After years of promises echoed by candidates on the campaign trail, the Republican-led Congress has defeated partisan gridlock in Washington and delivered the first-ever Medicare prescription drug benefit.
The 38-year-old public health insurance program for seniors and the disabled provides health care security to 40 million Americans. Medicare has sustained its mass appeal among beneficiaries for four decades because it offers universal coverage for individuals with disabilities and all Americans age 65 and older and allows beneficiaries to choose their own doctors.
On the other hand, Medicare's outdated benefits structure is stuck in the 1960s practice of medicine which relied heavily on hospitalization. Today, the miracles of modern medicine include life-saving pharmaceuticals, preventive health care services and disease management practices that aren’t covered by traditional Medicare.
Despite fiercely held beliefs on both sides of the issue, a bipartisan agreement and strong support from the White House and congressional leaders saved the hard-fought negotiations from unraveling at the seams.
Strong grassroots support from millions of older Americans and national patient advocacy and health care organizations, including the 35-million member AARP organization, the National Council on Aging, the American Diabetes Association, the Alzheimer’s Association, and the U.S. Chamber of Commerce also helped steer the prescription drug benefit to victory.
From my position as the lead Senate architect of the legislation, I fought to make sure that the final bill considered in the Senate was a bipartisan bill. I considered three elements in the overall package non-negotiable including keeping the right for beneficiaries to stay in traditional Medicare, ensuring the drug benefit is comprehensive and affordable, and leading the fight for strengthening rural Medicare.
Under the bill approved by Congress in November, Medicare recipients would have the option of purchasing drug coverage for about $35 a month. After paying a $250 deductible, seniors would have 75 percent of their prescription drug bills covered, up to $2,250. And those whose annual out-of-pocket drug costs reach beyond $3,600 would receive 95 percent coverage. Low-income seniors would pay $1 to $5 in drug co-payments. Plus, for these lower-income seniors, the monthly premium is lower or completely eliminated and the drug benefit would cover 85 to 98 percent of their entire prescription medicine bill.
Starting next April, seniors would have the option to purchase drug discount cards until the full program gets up and running by January 2006. With these Medicare-approved cards, seniors would save 10 to 25 percent off the cost of most medicines. In addition to the discounted drugs, low-income seniors under 135 percent of the federal poverty level would receive a $600 annual subsidy until the comprehensive benefit program begins.
The bill also protects seniors currently covered by retiree plans offered by employers by providing sponsors $89 billion over 10 years to encourage them to retain the health coverage they provide their retirees. While companies have been dropping the health coverage they provide for retirees in the absence of a prescription drug benefit, the additional funding is meant to encourage companies to retain that health coverage.
As the lead lawmaker in the Senate during negotiations on the Medicare legislation, I also helped close a loophole that has been used to create clandestine, anti-competitive agreements between brand-name and generic drug manufacturers. This provision ought to accelerate the delivery of lower-priced generic drugs to the marketplace.
Iowans stand to gain with improved access to health care thanks to the new Medicare law. I secured payment increases for Iowa’s health care delivery system in my long-standing effort to address the payment inequity penalizing Iowa and 29 other states. Over the next decade, Iowa will gain an extra $579 million from Medicare. This substantial increase will help keep hometown hospitals open for business, maintain local ambulance services and assist community efforts to recruit and retain highly-qualified health care professionals.
The Republican-led Congress achieved a major breakthrough in an effort to bring Medicare into the 21st century. And it was achieved with the support of both Republicans and Democrats. And remember, if Iowans are satisfied with Medicare as is, they can keep it as is. The new drug benefit is strictly voluntary.
As chairman of the Finance Committee, which bears primary oversight responsibility over Medicare, I’ll continue to serve as a watchdog over the bureaucracy to make sure the new law is implemented according to congressional intent and trouble-shoot issues that may arise.