On June 13, the House Ways and Means Committee held a hearing to discuss prescription drug coverage under Medicare. Opening the hearing, Committee Chair Bill Archer (R-TX) said, “Our seniors deserve more than partisan politics on an issue as important to them as prescription drugs.”
Currently, Medicare covers prescription drugs when they are provided during an inpatient stay at a hospital or nursing facility and when the drugs cannot be self-administered. As a result, Medicare beneficiaries are forced to seek supplemental coverage for prescription drugs, with only two-thirds of beneficiaries doing so.
Nancy-Ann DeParle of the Health Care Financing Administration (HCFA) detailed the administration’s proposed Medicare prescription drug benefit, saying, “Those without coverage must pay for essential medicines fully out of their own pockets, and are forced to pay full retail prices because they do not get the generous discounts offered to insurers and other large purchasers.”
Under the administration’s plan, over half of the non-Social Security budget surplus would be devoted to Medicare, extending the solvency of the Medicare Trust Fund until 2030. All beneficiaries would be eligible for prescription drug coverage, and the coverage would be voluntary. Medicare would pay half of the monthly premiums for prescription drug coverage. HCFA estimates that seniors would pay $26 per month in 2003, the first year the plan would be implemented.
Additionally, the administration’s plan would pay for half the cost of each prescription, with no deductible, up to $2,000 in 2003. The benefit cap would rise to $5,000 by 2009. While participating drug benefit managers would be allowed to establish a drug formulary—a list of drugs covered by the plan—they would have to cover off-formulary drugs if a physician certifies that the drug is medically necessary.
Putting a woman’s face on the issue, Deborah Briceland-Betts of the Older Women’s League (OWL) told the committee that women constitute 58 percent of the Medicare population at age 65 and 71 percent of the Medicare population at age 85. Additionally, nearly eight in ten women on Medicare use prescription drugs regularly. Most of these women pay for the medications out-of-pocket, resulting in an average expenditure of $2,613 per year for such costs.
Strongly advocating prescription drug coverage for seniors, Ms. Briceland-Betts said that the benefit should be universally available to all Medicare beneficiaries; should be voluntary; should be affordable; should be part of a defined benefit package; should provide access to medically appropriate drugs; and should be indexed to inflation.
The House Commerce Subcommittee on Health and the Environment also held a hearing on prescription drug coverage on June 14.
