September 07,2000

Roth Introduces Medicare Bills That Would Provide Immediate Drug Coverage for Lower Income Seniors

WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) today introduced two Medicare prescription drug coverage bills that would, if enacted, bring immediate coverage to the country's neediest seniors. Both bills would create an immediate, temporary, state-based prescription drug benefit targeted to lower-income Medicare beneficiaries, and are modeled on the successful State Children's Health Insurance Program (SCHIP). Roth, who has worked for the past two years in the Finance Committee to reach a bipartisan consensus solution to the challenges facing Medicare, introduced the bills as a temporary solution until comprehensive reform and broad prescription drug coverage can be enacted.

The principle difference between the two bills is the cost. Roth's first bill -- The Medicare Temporary Drug Assistance Act - Version I - meets the budgetary requirements of this year's Senate budget resolution, which authorized only $20 billion in federal funds for prescription drug costs in the absence of agreement on larger Medicare reforms. This bill would cover beneficiaries with incomes up to 150% of the poverty level, and require a simple majority -- 51 votes -- for approval. Under this bill, 82% of Medicare beneficiaries would have prescription drug coverage (through this program and existing drug coverage).

Roth's second bill -- The Medicare Temporary Drug Assistance Act - Version II -- covers more lower income seniors (up to 175% of poverty), and would cost $31 billion. Because the cost of this bill goes beyond the parameters of the Budget Resolution, 60 votes are required for approval. Under this bill, 85% of Medicare beneficiaries would have prescription drug coverage (through this program and existing drug coverage).

Roth delivered the following statement on the Senate floor Thursday afternoon:

"Mr. President, for the past two years, the Finance Committee has been working on comprehensive Medicare reform -- reform intended both to modernize the Medicare benefit package, which would include the creation of an outpatient prescription drug benefit, and to protect the long-term solvency of the program. The Committee has held 15 hearings on many different aspects of Medicare reform. We have listened to testimony from scores of witnesses. And we appreciate how important, but also how complex an undertaking Medicare reform is, as what we do will affect 40 million Americans who rely on the program.

"Working closely with colleagues on both sides of the aisle, this July I introduced an ambitious Medicare plan that took the best ideas from Republicans and Democrats -- a plan that would achieve the modern reforms we all seek. I am committed to adding a comprehensive prescription drug benefit to the Medicare program, coupled with other major reforms that are badly needed. The plan that I have been working on includes not only comprehensive drug coverage added to the basic Medicare benefit package, but improvements to hospital and other benefits, low-income beneficiary protections, access to medical technologies, private sector drug benefit management, improvements to Medicare's long-term solvency and a strengthened Medicare+Choice program.

"I have been working for several months to refine my bill and to get the finalized estimates from the Congressional Budget Office that are necessary to advance any major piece of legislation in the Congress. These steps are also essential to make sure that the program is kept affordable for beneficiaries and taxpayers alike. I intend shortly to share the latest information with my colleagues on the Finance Committee.

"It is my intention to continue to work aggressively with my colleagues on the Finance Committee -- as well as with all members of this body -- to build on my initiative introduced in July and to move ahead with successful bipartisan reform. I appreciate the strong interest and support our agenda for reform is receiving from both sides of the aisle.

"However, there are real reasons why we don't yet have agreement on Medicare. Program reform efforts are enormously complex. In no small part because Medicare is such an important part of our social fabric. We must work through extraordinarily diverse views on the proper role of government, how best to achieve affordability for beneficiaries and taxpayers -- all while ensuring stability and continuity in the program.

"In view of the fact that at this time there is no clear consensus on comprehensive reform, and that even if there were, such reform would take two or three years to implement, I am today introducing legislation that will help us see that low-income beneficiaries are not denied prescription drug coverage while we continue to move forward with long-term reform. I call this legislation the Medicare Temporary Drug Assistance Act, and it actually includes two versions -- one that meets current budget guidelines and will only require a simple majority for passage, and a second version that is larger, covers more beneficiaries, but exceeds budget guidelines and will thus require a sixty-vote majority.

"I call this initiative the Medicare Temporary Drug Assistance Act, because that's exactly what it is. This effort is not to be mistaken with the lasting, comprehensive Medicare reform that we will continue to aggressively pursue -- a reform effort that will build on our more comprehensive plan offered in July. What this temporary legislation offers is an assurance to low-income seniors that they will be able to receive the help they need while Congress completes the larger task of overhauling the Medicare program. It's an assurance that their immediate needs will not be put on hold as we deliberate and debate the complex intricacies of long-term Medicare reform.

