription drugs, this plan improves Medicare and strengthens our health care system in other crucial ways," Ryan said. "For example, it increases Medicare payments to hospitals, doctors, and other providers; narrows the reimbursement discrepancy that has put many of our Wisconsin hospitals at a disadvantage; and works to stabilize Medicare+Choice. While there’s more we can and must do to improve Medicare over the long haul, this is a good start."

"The numbers I’ve seen so far indicate that Wisconsin hospitals stand to gain more than $140 million over ten years and $45 million over the next two years if this legislation becomes law," Ryan said. One source of high health insurance premium increases is lower Medicare reimbursements. This bill helps alleviate that pressure, which will help restrain high health insurance costs.

In addition to providing a prescription drug benefit, the Medicare legislation that passed the Ways and Means Committee:

• Gives more help to Medicare recipients by covering an initial physical and lowering certain Part B outpatient copayments by $10 billion.
• Strengthens rural health care, delivering relief for underpaid rural hospitals and home health.
• Improves reimbursement policy, narrowing the regional disparity in reimbursements to hospitals.
• Puts over $140 million back into Wisconsin’s hospitals over ten years, according to preliminary estimates.
• Reforms irrational physician payments.
• Works to stabilize Medicare + Choice and establishes demonstration projects to examine moving toward a system more like the competitive health care program that Members of Congress and federal employees have. This is necessary to slow escalating Medicare costs and improve Medicare solvency.
• Provides regulatory relief for doctors and hospitals.

Over 55 different patient and health care provider groups, including the American Medical Association, Visiting Nurses Association and the American Hospital Association, support this legislation.

On July 1 and 2, Rep. Ryan will hold town hall meetings to talk about this legislation, update First District residents on its progress in Congress, and discuss the overall issue of improving Medicare and providing needed prescription drug coverage.  Please click here for a schedule of Ryan’s upcoming town hall meetings.