John Boehner, November 28, 2003

Americans spent nearly $120 billion on prescription drugs in 2000, and it should come as little surprise that senior citizens have one of the largest stakes in this multi-billion dollar industry. As medical technology advances, prescription drugs have become more important than ever to maintaining healthy and productive lives - especially for seniors. A medical condition that may have required lengthy hospital stays a generation ago now may require just one pill, once a day.

But with this great progress in medicine has come rising prescription drug prices. For one in four seniors who lack a prescription drug benefit under their health insurance, they are forced to pay for these expensive drugs out-of-pocket -- often at the expense of other household expenditures. For low-income seniors, the situation is even more difficult; balancing household expenses and high drug costs may not even be a viable option.

With an eye toward the quarter of all seniors who lack prescription drug coverage and toward those low-income seniors who may not be able to afford costly medicines otherwise, Congress recently created a Medicare prescription drug benefit that represents a new era for medicine -- and for the Medicare program. For scores of seniors here in the Eighth District and across the nation, this news is both welcomed and long overdue.

The Medicare Prescription Drug and Modernization Act represents the most significant step forward for Medicare since its creation in 1965. As the title of the measure suggests, this legislation accomplishes two long-sought goals: (1) It creates the first-ever Medicare prescription drug benefit; and (2) It sets in motion a series of reforms to place Medicare on safer footing for future generations. In this column, we’ll review the new prescription drug benefit -- one that millions of seniors have been seeking for years on end.

The new drug benefit is built upon three basic principles:

1. Immediate Savings. Beginning next year, seniors will save up to 25 percent off the cost of most medicines through a Medicare-approved drug discount card, which they will be able to use at their local pharmacy. According to the U.S. Department of Health and Human Services, the typical senior spends $1,285 annually on his or her medicines, meaning this card could save a senior who lacks drug coverage as much as $300 annually. The discount card will provide savings until the full drug benefit goes into effect in 2006, when it will be reviewed by the Department of Health and Human Services.

2. Voluntary Prescription Drug Benefit. Beginning in 2006, seniors without drug coverage may join a completely optional, Medicare-approved plan in exchange for a $35 monthly premium and a $250 annual deductible. Once the deductible is met, Medicare will cover 75 percent of drug costs up to $2,250. Seniors with excessively high drug bills will benefit from an additional catastrophic tier of coverage through which Medicare will cover 95 percent of prescription drug costs exceeding $5,100 per year.

3. Comprehensive Coverage for Low-income Seniors. Single seniors with an annual income under $12,100 and couples with a combined annual income under $16,300 will receive an additional $600 annual subsidy on their drug discount cards until 2006. Once the Medicare prescription drug benefit is launched in 2006, these seniors will receive comprehensive pharmaceutical coverage with no monthly premium and no annual deductible. They simply will pay $2 for generic drugs and $5 for name-brand prescriptions.

Because of the bipartisan work of Congress - and with the strong support of President Bush and senior advocacy groups like the A.A.R.P. - seniors soon will find substantial relief from the rising costs of prescription drugs. But the prescription drug benefit I’ve just outlined comprises only one half of the landmark legislation recently passed by Congress. In my next column, I’ll review with you the other significant reforms and safeguards set in motion by Medicare Prescription Drug and Modernization Act. These modernizations are not just good news for Eighth District seniors, but younger people as well.

Congressman John Boehner, a Republican, represents the Eighth Congressional District of Ohio.