Bush Prescription Drug Proposal Would Not Help Most Seniors in Need

Jan. 29, 2001

Bush Prescription Drug Proposal Would Not Help Most Seniors in Need

States Would Get Blank Check, But No Guarantees for Seniors Who Lack Drug Coverage

 

WASHINGTON, D.C. – President Bush’s prescription drug proposal would fail to help most seniors who lack prescription drug coverage and would give states a blank check with no guarantee that seniors will get the help they need, Public Citizen said today.

Bush is expected to send his prescription drug proposal to Congress today. Based on the plan Bush announced during his campaign, his so-called “Immediate Helping Hand” proposal would provide $48 billion over four years to support state-based programs to help low-income seniors with the cost of prescription drugs.

“The President’s ‘Immediate Helping Hand’ proposal is missing a bunch of fingers,” said Frank Clemente, director of Public Citizen’s Congress Watch. “Instead of working through the existing, successful Medicare program, it gives a blank check to the states, with few guarantees that seniors will get access to the prescription drugs they need. It also would do too little to control the high cost of prescription drugs.”

Public Citizen opposes Bush’s plan because:

  • It would force most seniors to wait for benefits. More than half of all seniors with incomes over 175 percent of poverty and out-of-pocket drug costs under $6,000 in a year would receive no immediate benefits. A single person with $15,000 a year in income (slightly over 175 percent of the poverty level) would need to spend at least $6,000 in out-of-pocket drug costs, or 40 percent of their income, to get any assistance through Bush’s plan.
  • It doesn’t provide coverage through Medicare, so it will fail to reach millions of seniors. Medicare successfully extends coverage for hospital and physician services to almost all seniors (94 percent). Existing state-based, low-income programs enroll only a minority of seniors in need. Nationally, fewer than 800,000 of eight million low-income seniors are enrolled in the 14-state pharmacy assistance programs that are now operational. These low enrollment rates are the result of poor outreach efforts on the part of states and the refusal of seniors to sign up for what they consider to be charity programs for the poor. Clearly, making prescription drug coverage available through Medicare, which has proven so successful at enrolling the elderly, would be a much better solution.
  • Benefits are uncertain for those enrolled. The Bush proposal allows states substantial flexibility in setting the benefit level for their plans. It is unclear if states’ plans would cover all necessary medications and what sort of deductibles, co-payments and caps they would impose. There is a wide range among the states that currently offer some form of assistance to low-income seniors.
  • Less than one percent of Medicare beneficiaries would receive direct compensation for their high drug costs. Less than one percent of Medicare beneficiaries spend more than $6,000 a year out-of-pocket on prescription drugs. This is the threshold seniors must meet under Bush’s plan to receive compensation for some prescription drug costs from the federal government.
  • States may take up to three years to create programs. Setting up a new program would require states to pass enabling legislation, hire and train new staff, and educate beneficiaries about the new program. Experience with the implementation of the Children’s Health Insurance Plan indicates that bringing a new program on-line can take up to three years. Benefits could be made available to seniors much more quickly and reliably if they were provided through the already existing Medicare program.

The Bush administration has described Bush’s proposal as a “transitional” program that is to be replaced with an equally flawed plan to make prescription drug insurance available to Medicare beneficiaries through the private market. Click here to read a more complete analysis of Bush’s prescription drug plans.

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