Support Changes in Medicare Prescription
Drug Legislation
July 11, 2003
The Issue at Hand
On June 26, the House and Senate
passed Medicare prescription drug bills (S.1/H.R.1) that
would make significant changes in Medicare’s program structure
and benefits. The two bills are now moving to a difficult
conference committee phase, and the National Association
of Social Workers (NASW), seeking to make the final bill
the best possible, supports a number of policies to address
the shortcomings.
The House and Senate versions
each have positive elements; they would help millions of
older and disabled Americans¾ especially
those with low incomes and with very high drug expenses¾with
the cost of outpatient prescription drugs. However, both
bills are inadequate, containing major gaps in coverage.
Additionally, they could lead to potentially unaffordable
increases in cost sharing requirements, and to loss of
coverage for those who already have health insurance from
a former employer.
Changes Sought
in Final Bill
NASW is concerned about key
provisions of S.1/H.R.1, which have the potential to greatly
harm the program and future beneficiaries who will rely
on it. Following are our top priority corrections for the
final version:
Privatization
must not undermine the basic fee for service program
The House bill requires that
the traditional fee for service Medicare program compete
against private plans, based on price, beginning in 2010.
The proposed premium structure is heavily weighted against
the fee-for-service program, thus transforming Medicare
from a defined benefit program to a defined contribution
system. Ultimately, this could result in the dismantling
of Medicare as a universal entitlement. Because private
Medicare plans tend to aggressively recruit younger, healthier
seniors, open competition will mean rising out-of-pocket
costs for the vast majority who prefer to remain with the
stable benefits and premiums of traditional Medicare. The
result of the competition from the House bill will be the
transformation of Medicare’s universal, national risk pool
into a multitude of regional pools that are segmented by
age, income, residence, and health status.
Increases
in premiums and deductibles must be affordable
Both bills add burdensome new
deductibles and co-payments to traditional Medicare and
the new prescription drug benefit. High premiums and deductibles
undermine the social insurance nature of Medicare, because
near-poor beneficiaries would pay for all drug costs in
the benefit gap and incur large copayments for covered
drugs. Many would pay a very significant amount of their
annual income, even with the new coverage. The final
bill must move to close this benefit gap.
Benefits
must not be means tested
Medicare reform must not include
means testing. Relying on income levels to determine access
to Medicare benefits would severely undermine Medicare's
universal nature and fairness. Under the House bill, Medicare
would be required to collect beneficiary income data and
vary the level of the catastrophic cap based on income.
This provision raises relatively little revenue, but undermines
support for the program from those who pay more into it,
since the Medicare payroll tax is not capped. This provision
also raises concerns regarding personal privacy and program
efficiency. All Medicare beneficiaries should have access
to the same level of protection.
Benefits
must apply equally to Medicaid dual eligible persons
The Senate bill does not offer
the Medicare drug benefit to seniors who are eligible for
the Medicaid program. The House bill would slowly phase
in the benefit for Medicaid and Medicare dual eligible
persons. The final bill must ensure that all beneficiaries
receive their drug benefit through Medicare, so that the
program remains one of universal social insurance.
Prescription
drug coverage must be adequate
The gap in drug coverage in
both the House and Senate bills must be reduced. Many beneficiaries
cannot afford to pay 100 percent of their drug costs between
the basic benefit cap ($2,001 in the House and $4,501 in
the Senate) and the catastrophic drug stop loss ($4,900
in the House and $5,813 in the Senate). This gap in coverage¾plus
the $250/$275 deductible, large co-payments, and "average" monthly
premiums of $35¾makes
both plans either too expensive or not cost effective for
many beneficiaries.
A
reliable federal fallback program is essential
Both bills create access to
drug benefits through private plans. In rural areas, where
few health plans may wish to market the new private prescription
plans, the Senate bill creates a federal fallback plan
to ensure benefits are available to all beneficiaries who
need them. Under the House plan, availability depends upon
whether (and at what price) private plans will be willing
to offer coverage. The House bill’s lack of a federal fallback
feature denies a stable drug benefit to commercially unprofitable
areas of the country. This is especially important, because
Medicare’s recent experience with the private insurance
market raises major doubts about the availability and stability
of private plans attempting to serve this population. The
bill must ensure that beneficiaries everywhere have access
to at least one defined and standard drug plan.
Action Needed
Send an e-mail or fax to your
two Senators and one Representative immediately and give
them our sample message (use link below). We do not recommend
telephoning as our message would be lost in a short oral
statement and there is adequate time to reach your legislators
in other ways. Our sample fax or e-mail message appears
on NASW’s Congress Web, available at: http://63.66.87.48/cweb4/index.cfm?orgcode=NASW Our
sample letter may be easily downloaded or transmitted from
this site. If you prefer to send a fax, you may download
the letter from our site and edit it. Call the Capitol
switchboard (202-225-3121), ask for your Senator or Representative’s
office and request his or her fax number.
Ask your Senators and Representatives
to contact the conferees from their own parties to convey
their support for your position. The expected House GOP
conferees are Bill Thomas (CA), Billy Tauzin (LA), Tom
DeLay (TX), Nancy Johnson (CT), and Michael Bilirakis (FL).
Expected House Democratic conferees are John Dingell (MI),
Charles Rangle (NY), and Pete Stark (CA). Announced Senate
GOP conferees are Bill Frist (TN), Charles Grassley (IA),
Orrin Hatch (UT), Don Nickles (OK), and Jon Kyl (AZ). Announced
Senate Democratic conferees are Max Baucus (MT), Jay Rockefeller
(WV), John Breaux (LA), and Tom Daschle (SD).
Timing
The time
to contact your legislators is now. There is uncertainty
in Congress over how long
the conference committee will take to negotiate the final
bill. Many expect consideration to continue after the August
congressional recess, although this is speculative. NASW
will be advocating these policy outcomes throughout the
conference, targeting Members of Congress¾particularly
the conferees¾for
grassroots advocacy action. After we see the conference
agreement, NASW will develop a position on whether or not
to support final passage.
TAKE ACTION
NOW!
THANKS FOR
YOUR ADVOCACY!
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