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Contact: John Gentzel, Communications Director, 202-225-4315

Prescription Drugs and Medicare’s Changing Role

Rep. Gerlach hosts a Medicare prescription drug workshop (April 6)


Washington, Apr 2, 2004 - The needs of our senior citizens have changed drastically since Medicare was first enacted nearly 40 years ago.

Long gone are the days when hospital stays and surgeries made up the bulk of seniors’ annual medical expenses. Today, it’s expensive prescription medications burdening seniors on fixed incomes with thousands of dollars in yearly out-of-pocket costs.

With our seniors’ needs in mind, Congress passed the Medicare Prescription Drug and Modernization Act of 2003, a law providing for the first time a voluntary prescription drug plan to Medicare that provides complete coverage to more than 12 million of our nation’s poorest seniors while increasing benefits for millions more.

It’s also a law I supported. A law I feel that’s a good beginning as it provides our seniors with significant assistance in obtaining expensive medications, while giving them choice and control over the plan that best suits their needs.

No one believes this plan is perfect. But hopefully, after learning more about the benefit, you’ll see why I believe it’s a good start.

First, since it’s 100 percent voluntary, our seniors can decide to use it if they have no current coverage, or not use it if they’re satisfied with the plan they have now, whether that’s employer-provided coverage or a state-sponsored plan such as Pennsylvania’s successful PACE and PACENET programs.

Then starting in 2006, seniors who do choose to enroll in the new benefit will have up to 75 percent of their drug costs covered after paying a small deductible and a $35 monthly premium. Additionally, Medicare will cover 95 percent of catastrophic, out-of-pocket drug expenses.

But we know seniors need to begin saving now. So starting this spring, we’ve arranged for plan enrollees to receive drug discount cards entitling them to savings of up to 25 percent off the cost of their medications. And millions of low-income seniors living throughout the country will receive $1,200 over the next two years to defray medication expenses.

Also this law will help seniors get low-priced medications faster by forcing pharmaceutical manufacturers to make available in a more timely fashion cheaper, generic drugs.

Although many seniors are happy with the generous drug coverage they have from their former employers, the number of companies offering that kind of coverage has decreased by one-third since the mid-1980s. This leaves thousands of retirees without any prescription assistance or living in fear of one day soon being dropped entirely.

The new benefit aims to halt this disturbing trend by reimbursing the companies who continue to provide benefits to their retirees 28 cents for every dollar they spend on prescription drug programs.

Medicare has long been viewed as simply a payer of bills, and not a facilitator to help its beneficiaries manage their illnesses. Yet 84 percent of Medicare beneficiaries live with one or more chronic conditions.

The new benefit would vastly improve the quality of care offered to our seniors through voluntary programs that will better coordinate services, provide additional tools and resources to help locate proper pain management programs and educate our seniors on the services available to them.

I supported this bill and did so along with colleagues from both political parties in the House and Senate, as well as hundreds of health care groups including the Easter Seals, the American Medical Association, the American Health Association and the AARP, the nation’s largest
senior’s organization.

This bill is not perfect, but it is a positive step toward meeting the current and future needs of our seniors. And remember, this law doesn’t reduce Medicare benefits. It just makes it better.

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