MODERNIZING MEDICARE TO INCLUDE PRESCRIPTION DRUGS

Since its creation in 1965, Medicare has provided a vital health care safety net for millions of Americans, but medical advances in the years since then have left the system in need of extensive reforms, chiefly where it comes to paying for prescription drugs. Prescription drugs reduce the need to treat serious illness through hospitalization and surgery, but the soaring costs of these medications have placed a tremendous financial burden on millions of seniors who must pay for these treatments out of their own pockets. Monthly drug bills of $300, $400, or even $500 are not at all uncommon for older seniors living on limited incomes.

For example, Gorham resident Emery Jensen has an annual drug bill of about $4,600. That is about one-quarter of the entire income he and his wife receive from Social Security. Another constituent from our state sent me a 2-page list of the medications her husband took over an 8-month period before he died. The total cost was nearly $4,000. More and more, I am hearing disturbing accounts of older Americans who are running up huge high-interest credit card bills in order to buy medicine they could not otherwise afford. Even more alarming are the accounts of patients who are either skipping doses to stretch out their prescriptions or forced to choose between paying the bills or buying the pills that keep them healthy.

I will never forget an elderly woman coming up to me in the grocery store in Bangor and saying to me she was only able to get half the number of pills her doctor had prescribed because otherwise she would not be able to buy the food she needed. No senior in our country should have to face those kinds of choices.

It is therefore critical we bring Medicare into line with most private sector insurance plans and expand the program to include coverage for prescription drugs. I am very pleased that the Senate has begun the historic effort to bring Medicare into the 21st century and enact the most sweeping reforms in the program's history. My colleagues and I recently approved landmark legislation that will make affordable, comprehensive prescription drug benefits available to our nation's seniors, as well as to people with disabilities who receive Medicare benefits. This legislation is long overdue, and I am pleased that we have finally been able to take action. The Senate-approved legislation originated in the Senate Finance Committee, of which Senator Olympia Snowe is a Member, will make prescription drug coverage a permanent part of Medicare. It provides a comprehensive prescription drug benefit that will be available to all seniors in Medicare, regardless of where they live. Under this bill, seniors will be able to get comprehensive prescription drug coverage, including both up-front and catastrophic protection, for $35 a month premium, beginning in 2006. Moreover, low-income seniors will receive generous subsidies and get additional protections and assistance. The more than 9 million seniors nationwide – including 60,000 seniors living in Maine – who have incomes below $12,120 for a single person (or $16,360 for a couple) will not have to pay any premium to secure coverage. It is important we provide that extra assistance for these very low income elderly people who would be hard pressed even to afford that $35 a month. To provide some interim assistance, starting next year seniors will get prescription drug discount cards that will save them between 15 and 25 percent on each drug purchase. Lower income seniors will receive a benefit of $600 on top of that starting next year.

The bill also includes several other important measures. Historically, Medicare's reimbursement systems have tended to favor large urban areas and failed to take into account the needs of more rural states, and this simply is not fair to states like ours. Ironically, Maine's low payment rates are also the result of its long history of providing cost effective high-quality care, and our state is being penalized for its success in keeping costs down!

I am, therefore, particularly pleased this legislation takes steps to strengthen the health care safety net by increasing Medicare payments to physicians and hospitals in rural states like Maine. According to the American Hospital Association, the provisions in this bill will increase Medicare payments to hospitals in Maine by approximately $63 million over the next 10 years, which will be particularly helpful for our small community hospitals. Those same hospitals tend to serve a population that is older, poorer, and sicker, so they suffer all the more when Medicare reimbursements are unfair because they simply do not the greater costs they must bear.

The Medicare reform legislation also restores some funding for home health care. That benefit has been cut far more deeply and abruptly than any benefit in the history of the Medicare. I am pleased the legislation we considered provides a full inflation update for home health agencies and extends the rural add-on that is vital to sustaining home health care in rural areas of our country. Surveys have shown the delivery of home health services in rural areas can be as much as 12 to 15 percent more costly because of the extra travel time required to cover long distances between patients, higher transportation expenses, and other factors.

Since the cost of providing a meaningful drug benefit will only increase as time passes, it is imperative that we act now. Our senior citizens deserve no less from us. While the bill that emerged from our debate is not perfect, it represents a major step on the road to modernizing Medicare and improving health care in this country. We have taken advantage of this unprecedented opportunity to ensure that the Medicare Program can provide peace of mind to our nation's seniors and true health security, not only to the 40 million American seniors who rely on Medicare today but to future generations as well.