Medicare's Prescription Drug Benefit

Date: March 29, 2006
Location: Washington, DC
Issues: Drugs

MEDICARE'S PRESCRIPTION DRUG BENEFIT -- (House of Representatives - March 29, 2006)


Mr. BURGESS. Mr. Speaker, I thank the gentleman for yielding.

I am sure my colleagues have pointed out tonight we have less than 60 days left on the open enrollment period for the Medicare prescription drug enrollment plan, and we were informed this morning that they have currently signed up 28 million people on the Medicare prescription drug plans.

When this started last November 15, the target sign-up was 30 million. So, Mr. Speaker, it seems pretty likely that CMS is going to meet that target or likely exceed that target.

Just to carry on with numbers a little bit more, there are 42 million senior Americans enrolled in Medicare. Six million of those have coverage from other sources such as the VA or a private retiree plan. If 28 million are covered in the new Medicare prescription drug benefit, that leaves about 7 or 8 million left that is the target population that we really want to reach over the next 60 days. Half of those individuals are, in fact, low income who will receive a significant benefit from the Medicare prescription drug plan.

Well, a big question that has come up certainly on the floor of this House and in some of the newspaper articles you read is, is the benefit worthwhile? Well, the average Medicare recipient will see a 55 percent savings on their prescription drug bill or about $1,100 a year. That is the typical amount. For a senior who is low income, that savings may be more in line with $3,700 a year because of the extra help that someone who is low income will receive.

We have had a lot of negative publicity about the Medicare plan, but the fact of the matter is that as people investigate this plan and sign up for it, the number of problems markedly decrease. Those without coverage currently, the 7 to 8 million, are the target groups that we want to reach over the next 60 days.

There are going to be a number of events that I will be doing back in my district. In fact, I think the President is scheduled to do several events around the country over the next couple of weeks to help get people focused on this.

And one consideration for someone who has kind of been sitting on the sidelines and wondering whether or not to sign up, there was a lot of pressure on the sign-up right after the first of the year when a lot of people showed up to enroll in the Medicare prescription drug plan, and there was some confusion and there were some hurt feelings. But bear in mind there will be additional pressure as we get to that May 15 date.

So do yourself a favor. Do the work required to investigate what plan would be best for you and try to make that sign-up occur during the month of April and do not leave it until the last minute when there may be additional pressure on the system that will tax computer systems and tax phone lines. Do not put yourself in that position. Do not wait until the night before the test to start studying.

Early this year in August through my district, Secretary Leavitt and Administrator McClellan came to town in the Medicare bus. We had a big event at one of my hospitals. Some people came out, but it was hard to generate much interest or enthusiasm. But people were a little bit curious about what was going on.

During the fall we heard about the fact that the people were confused because there was too much choice associated with the plan, and I think that has now evolved into genuine enthusiasm for what this plan may provide the seniors of America.

Pharmacists are of special consideration, particularly the community pharmacists. There have been some issues that the pharmacists have had to deal with that perhaps weren't anticipated at that time, front end of Medicare. I think it is incumbent upon us, as Members of Congress, and the pharmacists, community pharmacists who are constituents, to help the Medicare plans realize that the distributive network that the community pharmacist provides for the Medicare beneficiary is extremely valuable; and they do need to work together so that those community pharmacists are able to continue to provide the benefit for Medicare recipients and Medicare beneficiaries.

Clearly, the community pharmacist has value added, particularly in rural communities, and I know this to be true in many areas of west Texas, just west of where I am from.


Mr. BURGESS. That is a good point. We had a hearing on the Energy and Commerce Committee about this issue just a couple of weeks ago. I asked the Secretary, I asked the Administrator to consider having a follow-up hearing in our community when we get to the first week of May. I hope there will be time to do that. This is an issue in which we need to be sensitive.

To be certain, no one person on this planet is irreplaceable. If the only place to get drugs turns out, the only place to get prescription drug benefit turns out to be the mail order, well, people will accommodate to that. We will lose value if we lose the corner pharmacist, we lose the corner druggist. They do provide so much in the way of expertise and guidance, even to the point of being concerned whether or not the patients are actually taking the medicine, which has been dispensed, always being certain that they get the right medication dispensed in the right dosage.

It does become difficult for these small businessmen to maintain their businesses when the accounts receivable stream has been disrupted a bit, as it was when we made the switch to the Medicare prescription drug benefit.

But as these problems work out, as the accounts receivable stream accommodates to that change, I am hopeful that a good many of these pharmacists, in fact, I have had phone calls from some who explain the difficulties they are encountering, but also always will end up with the comment that I feel like this is a good plan. If you give it time to work, and if you work with us and help us, this is going to be a good deal for our patients and for your constituents.

I did want to point out some of the things that were happening in Texas. I know Texas is not unique, but it is a big State, and there are a good number of Medicare beneficiaries, about 2.5 million out of the 43 million Medicare beneficiaries do live in Texas.

The standard benefit that we are all aware of here, that is provided for by law, the law that we passed 12 years ago, includes a $250 deductible, 75 percent coverage up to $2,250 annually, and catastrophic coverage, 95 percent, paid above $3,600 per year for out-of-pocket drug costs. That is not the end of the story.

