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Senators Graham, Smith Announce Agreement on
Bipartisan Prescription Drug Plan
July 26, 2002
WASHINGTON (July 26, 2002) – Senators Bob Graham, D-Florida, and Gordon
Smith, R-Oregon, announced today that they have reached agreement on an
alternative prescription drug benefit plan to be introduced as an amendment
early next week.
"This new bipartisan plan will help all seniors buy prescription drugs,
but it will give the greatest help to the most vulnerable older Americans –
those with the lowest incomes and those with the most serious health problems,"
Graham said. "It is affordable and reliable, and we think it is a proposal that
a majority of senators can rally around."
"Now is the time to put politics aside and work together to help our
seniors get access to quality health care," Smith said. "This is a good, focused
plan that all of us should be able to support. It targets the most help at those
most in need, and is affordable enough for everyone to benefit from the security
it provides."
The key elements of the plan, which would start on January 1, 2005,
include:
• Benefits are available to all Medicare beneficiaries who opt to pay a
$25 annual enrollment fee. There is no monthly premium.
• There is complete "catastrophic" coverage for all drug purchases above
$4,000 in out-of-pocket spending, with only a small co-payment.
• There is comprehensive coverage of all drug purchases for those with
incomes up to 150 percent of poverty. They will pay a nominal share of the cost
per prescription.
• Everyone with incomes above 150 percent of poverty would get a drug
discount of 20 to 35 percent, including a 5 percent federal subsidy. The size of
the discount will depend on the prices negotiated on behalf of Medicare by
pharmacy benefit managers (PBMs).
The Congressional Budget Office's preliminary estimate of the plan's cost
is $400 billion through 2012.
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