WASHINGTON (AP) — The new prescription drug benefit signed
into law yesterday by President Bush as part of major Medicare
changes will confront seniors with numerous and sometimes-difficult
choices on their health care coverage.
Bush said the new drug insurance “will save our seniors
from a lot of worry.” But the bill’s critics said the
worries have just begun for Medicare’s 40 million older and
The government will spend nearly $400 billion over the next 10
years to subsidize prescription drug coverage, which begins in
January 2006. At the same time, the government will encourage
insurance companies to offer private plans to millions of older
Americans who now receive health care benefits under terms fixed by
the federal government.
“Medicine has changed but Medicare has not — until
today,” Bush said, explaining that prescription drugs and
outpatient care have replaced hospital stays over the past two
decades. “Our seniors are fully capable of making health care
choices, and this bill allows them to do that.”
Republicans generally hailed the signing as a political triumph
they could use in next year’s election to neutralize
Democrats’ historical advantage on issues regarding the
“Democratic leaders have lashed out at us, at the
president and AARP,” House Majority Leader Tom DeLay of Texas
said. “But Democrats have no one to blame but themselves for
their abject failure on health care. We wanted a bill, they just
wanted an issue, and now the American people know who took their
Democrats pledged to fight in the Republican-controlled Congress
for changes in the law, principally for measures to bring down the
price of prescription drugs. “You sold us out, so we’re
going to go all out to repeal what you’ve done,” Sen.
Edward Kennedy (D-Mass.) said.
The first tangible result of the Medicare law will be
prescription drug discount cards that the president said would take
effect in June.
He said seniors will receive a mailing in the spring to explain
the card, which will cost no more than $30 a year. It will offer
discounts that Bush said will range from 10 to 25 percent off
retail prices. Critics say the promise of savings is wildly
The president sought to reassure seniors yesterday that their
choices will be explained to them in detail and that they can keep
the health care they have.
“If you don’t want to change your current coverage,
you don’t have to change,” Bush said.
But that option may not exist for some seniors. The
Congressional Budget Office estimates that 2.7 million retirees
will lose the drug coverage they now receive from former employers,
although other projections are much smaller.
And those seniors who now rely on supplemental insurance to
defray the cost of prescription drugs will be forced to make a
change, as these so-called Medigap policies will be barred from
offering a drug benefit beginning in 2006.
Some Medicaid beneficiaries, among the poorest of seniors, also
could see restrictions placed on their drug coverage, several
health analysts said.
Whether to sign up for the drug benefit or switch from
traditional Medicare to an HMO or preferred provider organization
will be a decision that for many seniors will depend on their
current or anticipated future spending on drugs.
After paying for the first $250 in prescriptions, seniors will
be responsible for 25 percent of the next $2,000 in drug costs.
Between $2,250 and $5,100 in drug costs, the government will pay
nothing. Over $5,100, the government pays all but 5 percent of
The monthly premium for the drug plan is estimated to be a
national average of $35 in 2006. But the exact shape and cost of
the drug benefit also could differ from one region of the country
to the next. And nothing in the law precludes private insurers from
offering more generous but also more costly plans.
The president said the average senior will see today’s
drug bill cut roughly in half, but his calculation includes a
savings of 20 percent that is not found in the law.