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| Frequently Asked Questions about the House Bipartisan Prescription Drug Plan H.R. 4680 |
July 30, 2000 |
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| Prepared by Congressman Bill Thomas
June 2000
Why do we need a prescription drug plan?
The original Medicare legislation in 1965 did not include a prescription drug benefit—mainly because there were not many prescription drugs available. Now, prescription drugs are pervasive and have become proven life-extenders and life-savers. They are cheaper and safer than surgery and serve to keep people out of expensive nursing homes. But the costs of prescription drugs, some of which can cost thousands of dollars for a year of treatment, are increasing an average of 15-20% per year. The average senior takes 18 prescriptions per year, a number that is likely to rise as more drugs are developed for more health conditions. There are 20 million more Medicare beneficiaries now than in 1965, and life expectancy has increased from about 70 years to about 77 years.
In light of these facts and the 77 million baby boomers approaching retirement age, we must take steps now to fill in the drug gap in Medicare before a crisis arises.
Is prescription drug coverage that serious of a problem?
Prescription drug costs are a formidable challenge to the health and financial security of our nation’s senior and disabled citizens. We want to strengthen and modernize Medicare and provide prescription drug coverage for all seniors and disabled Americans so nobody gets left behind.
What about President Clinton’s plan?
In many ways, his plan is similar to the House plan. Both plans offer a universal, voluntary benefit. Both plans give the most help to the neediest in our society.
But the House plan is different—and we think better—than the President’s plan because our plan is not a government, one-size-fits-all approach. We give seniors and the disabled more options to choose the drug coverage that best fits their personal needs, rather than just one government-administered benefit. The House plan also does more to protect people who have runaway out-of-pocket drugs costs.
Can a senior keep the coverage he already has?
Yes! If you are satisfied with the prescription drug coverage you currently have, you can choose to stay with your original plan and not pay one penny more. It really is that simple. Under the President’s plan, some people with existing drug coverage will lose their current benefits and be forced into the government-run plan.
What kind of choices of coverage will Medicare beneficiaries have?
If you do not want to keep your existing coverage, you will have the choice between at least two different private-sector drug insurance plans no matter where in the country you live. We give insurance plans the flexibility to offer different benefits and different combinations of payment structures, as long as they all maintain comparable value to the “standard coverage” the House plan outlines. The House plan maximizes beneficiary choice and insurance plan flexibility. We make drug coverage convenient for you—the beneficiary.
Why don’t you provide the same benefit for all beneficiaries?
All beneficiaries are not alike. Some fill dozens of prescriptions each month; some fill one or two a year. We allow beneficiaries to choose the plan that best suits their needs—and to change their plans if their needs change. Unlike the President’s plan, the House plan is not a “one-size-fits-some” plan.
Will prescription drug coverage in the House plan be an entitlement within Medicare?
Yes! The nation’s largest advocacy group for senior citizens confirmed today that the House bipartisan plan includes a voluntary prescription drug benefit under Medicare. In a letter to House Speaker Dennis Hastert (R-IL), the American Association of Retired Persons (AARP) said that the House bipartisan plan would offer a prescription drug benefit “in Medicare - a benefit to which every Medicare beneficiary is entitled.”
Further, the House plan “provide[s] for a benefit that would be available in either fee-for-service or managed care settings,” said AARP Executive Director Horace Deets.
How does your plan help low-income beneficiaries?
Our plan pays all the premiums, co-pays, and other costs for low-income senior and disabled Americans up to 135% of the poverty line (i.e. up to $15,187.50 of income for a couple in the year 2000). This subsidy phases out on a sliding scale to 150% of the poverty line (i.e. up to $16,875.00 of income for a couple in the year 2000).
What about Medicare recipients who earn more than 150% of the poverty line?
All senior and disabled beneficiaries, regardless of income, will have access to life-saving medicines through Medicare. We give a little more help to those who need it, but we don’t exclude any Medicare participant. In fact, we provide about a 35% subsidy for non-low-income beneficiaries.
Runaway drug costs can threaten recipients of all income levels. That’s why we’ve said that no beneficiary, regardless of income, will ever spend more than $6000 in out-of-pocket costs. After that amount, Medicare will pay for every penny of your additional drug costs.
How does that compare to the President’s plan?
Under the President’s plan, each beneficiary must pay everything over and above $2000. There is no ceiling for out-of-pocket expenses in his plan like there is in ours.
Do I have to pay a deductible in your plan?
Yes—$250. Though the president’s plan has no deductible, it also has no ceiling for out-of-pocket expenses. Under the president’s plan, you could be stuck with thousands and thousands of dollars in out-of-pocket expenses. Our plan pays 50% of the next $2100 in costs after the deductible. And you never spend more than $6000. Period.
What would be my premium under the House plan?
Though plans will vary slightly, the average premium will likely be $37.
So how does this all fit together?
You pay an average premium of $37 a month. If you’re above 150% of the poverty line and you need prescription drugs, you pay a $250 deductible. Then you pay for half of the next $2100 in costs. And you never pay a penny over $6000. The government picks up the bill for all costs above $6000.
$6000? That sounds like a lot.
If you consider that the average senior takes 18 prescription medicines a year, and that some drugs can cost $8000-10,000 a year, the $6000 ceiling will help a lot of people who need a lot of life-saving drugs. The president’s plan has no such ceiling, so you could be responsible for paying tens of thousands of dollars. In our plan, we give the benefit when people need it most. People don’t have trouble paying their first dollar of drug costs; they have trouble paying their last dollar of drug costs. Our plan is there for you to pay that last dollar.
Drugs costs are continuing to rise. How will your plan keep up with the changes?
Our plan adjusts benefits based on the actual costs of drugs. The president’s plan only makes adjustments of 4-5% a year. But drug costs are rising at 15-20% a year! The president’s plan would fall dramatically short of providing the coverage that senior and disabled Americans really need. Our plan keeps pace with the realities of drug prices. The incorporation of private-market competition in our plan will serve to keep costs down.
Will I get any discounts on the drugs I pay for?
You bet! Under our plan, you will get discounts as high as 39% off retail prices. The non-partisan Congressional Budget Office certifies that beneficiaries will save an average of 25% under our plan and only 12.5% under the President’s plan. Our plan saves seniors and the disabled twice as much per prescription as the President’s plan. Your $37 premium doesn’t just get you reliable coverage—it gets you cheaper prescription drugs!
How is the government paying for your plan? Will you have to raise taxes?
No taxes will have to be raised to pay for our prescription drug plan. In fact, the cost of our plan will be paid for with savings from eliminating the misuses of Medicare dollars. In the past four years, the Republican Congress has taken extraordinary steps to combat waste and abuse in order to save money and make Medicare more efficient for seniors and the disabled. Reducing waste saves taxpayer dollars. When fraud is uncovered and prosecuted, Medicare works better for honest citizens, and more money becomes available for programs, like prescription drugs, that Americans really need.
Once I’m enrolled, where can I call to get answers to specific questions about my coverage?
1-800-MEDICARE |
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