I firmly believe that Social Security does not belong to any one political party, nor does it belong to the
government. It belongs to the people, and we must make absolutely sure that it
will be there for them when they need it.
MEDICARE
In 1965 Medicare was enacted to help older Americans who didn’t
have medical coverage when they needed it most. Medicare now serves nearly 39
million people age 65 or older and a number of younger individuals with
disabilities. The Medicare program is key to the health and peace of mind of
millions of seniors. Before it was created in 1965, seniors often had a very
hard time finding affordable private insurance. A hospitalization or a long
illness could wipe out a lifetime of savings.
The program does need to be modernized to reflect changes in the
practice of medicine and health care technology—witness the role that
prescription medicines play now versus 30 or 40 years ago. And we must also
stabilize the program over the long-term so that it will be there for our
children and grandchildren. The Medicare Trustees recently reported that the
Hospital Insurance program would be stable until 2029, but after that would
collapse under huge deficits. Further, we must consider the Medicare Part B
program. It is growing very fast. Seventy-five percent of the cost of this
program, which pays for doctors’ visits and other outpatient care, is financed
by taxpayer dollars, and the remaining 25 percent is financed by beneficiary
premiums. As the program costs go up, so do the premiums. And right now,
Medicare is taking $50 billion a year in general revenues, mostly to support the
Part B program.
I serve on the House Health Subcommittee, with jurisdiction over
the Medicare Part B program. In the last Congress, I was part of the team that
developed a Medicare prescription drug benefit bill that was approved by the
full House but unfortunately was not considered by the Senate. In this Congress,
too, I am again part of the House Leadership’s prescription drug and Medicare
reform task force and am playing an active role in efforts to stabilize and
modernize the program. You have my assurances that I am committed to ensuring
that any changes we make will be positive changes, not only for tomorrow’s
seniors but for you and others who depend on the program today.
The budget resolution that I proudly supported on March 20, 2002, provides up to $350 billion for a Medicare
reform and a prescription drug plan to help seniors with increasing drug costs.
I am confident the bill my colleagues and I are writing will modernize Medicare
to meet the needs of today’s and tomorrow’s seniors and put the program on a
more secure financial footing.
PRESCRIPTION DRUGS
As a member of the House Republican Leadership's Medicare Reform and Prescription Drug Task Force, I am very pleased to report that on June 28th, the House of Representatives voted to approve our plan, the Medicare Modernization and Prescription Drug Act of 2002. This legislation will give every Medicare beneficiary the option of enrolling in a Medicare prescription drug plan that will provide significant help with prescription drug bills and work to rein in drug costs.
I was appointed to the Task Force because of my strong commitment to providing every senior with the option of Medicare prescription drug coverage and my expertise in this issue as a senior member of the House Health Subcommittee. At every town meeting I hold, and in many of the calls, e-mails, and letters that pour into my offices, I hear from seniors who are really struggling to pay for their prescriptions and who are very upset about the steep increases they are seeing in the price of their prescriptions.
When we initially created the Medicare program in 1965, prescription drugs were a very small part of medical care. Today, that has changed dramatically. No senior citizen should be forced to forego needed medication, take less than the prescribed dose, or choose between paying for their medications or other necessities. America leads the world in the development of new drugs that enable us to effectively treat countless medical conditions and diseases. Seniors must be able to afford these drugs-otherwise, the benefits of the best medications in the world will go unrealized by many.
The plan we developed is voluntary. Seniors who already have prescription drug coverage that they prefer will be able to keep their coverage. Under the plan, in exchange for an annual deductible of $250 and a monthly premium of $33, Medicare will pay 80 percent of the first $1,000 in seniors' drug costs, 50 percent of the second $1000, and provide stop-loss protection. Once a senior's out-of-pocket drug costs reach $3,700, Medicare will pay 100 percent of all further costs. Further, even when the plan isn't directly subsidizing part of seniors' drug costs (between $2,000 and $3,700), seniors will benefit from the lower prices that the plan will be able to negotiate using the market clout that comes with large group purchasing.
So that the plan will be affordable for all seniors, Medicare will fully subsidize premiums and cost-sharing up to 150 percent of the poverty level ($14,500 income for singles, $19,500 for couples) and partially subsidize premiums and cost-sharing for those with incomes between 150 and 175 percent of the poverty level ($17,000 for singles and $23,000 for couples). Under this proposal, 39 percent of Michigan seniors-538,000 individuals-would receive a full or partial premium and cost-sharing subsidy.
Since it will take some time after the legislation is enacted to get a plan in place, the Medicare Modernization and Prescription Drug Act will also provide immediate assistance to all seniors with their drug costs by authorizing Medicare to move forward with a Medicare-sanctioned prescription discount card. The bill will also provide additional immediate assistance to seniors with incomes below 175 percent of the poverty level through grants to the states.
