1 Medicare and Prescription Drugs Rescuing Medicare Step 1 in Saving U.S. Health Care Diane Archer...

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Medicare and Prescription Drugs

www.medicarerights.org

Rescuing MedicareStep 1 in Saving U.S. Health Care

Diane ArcherFounder and Special Counsel

Medicare Rights CenterMay 13, 2004

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What is the Medicare Rights Center (MRC)?• MRC is the largest independent source of

Medicare information and assistance in the U.S.• Founded in 1989, MRC helps older adults and

people with disabilities get high-quality, affordable health care.

• MRC has three main programs: Education and training Client services Policy and advocacy

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Tonight’s talk

• What people really want to know about the new Medicare reforms

• What lies beneath: the demons lurking among the MMA’s 681 pages

• Why Original Medicare works

• How we can save Medicare, and set the country on the path to NHI

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#1 concern: paying for prescription drugs

• A wide range of people with Medicare struggle to afford their medicines Disabled individuals under 65 Retirees with no retiree drug benefits People with incomes that are low but too

high for Medicaid People with HMOs but inadequate benefits

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Lack of Rx coverage impedes access to medicine

• People with Medicare without prescription drug coverage are significantly more likely to: Skip prescribed doses Spend less on basic needs to afford drugs Completely forgo prescribed drugs

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The big question on the minds of people with Medicare:

How will the new law help me afford my prescription drugs?

For the vast majority, it won’t.

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The new law: the Good, the Bad, and the Ugly

• The Good: may help people with low incomes afford drugs

• The Bad: these limited benefits will not help and will likely hurt millions of people with Medicare

• The Ugly: the benefits sugarcoat changes designed to poison Original Medicare

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The Good• All people with Medicare whose incomes

fall below 135% of poverty can get $600 annual subsidy for drugs in 2004 and 2005 and a free drug discount card

• People with low incomes can get additional help paying for drugs starting in 2006

• People with very high drug costs and enough means to spend $3,600 on drugs will have catastrophic coverage.

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The Bad• To get 2004-2005 low-income assistance,

people must actively enroll and pick a card out of a sea of conflicting options Experience with MSPs shows bureaucratic,

opt-in systems depress enrollment Web card comparison tool is overwhelming

• The list of drugs discounted by a card and the price of drugs can change at any time

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The Bad (continued)

• The government is spending tens of millions of taxpayer dollars to promote cards that offer discounts often worse than those available via other options

• Even though drugs discounted can change, people are locked in for a year

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The Bad (still more)• The 2006 Medicare drug benefit will:

have a premium that will likely be prohibitive for millions with Medicare

require people to pay $3,600 out of pocket on covered drugs before catastrophic coverage kicks in

• Low-income assistance will not be automatic for most people, who will have to pass an asset test

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The Ugly• Promoted as “Same Medicare, More Benefits,”

law includes provisions to privatize Medicare Adds $130B in overpayments to private plans over

10 years Forces people to get 2006 drug benefit from a

private plan Imposes 2010 “premium support” demonstrations

on six metropolitan areas Creates special trigger to allow Congress to slash

payments and restructure Medicare

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Medicare is good government

• Original Medicare is one of the most successful government programs

Automatic coverage Dramatic reduction in poverty People love it Protects wide choice of doctors Better at cost containment Able to negotiate reasonable prices

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New law undermines strength of Original Medicare program

• Law prohibits Medicare from negotiating reasonable prices for drugs Permits drug prices to soar unchecked Makes 2004-2005 discount cards’ 10-20%

discounts meaningless Leaves sour taste in people’s mouths – for

$539 billion, can’t government do better?

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Need confidence in government

• Since Medicare’s birth, faith in government has plummeted

• Right wing push to highlight failings of government and virtues of private marketplace

• Confidence grows from results Private marketplace has never been able to meet the

needs of people with costly health conditions; why Medicare was started

Can the government effectively lower your drug prices?

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Private marketplace is poor model for health insurance

• Leaves behind the most vulnerable people Pre-Medicare older adults People with disabilities or other conditions

• Worse at cost containment• First principle is profit motive (not

patient health)

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Key to national health insurance

• Original Medicare’s success is the best evidence that national health insurance can work

• But creating NHI – in effect, Medicare for all – will depend upon confidence in Medicare

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The road to NHI

• First, preserve Original Medicare Build off the people’s confidence in this form

of national health insurance

• Then, expand Original Medicare Give other age groups access to what can

continue to be a successful program

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How you can help NOW

• Demand that Congress repeal the provision forbidding government “interference” with drug pricing Local letter writing campaign Phone calls Jumping on cars

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Conclusion

• New Medicare law is anathema to national health insurance because it undermines confidence in government

• Long-term success in NHI movement may depend on preserving Medicare now

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Stay abreast of Medicare news and advocacy efforts

• Sign up for MRC’s free advocacy and educational newsletters at www.medicarerights.org/periodicalsframeset.html

• To learn more about the Medicare Rights Center, visit www.medicarerights.org.

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1 Medicare and Prescription Drugs Rescuing Medicare Step 1 in Saving U.S. Health Care Diane Archer...

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