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Walden Op-Ed on Medicare Prescription Drug Benefit for Seniors

Location: Washington, DC

Walden Op-Ed on Medicare Prescription Drug Benefit for Seniors
April 28, 2004

WASHINGTON, DC - U.S. Congressman Greg Walden (R-OR) authored the following op-ed on the prescription drug discount cards that will be made available to qualified seniors under the bipartisan Medicare Modernization Act, which was signed into law by the President on December 8, 2003.

By Congressman Greg Walden
April 28, 2004

In a matter of weeks, seniors in Oregon can begin enrolling in a voluntary prescription drug discount card program that will provide average discounts of 35 percent for generic drugs and 17 percent for brand-name drugs with the use of certain Medicare-approved drug discount cards. These cards will be provided under the Medicare Modernization Act, the AARP-supported, bipartisan legislation passed by Congress last fall to provide a prescription drug benefit for seniors and modernize the Medicare program. To the thousands of Oregonians who have approached me and written to me pleading for relief from the high cost of their prescription drugs, my message is simple: help is finally on the way.

The legislation we passed not only adds a prescription drug benefit for 40 million seniors, but also brings the entire Medicare program into the 21st Century. Medicare now addresses payment inequities between rural and urban health care providers and will cover more preventive services and screenings.

One of the most important features of the Medicare bill will go into effect on May 3rd, when seniors can begin enrolling in a Medicare-approved drug discount card. These cards will be available until a permanent prescription drug program is launched in 2006. Seniors who do not have other drug coverage can choose to sign up for the Medicare drug discount card. Oregon seniors will be able to fill out a single standard enrollment form to sign up for any one of the 28 different Medicare-approved cards offered under the program. The enrollment fee for the cards ranges from $0 to $30 depending on the card sponsor, and the enrollment fee will be waived for certain low-income seniors. These discount cards will be accepted at pharmacies around the country and will help seniors defray the costs of their life-saving prescriptions.

To obtain the discount card enrollment form and find out which cards are available in your area, visit on the Internet and click on "Prescription Drug and Other Assistance Programs." This site offers help in choosing a discount card and filling out the enrollment form. Seniors can also call 1-800-MEDICARE toll-free and speak to a live customer service assistant. Using either of these resources, seniors can compare the prices of drugs and discounts offered by the card sponsors, find out which pharmacies in their community accept the discount cards and request a personalized booklet that lays out the discounts offered on specific medications.

Under the new law, seniors with incomes below $12,123 for individuals and $16,362 for couples will also receive a $600 credit in 2004 and 2005 to help them with their drug costs. Their discount cards will function like a gift card, where the cost of each prescription is deducted from a $600 balance credited to their card each year. Approximately 77,000 low-income seniors in Oregon will qualify for this credit. Some of the drug card sponsors have already indicated that once low-income seniors use up their $600 credit they will continue to receive prescriptions at little or no cost; only a nominal processing fee will be charged.

In 2006 the permanent benefits contained in the new law will become available to all Medicare beneficiaries. This benefit is completely voluntary - NO ONE will be forced to sign up. If you already have drug coverage through an employer retiree plan or a supplemental insurance plan and are happy with your coverage, you can choose to stay in that plan. The choice is TOTALLY yours. Medicare will be there to provide you with all the information you need to determine what is best for you and your spouse.

The assistance provided to low-income seniors becomes more generous in 2006 under the new Part D drug benefit. Those with incomes below $12,123 for individuals and $16,362 for couples will pay no monthly premium for their prescription drug coverage, no annual deductible and will pay only $2 for generics and $5 for name brand drugs. Those with incomes up to $13,470 for individuals and $18,180 for couples will have a reduced monthly premium, a $50 annual deductible and will pay only 15% of the cost of their prescriptions.

Those who don't qualify for low-income assistance can also sign up for Part D in 2006. For a monthly premium of $35 seniors will receive a 75% subsidy for prescription medication costs, up to $2,250 per year. On top of that, they will receive a 95% subsidy should their out-of-pocket drug costs reach $3,600 per year. Considering that 70% of seniors in Oregon have annual drug costs below $2,250, this will help meet the needs of many seniors while protecting them from catastrophic loss due to unexpectedly large medication needs.

One criticism of the new law is that it prohibits the Secretary of Health and Human Services from negotiating drug prices for the Medicare program. This criticism was refuted by the non-partisan Congressional Budget Office (CBO), which recently stated that, "CBO estimates that substantial savings will be obtained by the private plans and that the Secretary would not be able to negotiate prices that further reduce federal spending to a significant degree." Indeed, according to CBO estimates, private plans will save seniors more on drug prices (20% to 25%) than a government run "fall back" (12.5%) because private plans have both the tools and incentives to negotiate lower prices.

As with past measures, we will have to monitor the implementation of the Medicare Modernization Act to ensure that it meets the needs of America's seniors. But at the end of the day, this much is clear: if the opponents of the Medicare reform bill had had their way, seniors would still be waiting for assistance in paying for their prescriptions. Fortunately, because of the new Medicare law, the time when seniors see substantial reductions in their pharmacy bills is literally only weeks away.

Congressman Walden represents the Second Congressional District of Oregon, which includes 20 counties in southern, central and eastern Oregon. He is a Deputy Whip and a member of the House Committee on Energy and Commerce as well as the Committee on Resources.

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