President Bushs Prescription Drug Proposal
Betrays Senior Citizens and People With Disabilities ;
Medicare Privatization Plan Is Little Changed
from Earlier, Deeply Flawed Proposal and Far Inferior to Proposal
by House Democrats
- March 4 - The Medicare proposal announced by President Bush
today betrays seniors and people with disabilities by forcing
them to join unreliable private insurance plans in order to get
significant coverage for the high cost of prescription drugs.
The White House plan, announced during a speech to the American
Medical Association, is also far inferior to the bill by House
Democrats, also introduced today, to add a drug benefit to Medicare.
"What is surprising
about this new proposal is how little it differs from the administration
plan that was leaked to the press in January and summarily rejected
by members of the presidentís own party," said Frank Clemente,
director of Public Citizenís Congress Watch. "This administration
continues to have its sights set on destroying traditional Medicare.
Its proposal would lure beneficiaries into unreliable private
plans. Those who stay in traditional Medicare would be punished
with much more meager coverage."
proposal would establish two classes of Medicare beneficiaries.
Those willing to give up free choice of doctor and the reliability
of traditional Medicare by joining private insurance plans would
be eligible for more generous prescription drug coverage. Those
opting to stay in traditional Medicare would get a discount card
promising unknown discounts, but no coverage for the high cost
of prescription drugs until they had spent thousands of dollars
out-of-pocket. By contrast, the House Democratsí plan would make
much more generous coverage available equally to those in traditional
Medicare, which covers the vast majority of beneficiaries (89
percent), as well as those in private insurance plans.
proposal would waste taxpayer money because it relies on inefficient
private plans to offer coverage for prescription drugs, whereas
the Democratsí plan would use taxpayer money more wisely by relying
on the much more efficient Medicare program to offer drug coverage.
Government auditors have found that private plans spend far more
on administrative costs than Medicare. HMOs have administrative
costs of approximately 15 percent and indemnity insurers have
administrative costs of 20 percent. In contrast, Medicare spends
just 2 percent on administrative costs.
Medicare over to private insurance companies would mean unreliable
coverage. Since 1999, 2.4 million beneficiaries have had to scramble
to find new coverage when their HMO dropped out of the Medicare+Choice
program. And in much of the country, particularly rural areas,
there are no viable HMOs for beneficiaries to use. In contrast,
by making coverage available through the traditional Medicare
program, the House Democrats have proposed prescription drug coverage
that seniors and people with disabilities would be able to rely
on. In more than 30 years in operation, the Medicare program has
never dropped a beneficiary from coverage.
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