July 30,2004

Grassley Welcomes Improvements on Medicare's 39th Birthday


To: Reporters and Editors
Re: Medicare’s 39th birthday
Da: Friday, July 30, 2004

Sen. Chuck Grassley, chairman of the Committee on Finance and a chief architect of historic improvements to the Medicare program, made the following comment on Medicare’s 39th birthday.

“Medicare is such a part of our society that it’s hard to remember a time without it. That’sexactly as it should be. No one will have to return to the status quo before Medicare, when half ofolder Americans had no health insurance at all. Under Medicare, all older Americans have healthinsurance. Soon that health coverage will be the best in the program’s history.

“Last year Congress enacted an historic bipartisan agreement to strengthen and improveMedicare. The Medicare Modernization Act was the culmination of years of work by Republicansand Democrats who came together to get the job done. The AARP called the Medicare bill ‘animportant milestone in the nation’s commitment to strengthen and expand health security for itscitizens.’

“President Bush’s signing of the Medicare bill into law made the improved program a reality.The new drug benefit is voluntary. If people are satisfied with the coverage they have, they can keepit. The benefits are targeted to those who need them most. That means those with the highest drugcosts and the least means. Thanks to the new Medicare law, about one-third of Medicarebeneficiaries will be eligible for coverage of as much as 85 to 98 percent of their drug costs with alower or no monthly premium. Medicare will cover 95 percent of drug costs for any enrollee whosedrug costs exceed $3,600 out of pocket. The typical enrollee will save 53 percent off his or her drugs.

“Thanks to the new Medicare law, it’ll be more likely, not less likely, that retiree drugbenefits continue. Medicare soon will have the most comprehensive package of preventive benefitsin history, including a welcome-to-Medicare physical, and coverage of screening tests for heartdisease, diabetes, osteoporosis, and breast, colon, cervical, and prostate cancers.“Seniors now have access to Medicare drug discount cards. Studies show substantial savingsfrom those cards. Just this week the Kaiser Family Foundation found savings of at least 85 percentin low-income households. My own staff’s review of Medicare drug discount cards in Iowa foundsimilar savings.

“It’s shameful for some members of Congress to attack the new Medicare benefits as beingtoo complicated and inadequate. They’re exaggerating the complexity to scare seniors. True,Medicare will have more options than before, but the 41 million Americans with Medicare have 41million individual sets of circumstances. Oversimplify and risk leaving people worse off than underbasic Medicare. Those who claim the new benefits are inadequate have to face reality. There is nobottomless source of cash for Medicare benefits. When the baby boomers begin to retire in 2011, thiswill begin a significant shift resulting in the number of workers supporting each Medicare Part Abeneficiary to drop from 4.0 today to 2.4 in 2030. The total number of beneficiaries will grow fromabout 41 million today to about 70 million in 2025. According to the Medicare trustees, the programwill double as a share of GDP from 1.5 percent today to 3 percent in 2035 and 5.6 percent in 2080.While Medicare benefits should be generous, they also have to be sustainable and affordable forbeneficiaries.

“Rather than attack Medicare, we should take time out to remember how fortunate we areto have such an important program and that we’ve been able to improve it for today’s seniors, protectit for future generations, and ensure that it remains strong and fiscally sound for years to come.”