Jon Kyl, April 3, 2006

The implementation of Medicare Prescription Part D is a huge undertaking, so it’s no surprise that the roll-out of the program has had initial problems that must be sorted out. But they are being solved; and, it’s important to remember that seniors are seeing drug benefits for the first time -- people didn't have any Medicare prescription coverage previously.

One of the longest-serving members of my staff, Jane Grace, can personally attest to the positive results from the prescription drug program. She has helped hundreds of Arizona seniors and Medicaid beneficiaries investigate and enroll in this new prescription plan.

Still, there is more to be done. I remain concerned about the participants that have been caught in the fray -- those who are dual-eligible under Medicaid and are now covered by the Medicare prescription drug program. These are the people in most need of assistance with their prescription drug coverage, and I have asked that Centers for Medicare and Medicaid Services provide frequent updates on the progress we have made in straightening out this situation. Over 68 percent of Arizona’s "dual-eligible" have converted to the new prescription plan.

I am pleased to report that the program is helping millions of Americans -- and at a lower cost than originally thought. It was initially estimated that, to cover drug costs, a monthly premium of $37 would be required; but costs have been reduced to the point that the average premium actually fell to an average of $25. For Arizona, some plans are as low as $6, and some plans don’t charge a premium at all. This translates into savings for participants and for taxpayers. These savings are a result of competition by plans and pharmaceutical companies to negotiate lower prices. Despite claims that purchasing pharmaceuticals from Canada and other countries would produce even more savings, the amount saved from re-importation would be negligible according to a recent report by the Congressional Budget Office. The Associated Press recently reported that Americans are actually seeing additional savings by purchasing drugs through the Medicare program, rather than directly from Canadian pharmaceutical providers as they may have done before.

The deadline for enrollment in the prescription drug program for 2006 is fast approaching. If those who are eligible do not sign up by this deadline, they will face a one percent penalty per month on their premium for the duration of their enrollment. To avoid this, seniors should review their plans in consultation with their medical providers and sign up now for a program that offers a good balance between the premium paid and the amount of coverage they will receive. I believe we should revisit the penalty for late sign-up, since it could accumulate to a level that would make later sign-up impractical.

The American Association of Retired Persons (AARP), the 35-million-member seniors group, supported passage of the new benefit. The AARP recently announced that it would spend several million dollars advertising it to seniors who lack drug coverage and who cannot afford their medications. I hope many will heed their call.

Despite a shaky start, seniors are finally seeing real benefits from the prescription plan, and bumps are being smoothed out along the way. Dual-eligible Arizonans are being assisted in properly changing over from Medicaid; the premium costs to participants are far less than anticipated; seniors no longer have to rely on potentially counterfeit drugs imported from foreign-based companies; and the largest organization representing seniors’ interests endorses this program. There are a number of successes to celebrate, but there is still a lot of work that must be done to make this program better.

Senator Jon Kyl, a Republican, represents Arizona in the U.S. Senate. He serves on the Senate Judiciary Committee, the Finance Committee, and the Energy and Natural Resources Committee.