One of the things that we were criticized for 2 weeks ago, or 2 years ago when we passed the bill was, no drug company is going to come in and sign up to provide this prescription drug benefit. It will, by default, become a Federal system. But the reality is, we have got 47 plans in Texas.

In those 47 plans, when you look at how much drugs cost, those that are just stand-alone prescription drug plans, there are 47 of them in Texas, on average the monthly premium is $37, 12 plans, only one-quarter cost less than $30 per month.

Of those prescription drug plans that are associated with a Medicare Advantage or a Medicare Plus Choice account, those beneficiaries may choose among 64 Medicare Advantage plans with prescription drug coverage. On average, the drug, the monthly drug premium is $19.44. Nineteen plans could not charge any additional premium for drug coverage for people who are receiving their Medicare on one of those Medicare Advantage plans.

To sum up, the average premium is $37 a month, but drops to $19 a month for patients on Medicare Advantage and prescription drug plans. Of those patients that are just on a prescription drug plan, if they take a plan with no deductible, their monthly out-of-pocket expense is going to be $40. If they have a $250 deductible, their average monthly out-of-pocket expense is under $30.

One of the things that I have stressed when I have done these events in my district, when people tell me that they have trouble making choices because there are too many choices, try to separate the plans and look at it from the standpoint of cost, coverage and convenience. Know the drugs that you are taking.

This is very important. Before anyone calls any of the Medicare hotlines or goes online to try to decide what drug coverage they need, they need to know what drugs they are on and the dosage and the dosage schedule. It doesn't do any good to purchase a Medicare prescription drug plan that doesn't cover the medicines that you are taking.

My colleague and I heard this morning from another Member that for a husband and wife who are both on prescription drugs, but not necessarily on the same prescription drugs, what is a good plan for the one spouse may not be a good plan for the other spouse. Each spouse needs to look at that individually. In this situation, it is not necessary nor sometimes even desirable for both to buy the same plan.


Mr. BURGESS. That brings up the convenience part of that formula that I was talking about. If you wish to get your drugs through the mail order house, by all means make that selection. But if you wish to get a prescription at your chain drugstore, that decision can be made at the time you sign up.

If you wish to receive it from the corner druggist, from the community pharmacist, you can cost compare what would be the best deal or what would be the best price for that individual consumer. Again, it may be different for a husband and wife, if they are, indeed, on different medicines.

Also, look at the coverage, look at the lists of what medicines are covered under that drug plan. In Texas, for example, our first-tier plans cover, on average, 730 drugs on the first tier and 399 drugs on the second tier. That means, on average, the plans in Texas cover over 1,100 different drugs in the plans.

But look at the plan to be certain that the medicines that you are on are, in fact, covered, because that is going to create difficulties if your particular medicine is not covered on the drug plan that you select.

Finally, I do want people to remember that this is a little bit different from standard Medicare in that this plan, this prescription drug program, is not an entitlement. It is insurance. It is insurance with premium support. This is exactly what was recommended by the commission that was set up under President Clinton in the 1990s, premium price support and insurance coverage, rather than a pure entitlement. I have heard from some of my constituents, who are concerned that the cost will go up if they miss the deadline.

Well, that is true, but that would happen with regular insurance as well. Please approach this as insurance coverage and price it as insurance coverage and recognize that what the Federal Government is bringing to the table is price support for that premium. The premium will not be as high as it otherwise would be if Medicare were not a participant.

Well, the gentleman from Georgia has been very generous with his time. I am not sure what time remains with the hour. I will be happy to stay and participate if he would like me to, but I have pretty much concluded the remarks that I had prepared to say this evening.


Mr. BURGESS. Mr. Speaker, one of the things that I find really exciting about the Medicare Advantage Plus Prescription Drug Coverage those plans, many of them do away with the so-called gap in coverage that occurs above expenditures of $2,250 up until you get to that upper limit of $3,600 whatever it is.

Obviously, as a clinician, and the gentleman from Georgia knows this, you don't want your patient stopping and starting their medication as the coverage becomes available and then perhaps they move into the interim period or the gap period where the coverage would not be available, and they just decide to not buy their medicine again. But many of the plans in Texas I have noted will eliminate that gap in coverage so long as the patient is willing to accept the issuance of a generic medication. And I think that is one of the really exciting things about this. It gives the patient an incentive to consider or try a generic medication which is going to cost the government less and the health plan less. It provides them their medicine throughout the year with no break in their medication, and that is what this program is all about when you get down to it.

Gone are the days where we just want to treat things where the crisis happens. Timely treatment of disease, access to prescription drugs, access to preventative therapy, this is the Medicare of the 21st century. Not in the hospital for the pneumonia, in the hospital for the surgery, in the hospital for the pancreatitis or the uncorrected elevated blood lipids or any of these things that would have caused problems in the past. Prevent those. Maintain to that person's health throughout the year, and it is going to cost us less.

In fact, we found some cost savings just with the competition part on the prescription drug plan. We will begin to see the cost savings from the timely treatment of disease and providing prescription drugs to prevent the catastrophic events of untreated chronic disease will begin to reap those benefits 2 years, 3 years, 4 years, 5 years from now. And I for one will be anxiously awaiting hearing about those savings.