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News Release

PRESCRIPTION DRUG SPENDING WOULD BE CUT IN HALF
FOR MOST SENIORS WITHOUT COVERAGE
New Benefit Would Help Seniors Gain Drug Coverage With Substantial Savings

HHS Secretary Tommy G. Thompson said most American seniors without prescription drug coverage would see their drug spending cut in half, according to a new department analysis of Medicare modernization legislation passed by the House and Senate.

Secretary Thompson said the analysis underscores that seniors would receive substantial and meaningful savings through the efforts of Congress so far. While the two versions of legislation have differences, and conferees are currently working to reconcile the bills, the one thing they have in common is delivering real savings for seniors without prescription drug coverage.

"We're on the verge of providing substantial savings in prescription drug spending to seniors," Secretary Thompson said. "Millions of seniors would be better off than they are today. We can't lose sight of the positive impact modernizing Medicare would have on the health and financial security of seniors. This should provide encouragement for the two houses to come together on a final package that makes these savings a reality."

"We need to finish the job," Secretary Thompson said. "Seniors are tired of waiting, and with such substantive savings at stake, who can blame them?"

Today, 10 million seniors have no prescription drug coverage. These seniors bear the full impact of drug costs and many are forced to go without needed medicines or cut their pills in half to make them last longer. According to the departmental study, the new and voluntary benefit provided in the House and Senate bills would reduce prescription drug spending for most of these seniors by half. And it would prevent many seniors from having to buy supplemental policies that offer minimal drug coverage and cost hundreds of dollars per month.

Under both the House and Senate bills, seniors would pay an estimated $35 monthly premium (about $1 a day) for prescription drug coverage delivered through a Medicare-approved private health care plan. According to an HHS analysis of the legislation, which focused on seniors without existing coverage, savings on prescription drug spending would be as follows:

Consistent with President Bush's framework, seniors with low incomes would pay no premiums for their prescription drug coverage and would save even more on the cost of their drugs. All seniors would see immediate savings through a Medicare drug discount card.

The President wants the Congress to pass legislation that strengthens and modernizes Medicare with better benefits and more choices. He wants to provide seniors with modern medicine delivered in a modern way.

In addition to the prescription drug benefit, Medicare modernization would allow seniors to choose from a variety of health care plans to fit their individual health needs -- just as Members of Congress do. These plans would offer seniors more benefits including:

• Better preventive care for diseases like cancer, heart disease and obesity;
• Care coordination and disease management for conditions such as diabetes, heart disease and Alzheimer's;
• Protection against high out-of-pocket costs; and
• Choice of the doctor or hospital they want for treatment.

Since 1965, Medicare has provided health care coverage for millions of America's seniors, but Medicare coverage has not kept up with medical advances. Last month both the House and Senate passed Medicare modernization bills that would give seniors more choices and better benefits, including prescription drug coverage. President Bush has committed $400 billion in his budget to fund this new benefit, and he is working with both parties in Congress to get legislation to his desk and signed into law.

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Note: All HHS press releases, fact sheets and other press materials are available at http://www.hhs.gov/news.

Last Revised: July 23, 2003