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President Clinton Urges Congress To Extend Prescription Drug Coverage To Military Retirees And Then To All Medicare Beneficiaries May 16, 2000

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The Briefing Room

Office of the Press Secretary

For Immediate Release May 16, 2000

May 16, 2000

Today, the President will announce his support for extending prescription drug coverage to military retirees and will urge Congress to show the same bipartisan support for extending coverage to all Medicare beneficiaries. Tomorrow, the House is scheduled to vote on the Department of Defense Authorization bill that includes a provision, passed by an overwhelmingly bipartisan 56 to 1 committee vote, to extend the prescription drug coverage now available to military retirees under the age of 65 to all military retirees over the age of 65. Like other seniors, the nation’s 1.4 million Medicare-eligible military retirees are disproportionately uninsured and face prohibitively high prices for prescription drugs. While some military retirees live close enough to military treatment facilities to access prescription drugs, these facilities are out of reach for about three out of four retirees. The President will point out that passage of this prescription drug legislation will not only provide long overdue assistance to the American men and women who have served in the military, but it will assist in the Defense Department’s recruitment and retention efforts. He will also emphasize that it is essential to ensure that all seniors and eligible Americans with disabilities have access to an affordable, voluntary, accessible Medicare prescription drug benefit.

UNCOVERED SENIORS PAY MORE FOR LESS. Uninsured seniors purchase one-third fewer drugs but pay nearly twice as much out-of-pocket. Many of the 1.4 million Medicare-eligible military retirees lack access to affordable prescription drugs. While they have become essential to modern health care, prescription drugs are not covered by Medicare.

PRESIDENT CLINTON URGES CONGRESS TO EXTEND PRESCRIPTION DRUG COVERAGE TO MILITARY RETIREES OVER AGE 65. The House Armed Services Committee’s Authorization bill, developed by Congressmen Spence, Skelton, Buyer and Abercrombie, would provide affordable prescription drugs to military retirees. A similar provision was passed in the Senate Armed Services Committee, under the leadership of Senators Warner, Levin, Allard and Cleland. The House bill would allow retirees to access:

  • Mail-order prescription drugs. Medicare-eligible military retirees would be able to purchase drugs through the National Mail Order Pharmacy, which ensures affordable pharmaceuticals through the distribution and pricing agreements DoD negotiates with pharmaceutical companies. Retirees over age 65 will pay an $8 copay for a 90-day prescription, like other DoD retirees.

  • Prescription drugs at pharmacies using both the TRICARE network and out-of-network pharmacies. The provision would also allow all Medicare-eligible retirees to pay 20 percent coinsurance for prescription drugs at pharmacies in the TRICARE network and 25 percent coinsurance with a $150 deductible for prescriptions at pharmacies out-of-network.

BUILDS ON ADMINISTRATION’S COMMITMENT TO REWARDING MILITARY SERVICE AND IMPROVING RECRUITMENT AND RETENTION. Supporting the House provision will help the nation live up to its commitment to provide needed health care for our military retirees. As Secretary Cohen stated in his letter of support, "They spent their careers defending our country, and deserve our support in retirement." The provision of prescription drug coverage also complements our past efforts to attract and retain needed personnel with pay and pension improvements.

TODAY’S ACTION IS CONSISTENT WITH THE PRESIDENT’S EFFORTS TO EXTEND PRESCRIPTION DRUGS TO ALL MEDICARE BENEFICIARIES. Extending prescription drug coverage to military retirees is entirely consistent with the need for a voluntary Medicare prescription drug benefit that is accessible and affordable to all beneficiaries. The President’s plan is:

  • Voluntary. Medicare beneficiaries who now have dependable, affordable coverage would have the option of keeping that coverage.

  • Accessible to all beneficiaries. Beneficiaries who join the program would pay the same premium and get the same benefit, no matter where they live, through a private, competitively selected benefit manager or, where available, through managed care plans.

  • Designed to give beneficiaries meaningful protection and bargaining power. A reserve fund in the President’s budget helps Medicare beneficiaries with catastrophic prescription drug costs. The plan also gives beneficiaries bargaining power they now lack; according to CBO, discounts would average 12.5 percent.

  • Affordable to all beneficiaries and the program. According to CBO, premiums would be $24 per month in 2003 and $48 per month in 2009, when fully phased-in. Low-income beneficiaries -- below 150 percent of poverty ($17,000 for a couple) -- would receive extra help with the cost of premiums; those below 135 percent would have no cost sharing.

  • Consistent with broader reform. The new, voluntary prescription drug benefit is part of a larger plan to strengthen and modernize Medicare. This plan would make Medicare more competitive and efficient, reduce fraud and out-year cost increases, promote fair payments, and improve preventive benefits in Medicare. The plan would also dedicate $299 billion from the non-Social Security surplus to Medicare to help extend its solvency to at least 2030.

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