This summer both houses of Congress passed historic bills to add prescription drug coverage for 40 million older and disabled Americans insured by Medicare. Created in 1965, the federal health insurance program has provided access to affordable health care for millions of seniors over the last 38 years.
In just a few years, the oldest members of the large baby boom generation will begin to retire and become eligible for Medicare benefits. However, their probable expectations for comprehensive health benefits, including prescription drug coverage, preventive care and chronic disease management won’t be met by traditional Medicare. That’s because Medicare as we know it remains stuck in the 20th century.
As chairman of the Senate Finance Committee, I’m working to bring Medicare into the 21st century. That includes restructuring the program to include better benefits, more choices and equity for rural states like Iowa. The U.S. Senate in June passed by a large margin S. 1, "The Prescription Drug and Medicare Improvement Act," by a vote of 76-21.
My bipartisan bill creates a first-ever, comprehensive prescription drug benefit that would give seniors the choice to sign-up for pharmaceutical coverage under traditional Medicare. It is an entirely voluntary decision. Seniors also would have the opportunity to either stay with Medicare fee-for-service or choose to enroll in new Medicare Advantage to receive drug benefits.
In an effort to modernize Medicare for today’s retirees and strengthen the program for future generations, the Senate went to great lengths to make benefits better. For the first time, preferred provider organizations (PPOs) would be able to fully participate in Medicare. Seniors would have the choice to stay with traditional Medicare with a new, voluntary drug benefit or switch to Medicare Advantage, which would offer enhanced benefits through a PPO. These plans more closely resemble the menu of plans accessed by federal employees and workers in the private sector.
The drug benefit under the Senate plan would begin in 2006. Monthly premiums are expected to be $35, seniors would pay an annual $275 deductible. Medicare would pay 50 percent of drug costs from $276 to $4,500. After $5,800, Medicare would pay 90 percent of all drug costs. During the transition, seniors could take advantage of a drug discount card starting in January 2004.
Workers today consider prescription drug coverage an essential element of any health benefits package. Modern pharmaceuticals now play an integral role in the delivery of medicine. They better target diseases, manage multiple chronic illnesses, improve quality of health care and enhance the quality of life of patients. Medicare as we know it doesn’t offer a drug benefit. And as Americans live longer and face age-related illnesses and disease, it flies in the face of reason that Medicare doesn’t offer pharmaceutical coverage.
At the same time, policymakers also must protect the interests of taxpayers. That’s why lawmakers are working to combine competitive forces of the free market system into the government-run Medicare program. I’m working to get the best of both worlds. That includes striking the right balance that keeps existing sources of prescription drug coverage viable and intact, including employer-sponsored plans.
The House and Senate proposals are budgeted to cost $400 billion over 10 years respectively. However, the measures differ substantially in how drug coverage would be administered to Medicare recipients. As the top Senate mediator on the conference committee charged with ironing out the differences between the House and Senate versions, I’m working hard to bridge the gap and produce a bill the president can sign.
Obviously, the devil is in the details. But the bottom line is this: Medicare in the 21st century needs to offer better benefits, competitive choices, protection from high out-of-pocket health care costs, equity for all 50 states, and efficiencies that enhance quality of care and protect taxpayers.
Compromise is within reach. I’ve been working in Washington long enough to know that the opportunity to modernize an entitlement program doesn’t come knocking every day. Let’s hope lawmakers seize the day and welcome the opportunity to make a difference.