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House prescription drug bill offers skimpy benefits to seniors

Tuesday, June 25, 2002

House prescription drug bill offers skimpy benefits to seniors

WASHINGTON, DC – The House is scheduled to vote this week on a bill promoted as a way to provide prescription drug coverage to the elderly under Medicare, but the vote may be postponed as supporters struggle to finish the bill and round up support.
Consumers Union (CU) has found that the bill — H.R. 4954, the Medicare Modernization and Prescription Drug Act – offers skimpy benefits that do not provide adequate help to seniors who are struggling with prescription drug costs. CU says the bill’s dependence on voluntary participation in the private insurance market renders it fatally flawed.
“The longer the House waits to vote on this bill, the more likely it is that lawmakers will see how poor it really is,” said Gail Shearer, the Director of Health Policy Analysis for CU’s Washington DC Office. “The benefits for seniors are meager at best. For all of the hearings and press conferences that lawmakers have held on prescription drugs, surely they can do better than this.”
Shearer found that under H.R. 4954, Medicare recipients who currently spend up to $775 a year on prescription drugs would likely wind up paying larger out-of-pocket costs under the coverage provided by the bill. In other words, those who spend up to $775 a year on prescription drugs would, after they pay their premiums, have to spend even more than they do now on drugs, and therefore many of them would be unlikely to enroll.
Last week, House committees approved two slightly different versions of H.R. 4954 for consideration by the full House, while they rejected an alternative measure proposed by Rep. John Dingell (D-Mich.). Opponents of H.R. 4954 plan to offer a substitute similar to the Dingell bill during the upcoming floor debate. The substitute is expected to have a $100 deductible, cover 80 percent of drug expenditures at first and 100% after out-of-pocket expenditures reach $2,000. The monthly premium would be $25. CU says the expected level of financial relief under the substitute bill stands in stark contrast to the paltry help offered by H.R. 4954. The out-of-pocket costs under the substitute bill would be far lower than those of the H.R. 4954 at every level of spending for prescription drugs, from those who spend the least on drugs to those who spend the most.
Lawmakers are also planning to offer several amendments to H.R. 4954. Janell Mayo Duncan, Legislative Counsel for Consumers Union, encouraged members to add language to boost the availability of generic versions of brand-name drugs.
“Congress needs to overhaul the laws that allow drug companies to keep generic versions of drugs off the shelves. If seniors had the option of buying generics more often, it could save them $250 billion over the next ten years,” said Duncan, citing a recent study by Brandeis University. “If Congress doesn’t do something to clean up the approval process for generic drugs, it’s difficult to see how it can offer a legitimate program to cover drug costs.”
Should the House fail to vote this week, the bill would be postponed until after the members return from a weeklong recess on July 8.
For more information contact: Gail Shearer or Janell Mayo Duncan, 202-462-6262