NEW Rx DRUG PROPOSAL LETS HMOS CHOOSE WHAT DRUGS SENIORS GET— AND HOW MUCH THEY PAY

Democrats have been fighting for years for a Medicare prescription drug program that is affordable; available to all seniors and disabled Medicare beneficiaries; and is part of the traditional Medicare program. But the proposed prescription drug benefit isn't a real Medicare benefit; it lets HMOs rather than Medicare determine premiums and coverage; it imposes a new “sickness penalty” on Medicare beneficiaries; it won't reduce the price of prescription drugs, and it disadvantages rural communities.

Not a real Medicare benefit—this new plan is based on the failed model of Medicare managed care. Seniors will not have the option of selecting a Medicare prescription drug benefit under this bill. Instead, seniors would be forced to choose between HMOs or other private insurers for drug coverage. And, because the plan only requires one-year service commitments by private insurers, seniors could be forced to change plans, doctors, pharmacies, and even the drugs they take every year.

New “sickness penalty” for Medicare beneficiaries imposes costly burden on seniors. Seniors with drug costs between $3,450 and $5,300 will not get any help with the costs of their medication for a significant part of every year. In addition, they will be required to pay premiums even when they are not eligible for any help with their drug costs—a new “sickness penalty” for seniors. Under this plan, the 7 million seniors nationwide with drug costs of $400 a month would pay premiums but get no coverage for one third of the year.

No set premium—HMOs decide what drugs seniors get and how much they pay. Managed care plans would design the new prescription drug plans, decide what to charge, and even decide which drugs seniors would get. Experience suggests that premiums could vary very wildly: currently, premiums for Medicare HMO plans with drug coverage vary from $99 per month in Connecticut to $16 a month in Florida. [Public Citizen, 2/03]

New drug bill won't reduce drug prices. This bill does not include any provisions to hold down the prices big drug companies charge. Over the past year, drug costs have increased by 9.7 percent. [www.statehealthfacts.kff.org]

New drug bill disadvantages rural communities. By relying on HMOs to offer coverage, the Republican approach does not guarantee the same benefits for seniors in rural communities, where millions of Americans have already been abandoned by HMOs in search of bigger profits elsewhere. There are 9.2 million Medicare beneficiaries in rural areas nationwide. Eighty percent of these seniors have no access to any Medicare HMO. Only 13 percent of them have access to a Medicare HMO that offers a drug benefit. [Families USA, 2/03]

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