Q: Is Washington really poised to add prescription drug benefits to Medicare?
A: For years, candidates for public office and incumbents have campaigned on a platform to help seniors pay for their prescription drugs through the Medicare program. The federal health insurance program provides health care coverage for 40 million elderly and disabled Americans. In just five years, the oldest members of the 77 million baby boom generation will become eligible to receive Medicare benefits. But for the most part, the 38-year-old program does not pay for prescription drugs. That’s a glaring shortcoming in today’s practice of medicine. It’s time to update Medicare and welcome it into the 21st century. As chairman of the Senate Finance Committee, I am optimistic we have a genuine opportunity to do just that. In an historic bill-writing committee meeting I led in June, the Senate Finance Committee passed the most extensive update to the Medicare program since its creation in 1965. The issue has taken on momentum this summer with strong bipartisan support in Congress and key backing by the White House. After four years of discussion on the campaign trail and debate and compromise among lawmakers, the Republican-led Congress is within reach to help seniors afford life-enhancing medicines and strengthen Medicare to accommodate consumer needs and the taxpayer’s tab in the 21st century.
Q: What are some of the details of your Senate plan?
A: My bipartisan plan follows four key principles: access, affordability, choice and competition. We guarantee that seniors can stay with traditional Medicare and receive prescription drug benefits through government-approved plans offered by private insurers. Or seniors may choose from government-approved comprehensive health plans offered by private insurers that also provide both prescription drugs and hospital and doctor benefits. The value of the drug benefits would be the same in both types of plans. By harnessing the purchasing power of 40 million people and letting private insurers and pharmaceutical manufacturers compete for their business, we can bring costs down, increase benefits and let consumers choose which coverage best suits their needs. Under the bill passed out of my Senate Finance Committee, Medicare’s standard drug benefit in both types of plans would be available for monthly premiums averaging $35. Beneficiaries would pay an annual $275 deductible. Medicare would pay 50 percent of drug costs from $276 to $4,500 a year. The beneficiary would then pay all drug costs up to about $5,800 a year. Medicare would pay 90 percent of drug costs exceeding $5,800. Details still need to be hammered out between the House and Senate versions, but lawmakers are closer to agreement than ever before on adding a drug benefit to Medicare. By summer’s end, I hope to have a bill to the president.
Q: Does the Senate bill address the Medicare payment inequity that penalizes Iowa?
A: Yes. My legislation also helps to end Medicare’s historic discrimination against states that do more with less. Now, Medicare’s complex funding formula penalizes states such as Iowa for practicing cost-effective medicine. The penalty is an unfair reimbursement rate. Health care providers and hospitals in 30 rural states get less money back from Medicare for the same procedure performed in Florida or New York. That’s not right. For starters, it creates a disincentive for physicians to practice medicine in these states. This affects young and old alike. Moreover, Iowans pay the same Medicare payroll tax as everybody else and get less in return. My proposal would mean Iowa gets $377 million more in Medicare payments over the next 10 years. With backing by the White House, I will fight to keep this provision during conference negotiations with the House of Representatives.