11.26.07

Whitehouse Continues Fight to Repair Flaws in Medicare Drug Program

Announces Support for Two Senate Bills at Lunch with North Providence Seniors

Providence, R.I. - Over lunch with North Providence seniors today, U.S. Senator Sheldon Whitehouse (D-R.I.), a member of the Senate Committee on Aging, announced he has cosponsored a pair of bills designed to correct serious flaws in the Medicare Part D prescription drug program.

"I've met so many Rhode Island seniors who struggle to pay for the prescription drugs they need," said Whitehouse. "Between the Bush administration's misplaced priorities and big drug companies out to protect their sky-high profits, we have an uphill battle to fight to make the Part D program work better for seniors.

"Empowering Medicare to offer its own drug coverage plans and negotiate for lower drug prices are common-sense fixes that will lower seniors' costs and give them added peace of mind. I'll keep fighting to ensure all seniors have the drug coverage they need and deserve."

Under the Medicare Part D program, enacted in 2003, drug coverage for seniors is available only through private insurers. The enormous array of choices offered by these private plans - 51 in Rhode Island alone this year - can prove difficult for seniors to navigate. Nationwide, 73 percent of seniors think the Medicare prescription drug benefit is "too complicated." 60 percent agree that "Medicare should select a handful of plans that meet certain standards, so seniors have an easier time choosing."

Whitehouse has cosponsored legislation that would give seniors a choice they could depend on to put their needs first - not a corporate bottom line. The Medicare Prescription Drug Savings and Choice Act of 2007 (S. 2219), introduced by Senate Majority Whip Richard Durbin (D-Ill.), would direct the Secretary of Health and Human Services (HHS) to create one or more Medicare-operated drug plans that could compete with existing private prescription drug plans.

Today, a standard private Part D drug plan is required to pay 75 percent of a beneficiary's annual drug costs up to $2,400, following a $265 deductible. Once costs exceed $2,400, seniors must pay the entire cost of their prescription drugs, until their spending reaches $5,451 for the year, when coverage resumes. The gap, known as the "doughnut hole," forces seniors to spend as much as $3,850 out of pocket for prescription drugs.

Under current law, Medicare is prohibited from negotiating with drug companies for lower prescription drug prices. The Center for Economic and Policy Research found that the Veterans Administration, which does have this negotiating power, pays an average of 70 percent less for prescription drugs than Medicare does. The Center also found that the cost to taxpayers of maintaining a private Medicare drug benefit (rather than one administered directly by Medicare, as S. 2219 would provide), combined with Medicare's inability to negotiate lower prices, reaches as much as $30 billion per year.

To solve this problem, Whitehouse cosponsored the Prescription Drug Gap Reduction Act of 2007 (S. 2089). Introduced by Senator Bill Nelson (D-Fla.), S. 2089 would direct the Secretary of HHS to negotiate for lower drug prices with manufacturers on behalf of more than 40 million Medicare Part D beneficiaries, applying the savings towards filling the doughnut hole in the current program.

At today's lunch meeting, held at the Salvatore Mancini Senior Resource Center, Whitehouse argued that seniors in Rhode Island and throughout the country shouldn't be asked to bear the burden of higher costs. Allowing Medicare to directly negotiate drug prices with pharmaceutical companies would bring drug costs down and help eliminate the doughnut hole, he said.

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