STATEMENT FOR INTRODUCTION OF THE MEDICARE RX DRUG BENEFIT AND DISCOUNT ACT

June 26, 2002

Today, House Democrats keep our promise to introduce legislation creating a real Medicare prescription drug benefit.

The Medicare Prescription Drug Benefit and Discount Act is an entitlement that would guarantee affordable, comprehensive prescription drug coverage to all senior citizens and individuals with disabilities who are on Medicare. It also includes provider payment increases and reforms that meet or exceed, in selected areas, those included in the Republican-written Medicare Modernization and Prescription Drug Act. But this debate is not about provider payments. It’s about providing beneficiaries with needed prescription drug coverage.

The benefit in this legislation is simple. It has no gaps, and no gimmicks. Beneficiaries will pay a $25 monthly premium, have a $100 per year deductible, and 20% co-insurance up to a $2000 out-of-pocket limit. After a beneficiary spends $2000, the government pays for all other needed prescription drugs. Under this legislation, a beneficiary will never pay more than $2000 in a year, and most beneficiaries will pay far less. Beneficiaries whose incomes are under 150 percent of poverty will pay no premiums and no cost-sharing. Those with incomes between 150-175 percent of the poverty level will receive premium subsidies on a sliding scale basis and pay no cost-sharing.

These benefits will be guaranteed for every beneficiary, regardless of where they live. This legislation will reduce costs by using the market clout of 40 million beneficiaries to negotiate lower prices. It will also reduce costs for all Americans by closing loopholes in current law that allow pharmaceutical companies to game the patent system by preventing competition from equally effective, but lower cost, generic drugs.

The Medicare Prescription Drug Benefit and Discount Act guarantees the choices that matter. Under our plan, Medicare will pay toward the cost of every drug, not just those on which the private insurance company cut a special deal. And, under our plan, every pharmacy that is willing to play by the rules will be welcome to participate.

And, importantly, unlike the Republican plan, our plan will never force the elderly or disabled into an HMO or similar private plan in order to get a prescription drug benefit.

The prescription drug coverage in the Democratic bill will seem just like any other Medicare benefit, because it is a Medicare benefit.

Don’t be fooled by Republican rhetoric. The motto of the Republican bill ought to be “caveat emptor” -- let the buyer beware.

Their bill is little more than an attempt to privatize Medicare, while doling out hundreds of billions of dollars in federal tax dollar give-aways to their friends in the insurance and pharmaceutical industries.

And, no matter which measure you use, beneficiaries will pay more and get less under the Republican plan.

Our legislation will not be cheap. But we don’t think twice about the cost of covering doctor visits and hospital stays under Medicare today. I would argue that prescription drug coverage is as essential to good health care in the 21st century as physician and hospital care was in the 20th century when Medicare was created.

Make no mistake: The Republican bill is designed simply to provide political cover for Republican members, not prescription drug coverage for senior citizens and individuals with disabilities.

Our bill meets the needs of the 40 million Americans who depend on Medicare. That’s why the leading beneficiary organizations support this legislation. I look forward to the debate. I urge my colleagues to join us in support of a real Medicare drug benefit. Vote “yes” on the Medicare Rx Drug Benefit and Discount Act.