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Medicare Prescription Drugs

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"Today, we are moving forward together by uniting around common principles, setting standards that any prescription drug plan should meet. That is a significant step, moving us further toward the day when every older American has the choice of affordable prescription drugs."

President Bill Clinton
Thursday, March 9, 2000

Today, at the White House, President Clinton received and endorsed a set of "Prescription Drug Principles" from Senate Democratic Leader Tom Daschle, which will be used by the Senate Democratic Caucus to evaluate any Medicare prescription drug benefit proposal developed in Congress. The Prescription Drug Principles affirm that drug benefits targeted only to low-income Americans through block grants, or primarily to high-income beneficiaries through tax incentives, would be unacceptable. The principles state that any drug benefit should be voluntary, accessible, affordable, competitively administered, provide meaningful protection, and be consistent with broader Medicare reform. Senator Daschle stated that the President's proposal meets these principals, and that he will work to ensure that any plan emerging from Congress will be guided by them.

PRESCRIPTION DRUG COVERAGE IS NEEDED. The following facts support the urgent need for a Medicare prescription drug benefit:

  • Approximately 3 out of 5 Medicare beneficiaries lack decent, dependable prescription drug coverage;

  • 13 million beneficiaries have no prescription drug coverage, and millions more are at risk of losing coverage;

  • Current drug coverage is unstable and declining. Only about one in four beneficiaries has retiree health insurance - and the proportion of firms offering such coverage has dropped 25% in the last 4 years;

  • Most seniors are middle income and would not benefit from a low-income prescription drug benefit; and

  • Only about half of all seniors have a high enough income to benefit from a tax scheme

SENATE DEMOCRATS AGREE ON PRINCIPLES FOR PRESCRIPTION DRUG BENEFIT. The Prescription Drug Principles released today by Senator Daschle and the Senate Democratic Caucus state that any new benefit should be:

  • voluntary;
  • accessible to all beneficiaries;
  • designed to give beneficiaries meaningful protection and bargaining power;
  • affordable to all beneficiaries and the program;
  • administered using private-sector entities and competitive purchasing techniques; and
  • part of an overall plan to strengthen and modernize Medicare.

URGING CONGRESS TO ACT NOW. The President urged Congress to act this year to strengthen and improve Medicare. His FY 2001 budget includes a comprehensive plan that makes Medicare more competitive and efficient and dedicates part of the surplus to improving Medicare solvency and adding a prescription drug benefit which meets all of the Prescription Drug Principles announced today. The President's plan also creates a Medicare reserve fund to add protections for catastrophic drug costs.

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