Congress moved closer to creating a prescription drug benefit for seniors covered by Medicare recently, passing bills on the topic in both chambers. However, the legislation drew concern from health advocates, who said the plans go too far toward privatizing Medicare, which provides health services to millions of seniors and people living with disabilities.
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| U.S. Rep. Nancy Pelosi, D-Calif., speaks at a Capitol Hill rally in June that opposed privatizing portions of the Medicare program. Photo by Kim Krisberg |
On June 27, the House and Senate passed their respective Medicare prescription drug benefit plans. The House bill, H.R. 1, otherwise known as the Medicare Prescription Drug and Modernization Act of 2003, passed by one vote, with a tally of 216 to 215. The Senate bill, S. 1, also known as the Prescription Drug and Medicare Improvement Act of 2003, passed by a wider margin of 7621. Both bills were expected to go to conference, where negotiators from both chambers will attempt to work out the differences between the two versions.
Currently, for most beneficiaries, Medicare does not provide prescription drug coverage. The two recent bills before Congress intend to provide a prescription drug benefit for all Medicare enrollees by using private insurers to administer the drug programs.
Expectedly, both bills have garnered criticism from senior and health organizations because of Congress' push toward relying on private insurers to provide for prescription drug coverage. According to the National Committee to Preserve Social Security and Medicare as well as a group of Democrats from the House Committee on Ways and Means, which reviewed the legislation, privatization would leave many seniors vulnerable to the whims of the private sector.
For example, in the Senate bill, seniors living in regions with less than two drug-only private insurance plans could fall back on a government drug benefit. On the other hand, the House bill provides no such federal fallback, stated the committee Democrats. The House bill calls for incentives to entice private insurers to expand their drug plans into regions that do not have drug providers, but cannot require such expansion. In other words, seniors living in regions without prescription drug plan providers and in regions in which a provider chooses not to expand could end up paying 100 percent out-of-pocket expenses.
Both bills also include substantial gaps in coverage, in which beneficiaries will have to pay 100 percent of the drug costs out-of-pocket. In the House bill, there is a coverage gap from $2,000 to $4,900, and in the Senate bill, the gap ranges from $4,500 to $5,800, according to the National Committee to Preserve Social Security and Medicare.
APHA opposes privatizing Medicare, and instead supports the same prescription drug benefit for those enrollees who choose to stay in traditional Medicare as those who choose a private plan. The Associationalso called for a benefit that protects low-income enrollees against premioum and out-of-pocket costs.
The Association sent out three action alerts on Medicare reform, prompting APHA members to send more than 1,000 messages to their senators and representatives in June alone.
"While creating a Medicare drug benefit is surely needed, putting the health of our nation's seniors in the hands of private providers is not the best option," said APHA Executive Director Georges Benjamin, MD, FACP. "When it comes to their health, seniors should have the freedom to choose a plan that best suits their needs and interests."
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| Protesters at a Capitol Hill rally in June called for a Medicare prescription drug program that would benefit all enrollees. Photo by Kim Krisberg |
APHA also supports a Medicare drug benefit that is available to all those eligible regardless of income or health status. Unfortunately, the House bill calls for using income as a deciding factor for drug benefits. However, two amendments in the Senate bill have garnered praise and support from the Association. The first would allow states to expand Medicaid and the Children's Health Insurance Program to cover immigrant pregnant women as well as immigrant children, and the second would allow greater access to generic prescription drugs.
Underscoring worries about privatization, a June report from Families USA, a health care consumer advocacy organization, stated that the new Medicare legislation will not serve the best interests of seniors' health. Contrary to supporters of privatization, Families USA found that private plans limit choice and do not control health care spending.
Since 1999, 2 million Medicare enrollees have had to disrupt their care by choosing new doctors and new plans because their private plan decided Medicare was no longer profitable in their region, according to Families USA. Also, between 1970 and 2000, Medicare's average per capita annual spending growth was less than that of private plans, at 9.6 percent vs. 11.1 percent, respectively. Families USA also noted that extravagant compensation packages for top executives in the private sector contributed to high administrative costs within private plans, versus administrative costs within traditional Medicare. The chief executive in charge of Medicare had a salary of $130,000 in 2002, while the average for the highest paid executive at a private plan with more than 50,000 Medicare enrollees was more than $15 million in 2002, according to the report.
The Alliance for Retired Americans brought hundreds of Medicare beneficiaries to the nation's capital in June to rally Congress not to privatize Medicare. Gathered together at Senate Park on the U.S. Capitol grounds on June 25, retirees heard from Congress members and fellow retirees who oppose privatization.
"Blow your whistle against Medicare privatization," U.S. Rep. Sherrod Brown, D-Ohio, told the crowd, which promptly began blowing small white whistles that had been distributed.
One of those whistleblowers was Leonard DeBose, a member of American Federation of State, County and Municipal Employees Retirees, who traveled to Washington, D.C., from Philadelphia to attend the rally. DeBose said he worried that drug costs won't be uniform from state to state if private insurers are involved. He said he prefers a government-run drug benefit because there would be more oversight and accountability than in the private sector.
"I hope (Congress) doesn't privatize my Medicare," he said.
For more information on the Medicare prescription drug benefit legislation, visit http://thomas. loc.gov and search by bill number.
Other information is online at www.apha.org , www.families usa.org and www.retired americans.org .