The bills put forward by Republican leaders in the U.S. House of Representatives this week that pretend to add a prescription drug benefit to Medicare give new meaning to "election year cynicism." Intended according to Republicans' own internal documents to confuse voters, the bills claim to respond to the needs of older Americans for affordable prescription drugs, but would benefit the pharmaceutical companies more than the seniors they say they would help.
Not only are the Republican proposals stingy—they would cover barely one-fifth of what drugs currently cost Medicare beneficiaries - but they are fundamentally unworkable. They would force seniors into private HMOs to get drug coverage instead of providing it directly through Medicare - even though the insurance companies that are expected to offer this coverage have already said they won't participate in a program they believe can't work.
Drug coverage under the Republican proposals would be no more affordable, reliable or workable than Medicare HMOs have been. These proposals, shamefully, are exactly what had been hoped for by the giant pharmaceutical companies - which are already funneling millions of dollars into ad campaigns that thank Republicans for supporting a drug benefit that pushes seniors to the private markets and further away from affordable medicine.
It is despicable that Republican leaders are willing to spend many times more to extend a tax cut to the wealthiest Americans than what they have proposed to meet the drug needs of seniors, and that their plans do absolutely nothing about scandalously rising drug costs that affect coverage for people of all ages.
It is doubly despicable that they are willing to introduce sham solutions to one of Americans' biggest problems.
The United States Congress should stand above gimmicks and pretense and enact a real prescription drug benefit that provides comprehensive, continuous and certain coverage - now.
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Principles for a Meaningful Medicare Prescription Drug Benefit
The AFL-CIO supports a Medicare drug benefit that is adequately financed, comprehensive in coverage, and affordable and voluntary for all Medicare beneficiaries. We also support aggressive initiatives designed to reign in the cost of medications for all Americans. To achieve these goals, the process for considering various proposals must be bi-partisan and allow for full and open debate. Inadequate proposals rushed through the legislative process represent nothing more than a hollow political gesture that will not move us closer to enacting a meaningful benefit.
A meaningful prescription drug benefit must provide comprehensive, continuous and certain coverage. Beneficiaries must have coverage that they can count on. A benefit that has a gap in coverage - in which beneficiaries must pay 100% of their drug costs on their own before coverage is reinstated - may save the program money but it shifts costs entirely onto beneficiaries.
A prescription drug benefit must be provided through the Medicare program as any other Medicare benefit is provided. Providing a benefit through private insurance plans offering drug-only coverage is an idea that even the insurers say won't work. And it would lead to significant variations in premiums, deductibles and co-payments. Medicare + Choice has been a failed example of providing coverage through private plans. Since it began, plans have pulled out of the program or significantly reduced or even eliminated prescription drug benefits.
Rising prescription drug prices threaten not only a Medicare drug benefit, but also all health care coverage. States and employers are struggling with double-digit increases in prescription drug costs. We are concerned that escalating drug prices could offset any relief provided by a Medicare benefit. A Medicare benefit must be paired with aggressive cost-containment measures, including closing loopholes that block generic competition, as well as establishing fair prices for drugs purchased by U.S. consumers.
A benefit must be affordable for beneficiaries, with a low premium and coverage of the vast majority of drug costs. The benefit must prevent large out-of-pocket costs with cost-sharing like that for all other benefits under Medicare, a monthly premium of no more than $25, and a reasonable cap on beneficiary spending. If premiums and cost-sharing requirements for beneficiaries are too great, only the seniors who spend the most on prescription drugs will enroll, leaving out many seniors who need coverage and threatening the viability of the program.
Retirees that currently have adequate coverage should not be placed at risk of losing good benefits. A Medicare drug benefit must not penalize employers that provide retiree health care, the primary source of prescription drug coverage for seniors. Employers who have been offering benefits to retirees should be given the option to receive reimbursement for providing drug benefits that would otherwise be covered by Medicare, or allow retirees to enroll in the Medicare drug benefit with the employer providing additional coverage or assistance with enrollee cost-sharing.
The most urgently needed Medicare reform is to update the program to include prescription drugs. Since Medicare was started more than 35 years ago, many illnesses that were once only treatable in a hospital can now be effectively treated with prescription drugs. Adding a drug benefit to the program makes it current with health care today. The next step in Medicare should be to strengthen its financing so that its future will be secure for all American families. A Medicare drug benefit should not be held hostage to force radical privatization proposals that would cut benefits and increase costs for retirees.
For Information Contact: Kathy Roeder (202) 637-5018