"In testimony before our committee, the AARP repeatedly reminded us how important it is that we proceed carefully with long-term reform. AARP also told our Committee that a program aiding low-income beneficiaries could be achieved in a shorter time frame. I agree with their assessment and support the goal of providing immediate help to low-income beneficiaries. And this is what my legislation will do -- it allows us to continue the intricate work of long-term reform without forcing Americans to dilute their prescription dosages or to choose between prescription drugs and food.

"It is my hope -- as I believe there is sufficient bipartisan consensus on the subject of prescription drug coverage -- that we can come together to pass this legislation. Like I've said, the first version of this bill requires only a simple majority. It has been designed to fit within current budget restrictions. Having my preference, Mr. President, I would like to see us pass the broader version that will require sixty votes, as it will offer more extensive coverage. But either way, these bills -- once enacted -- will implement a temporary, state-based, program to provide low-income Medicare beneficiaries with prescription drug coverage outside the Medicare program.

"Now, Mr. President, let me clear up a couple of misunderstandings that appear to surround this. First of all, I have heard concerns raised that this legislation depends on the appropriations process for funding. This is wrong; they do not. Just like the State Children Health Insurance Program, funding is mandatory under the Social Security Act.

"Second, I know that some have tried to attach a welfare stigma to the new program. Let me be clear: prescription drug coverage is not welfare, it is common sense. Frankly, I am surprised that there are those who would imply otherwise, because for years, we have worked to de-stigmatize important programs such as Medicaid and the State Children's Health Insurance Program.

"The legislation I'm introducing is modeled on the State Children's Health Insurance Program -- a solution designed to extend drug coverage to lower-income Medicare beneficiaries -- beneficiaries with incomes below 150 percent of poverty, and those with the highest out-of-pocket drug costs. If we have sufficient support to pass the more generous measure, we can cover beneficiaries up to 175 percent of the poverty level.

"State participation in the new program would be optional, as it is under SCHIP. According to the National Conference of State Legislatures, 22 states have passed some type of pharmacy assistance law. Senior Pharmacy Assistance Programs currently are in place in 16 states, and another five states have passed laws to create such programs. Many of these states will likely opt to immediately participate in the new program -- receiving federal funds to allow them to quickly expand their programs to provide drug benefits to even more Medicare beneficiaries.

"Eligible beneficiaries living in states that choose not to participate in the new program would receive coverage through a fall-back option administered by the Health Care Financing Administration. HCFA would contract with a pharmacy benefit manager to provide these beneficiaries with a drug benefit comparable to that offered to all federal employees through the Blue Cross Standard Option plan.

"Under either scenario, beneficiaries will receive immediate assistance. They will not have to wait, they will not have to wonder, and most importantly they will not have to worry about what happens in Washington.

"Again, Mr. President, this effort is not to be mistaken with the lasting, comprehensive Medicare reform that we must continue to pursue. It is best seen as a bridge -- a bridge that will provide low-income Medicare beneficiaries with prescription drugs -- a bridge that The Washington Post acknowledged just today would be of material value to lower-income individuals while we continue our work on long-term, bipartisan reform.

"I will continue to work in the Finance Committee toward long-term Medicare reform -- reform which will include a comprehensive outpatient prescription drug benefit. If we can't pass such a package this year, we will resume our efforts on the first day of the next session, and we will not stop until we get the job done. But low-income Medicare beneficiaries should not have to wait for comprehensive reform to be enacted in order to receive prescription drug benefits.

"This legislation will provide prescription drug coverage and peace of mind while Congress continues to work on the larger reform package. Passing it will certainly not obviate the need, nor diminish the pressing objective that we will have to achieve Medicare reform. There is no argument on either side of the aisle that long-term reform is not necessary. But in the interim, we should also take this step.

"Then when we get the long-term reform initiative passed -- when comprehensive reform is enacted -- this interim step will automatically be repealed. In that way, it will not replace or compete with reform. But it will provide valuable protection for many. Full enactment of this legislation will ensure that 82 percent of all Medicare beneficiaries will have prescription drug coverage, through the new program and through other sources of coverage. If Congress votes for increased coverage, 85 percent of all Medicare beneficiaries would have prescription drug coverage.

"Mr. President, I urge my colleagues to join me on this important issue. Our many successes in advancing the Medicare program these last three years have been achieved through cooperation from both sides of the aisle. We have seen what we can do when we move forward on those issues where we have a consensus. Now, let's join together to take this step, as well. Let's implement a principle on which I believe we all agree -- helping our neediest Medicare beneficiaries pay for their prescription drugs. Toward achieving this important objective, there is no legitimate reason to delay."