Despite the rapidly increasing cost of prescription drugs, Medicare with a few exceptions does not cover such medications. Consequently most senior citizens spend a great deal of money on prescription drugs. The Congressional Budget Office estimates that the average Medicare beneficiary will spend $2,150 on prescription drugs in 2002, and it is estimated that the amount of money that senior citizens will spend on prescription drugs will average $3,059 by 2005. Unfortunately, many elderly Americans are on fixed incomes and can not afford to pay for both their medications and their other living expenses. Consequently, there is widespread agreement in Congress that a prescription drug benefit should be added to the Medicare program.

On June 28, the House of Representatives passed legislation that would establish a Medicare prescription drug benefit on what was essentially a party-line vote. Unfortunately, this legislation would not do much to help the typical senior citizen in Pennsylvania's 14th Congressional District.

In fact, the Republican Medicare prescription drug bill that was approved by the House would simply provide subsidies to private insurance companies to offer separate insurance policies covering prescription drugs. This bill contains no defined benefit -- merely a suggestion about what private plans might want to offer. The bill also fails to set premium levels -- it suggests a monthly premium level of $33 but would allow much higher premiums, as well as premiums which could vary dramatically from year to year and county to county. The bill "suggests" a $33 monthly premium, a $250 deductible, a copay of 20 percent of the next $750, and a copay of 50 percent of the next $1,000. And while the Majority's Medicare prescription drug bill would cover all prescription drug costs once a Medicare beneficiary had spent $4,096 -- $360 on premiums and $3,700 on drugs -- it would fail to cover any out-of-pocket costs between $1,296 and $4,096. Finally, this bill would provide some assistance for Medicare beneficiaries with incomes below the poverty level, but not enough.

In contrast, the Democratic alternative would guarantee a monthly premium of $25 per month, a $100 deductible, and 20 percent copays for drug purchases above the first $100. Out-of-pocket drug costs would be capped at $2,000. Unfortunately, the majority party in control of the House of Representatives refused to even allow consideration of this alternative. I will continue to work to provide meaningful, affordable prescription drug coverage under Medicare.

Congressman Bill Coyne Reports from Washington
Fall 2002