Congresswoman Heather Wilson, First Congressional District of New Mexico

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Medicare Change Helps New Mexico Seniors with Drug Costs	June 27, 2003

52% of NM Seniors Get Extra Help with Medicine Albuquerque, NM – Congress passed an important hurdle last week on adding a prescription drug benefit to Medicare for thousands of New Mexico’s seniors. H.R. 1, the Medicare Prescription Drug and Modernization Act, passed the U.S. House last Friday. “Medicare was crafted in 1965, and at that time, no one could have guessed the role that prescription drugs would play in the health care system 38 years later. At that time, spending on drugs made up just 1% of health care costs,” says Wilson. “That figure is now upwards of 17%. If we were starting with a clean sheet of paper today, no one in their right mind would craft a health care system for seniors that excluded medicine.” New Mexico has about 229,000 seniors who rely on Medicare. The voluntary prescription drug benefit will be available to all Medicare beneficiaries. And 52% of New Mexico’s seniors will receive extra help with prescription drug costs under the house bill while 45% will get prescription drug coverage at no cost. The extra help comes to seniors at or below 150% of poverty. Those low-income beneficiaries will pay up to $2 per generic and $5 per brand name drug, per prescription. Drug costs for beneficiaries below 135% of poverty, about 104,000 people in New Mexico, will be fully subsidized. Congresswoman Heather Wilson successfully added to the final House bill a provision that will level the playing field and equalize payments to doctors in rural states like New Mexico. The potential impact of Wilson’s dealing is $2.5 million a year in our state’s health care system. “We don’t pay into Medicare based on where we live, and we should not be denied access to health care based on where we live,” says Wilson, who increased Medicare Choice reimbursement rates in the 106th Congress and hopes to duplicate that success in another component of Medicare. “Medicare pays a physician less for their time in Albuquerque than they pay in Dade County, Florida or in Manhattan. That’s wrong and it makes it harder to keep doctors in New Mexico.” Prescription Drug and Medicare Modernization Act of 2003 Summary of DETAILS ON Rx DRUG BENEFIT Voluntary Rx Drug Benefit Available to ALL Medicare Beneficiaries Entitlement under Medicare CBO and CMS Actuary predict universal participation Those who want to stay with their current coverage, may do so, and employers encouraged to continue retiree coverage by receiving some assistance Prescription Drug Benefit: $250 deductible $251- $2,000: 80% coverage, 20% cost-sharing Catastrophic protection after $3,500 out-of-pocket (100% of costs covered) Affordable premium around $35 per month or about $1 a day Good front end benefit aids most seniors (median spending is $1,285) Targets Resources to Those Who Need It Most Fully subsidized premium and cost-sharing up to 135% of poverty, phasing out at 150% of poverty Medicare is primary payor and state governments receive assistance by phasing out their Medicaid prescription drug obligations over a number of years Low-income beneficiaries pay up to $2 per generic and $5 per brand name drug, per prescription High-income beneficiaries (individuals with incomes of $60,000 or couple with incomes of $120,000) have a higher catastrophic benefit Beneficiaries Choose Plan that is Best for Them Choice of at least 2 plans guaranteed Competition holds down costs Choice of any pharmacy *DETAILS on MEDICARE MODERNIZATIONS* Quality Improvements to Enhance Seniors’ Health Protections against adverse drug interactions Electronic prescribing to minimize medical errors Pharmacy therapy and chronic care management for beneficiaries with chronic conditions Long Overdue Modernizations Covers an initial physical, cholesterol screening, and offers disease management Rural relief package for underpaid rural hospitals, physicians, and home health Revitalizes private plans in Medicare, followed by competitive bidding in which seniors can reduce their premiums Adds the President`s regional private Enhanced Fee-for-Service and PPO plans Enrolls 48 percent of beneficiaries in competitive private plans, according to CMS Actuary Initiates FEHBP-style reform in 2010 Bipartisan regulatory relief and contractor reform Competitive bidding for durable medical equipment Reforms pricing for drugs administered by physicians, and adequately reimburses oncologists —END—