September 16, 2019

Medicare drug bill

Congressional leaders reached an agreement in principle on legislation to finally add a long- overdue drug benefit to Medicare.

The legislation is far from perfect and details are forthcoming, but it will provide much needed relief to millions of people, especially those who are most needy. Congress allocated $400 billion over 10 years to help pay for this coverage. The benefit leaves substantial gaps in coverage for many people but it is an important foundation upon which further improvements can be made.

Millions of older Americans will begin to benefit from the prescription drug coverage as soon as next May. That is when their Medicare discount cards will be available to reduce the cost of medications. Beginning in 2006, the voluntary prescription benefit assistance becomes available. According to the Congressional Budget Office, those spending between $2,000 and $4,000 a year (40 percent on Medicare) will have their costs cut by about one-third. Those spending more than $5,000 (18 percent of those on Medicare) will have their drug costs cut by half.

Although this drug bill is detailed and complicated, a few of the highlights are as follows:

. $35 monthly premium, coverage is voluntary;

. $250 annual deductible;

. 75 percent coverage until $2,250 total costs;

. no coverage between $2,200 and $5,100;

. annual out-of-pocket limit $3,600 a year (plus 5 percent over $5,100);

. 95 percent coverage above $5,100 total;

. $25 billion allocated to increase payment to doctors and hospitals;

. $88 billion provided in subsidies for employers to retain existing drug coverage;

. premiums, deductibles and the gap would be waived for those earning less than $12,120 a year;

. all beneficiaries will have access to coverage.

In May 2004 all beneficiaries will get a drug discount card and those in the low income will receive a $600 subsidy.

Although this legislation does not provide the coverage we would like, it is a start. We realize this is not the end and it can be revised. Now, we need to address the problem of ever-increasing drug costs.

Gerald Robertson


Executive Committee

AARP Maine


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