Silver City,
Apr 7, 2004 -
During a swing through southwestern New Mexico on Monday, U.S. Rep. Stevan Pearce and Paul Pearson of the Southwest District Health Care Leadership Council held a forum on the Medicare Act overhaul passed by Congress.
Pearce explained the guidelines for drug coverage under the new law.
"The act gives coverage to anyone who has an income up to 150 percent of the poverty line," he said. "A gap occurs with those who have a greater earning capacity. We're giving help to those who need it most."
At drug costs above $3,600 a year, everyone gets 95 percent catastrophic coverage, according a Medicare brochure.
For 2004 and 2005, drug cards will go only to those who earn less than 150 percent of the poverty line. In 2006, the coverage will be available to everyone, but not mandatory.
"'One size fits all' never works," Pearce said. "A person can opt into private plans or stay in the government plan."
Because many companies are dropping insurance coverage for retirees, the government will pay 25 percent of the costs for those who maintain service to their pensioners.
"Some consider this corporate welfare," Pearce said, "but 75 percent will still be off the government rolls."
He explained many drug companies were "gaming the system" and getting multiple extensions for their patents.
"Now they will only be allowed one extension," Pearce said. "By encouraging generics, we will bring competitiveness to the pharmaceutical companies."
Another major change in the law was to include payment for screenings, preventive medicines and physical exams, before a disease becomes catastrophic.
He also touted the Health Savings Plans as "a health care IRA."
A worker can put money into the plans before retirement tax-free. Interest on the plan funds is tax-free, and the person can take the money out for medical expenses tax-free. The assets belong to the individual and can be carried from job to job and into retirement. They also become part of a person's estate, and the beneficiaries can use the money for their health care.
"One of the most important aspects of the bill is the $1 billion in reimbursements for states and counties required to treat illegal immigrants," Pearce said.
"This provision ensures that counties and states will receive money in return for the services the federal government requires they provide," Pearce said. "Rural providers also receive needed relief."
Medicare, before reform legislation, had two operating base payments for inpatient hospital services - one for hospitals located in large urban areas and another, smaller payment, for hospitals located in rural and small urban areas.
"This provision establishes a single standardized amount for hospitals in all areas of the 50 states," Pearce said. "Physicians receive more than in the past, but they are not totally up to equality."
Resident Alex Ricciardelli asked why the government does not control prices or pressure drug companies into lowering costs.
"If you have to join an HMO to get negotiated lower prices, I don't want to have to do that," Ricciardelli said.
"I don't want the federal government to have only a list of certain drugs," Pearce said. "I don't want to be told what doctors to see, what drugs to take."
Pearce explained that consumers in the United States pay for all research and development costs for drugs.
"Canada and Mexico get a free ride," he said. "I have personally spoken to pharmaceutical companies and told them they need to spread the costs. Also, the reimportation question is not a dead issue, but I personally feel there are too many opportunities for countries to flood the nation with counterfeit drugs."
"This bill puts drugs into a competitive market," Pearson said. "If the government negotiated drug prices, they could decide what drugs seniors can and cannot take. It's true, drug coverage is expensive; it's true, research and development is expensive; it's true that drug companies get the money, but you are the beneficiaries."
Pearce and Pearson emphasized seniors will have choices, and will not be forced into any plan. The drug coverage is 100 percent voluntary.
"Anywhere in the rural United States, Medicare will put together PPOs even in the remotest area, so there is a level playing field," Pearson said. "In 2006, a new alternative will be available with the Medicare Advantage, a complete plan."
An audience member asked whether a person will be able to change plans.
"There is an open enrollment period each year," Pearson said. "There is a penalty if a person does not opt in originally, but waits until they're sick."
Gerry Niva, audience member, asked the cost of the discount card.
For the first two years, the card will have an annual fee of $30. After that, the expected fee is $35 a month, according to Pearson.
Another audience member talked about buying prescription drugs in Mexico. According to her, if she went into the new plan, "it would come out basically even."
"What about drug companies that give away drugs to those who qualify?" a resident asked.
"I think pharmaceutical companies have done a poor PR job," Pearce said. "They've done a good job of promoting their products, but not talking to you. I think that will change."
"What about $25 for a Tylenol in the hospital?" an audience member asked.
"You're paying for the service, the facility and the staff," Pearce replied.
Jeff Steinborn, who is running in the Democratic primary for Pearce's House seat, said the pharmaceutical industry is one of the most profitable and "we are the only country that doesn't negotiate prices."
"When will the government start representing seniors?" he asked. "Are you open to negotiating lower drug prices?"
"This country has done well at choosing the competitive model," Pearce said. "I talked to German government officials recently. They do negotiate prices. They asked us to please do something to get the economy growing so 'we can go along behind it.' I know Canadians who don't want to wait one, two or three years for medical care, so they come to this country where they can get it when they want it. I want to remain a competitive model."
Steinborn also spoke to the Daily Press after the forum and questioned the ban on reimportation of drugs.
"We reimport produce every day," he said. "I would support the Federal Drug Administration bringing in cheap drugs through a safe clearinghouse. We need to take care of the bottom line and offer affordable drugs for seniors."
New Mexico Sen. Ben Altamirano made a pitch to Pearce to "get some federal money jerked loose for New Mexico veterans."
"I have been pushing for better service in the area, so vets don't have to go to Albuquerque," Pearce said.
Pearce promised constituent service on the spot for anyone who needs help with an issue.
Pearson invited people with questions to call 1-800-Medicare, or visit the Web site www.medicare.gov.
