FOR IMMEDIATE RELEASE: January 28, 2002

CONTACT: JENNIFER LAUDANO (202) 628-3030 mailto:%20jlaudano@familiesusa.org

RESPONSE TO THE BUSH ADMINISTRATION'S NEW PROPOSAL ABOUT MEDICARE AND PRESCRIPTION DRUGS

The following is a statement by Ron Pollack, executive director of Families USA, regarding President Bush's proposal concerning incremental prescription drug coverage for low-income seniors as well as long-term restructuring of Medicare:

"President Bush today outlined his proposals concerning two related matters: first, the $77 billion prescription drug coverage proposal for low-income seniors; and second, the long-term restructuring of the Medicare program. We support well-structured incremental proposals to extend drug coverage to low-income seniors as a first step towards universal drug coverage for Medicare beneficiaries; we look forward to receiving more details about the Administration's proposal so that we can evaluate it. However, we believe that the Administration's long-term Medicare restructuring proposal may cause more harm than good for America's seniors.

"There is no doubt that, as prescription drug costs skyrocket, more and more seniors are finding those costs unaffordable. This growing affordability crisis hits low-income seniors the hardest, both because they have insufficient resources to pay for their prescriptions and they are less likely to have private-sector drug coverage. Hence, as an incremental proposal towards prescription drug coverage for all seniors, the emphasis on reaching low-income seniors first makes good sense.

"The Administration's proposal will need to be evaluated based on two standards. First, is the plan structured so that it will effectively reach a significant number of low-income seniors with drug coverage? Second, is the plan structured in such a way that it can ultimately be incorporated in a drug-coverage system that includes all Medicare beneficiaries? We will release an analysis of the Administration's proposal based on those two standards once the details about the plan are clearer.

"The Administration's proposed long-term restructuring proposal for Medicare, however, may cause significant harm to America's seniors. That proposal is designed to push more and more seniors into HMOs; is likely to result in greater privatization of the Medicare program; and may significantly undermine the traditional Medicare program that has served seniors well for more than three and one-half decades. Seniors have every reason to treat this long-term restructuring proposal with deep concern."