Saying that it fails to meet the needs of seniors, Ninth District Congressman Adam Smith will oppose the Republican prescription drug proposal today.
“This plan fails on four critical fronts,” explained Smith. “It does not guarantee prescription medicine access for all Medicare recipients, it does not adequately control the spiraling costs of prescriptions medicines, the cost is unpredictable, and it is extraordinarily confusing to patients.”
Providing prescription drug benefits to seniors has risen to the top of Congress’s to-do list in recent months. Several weeks ago, the Republicans wrote a plan and introduced H.R 4680. While the Democrats have a competing plan, the House leadership will not allow a vote on the alternative plan during today’s consideration.
“I know how important it is that seniors have access to the medicines they need to stay healthy,” Smith said. “At the same time, we must ensure that we enact a common sense policy that solves problems instead of just reacting to poll numbers. I am concerned that this bill won’t do a thing to help our seniors.”
Smith says that both access and cost control are important. “This bill fails on a critical front: does it provide all Medicare recipients with access to prescription drug coverage? The answer is no,” he said.
Under the legislation, seniors would enroll in an individual plan offered by a private insurance company. However, private insurance companies have testified to Congress that they are unwilling to offer these individual plans. “We continue to believe that the concept of so-called drug-only private insurance simply would not work in practice,” said Charles Kahn, the President of the Health Insurance Association of America, which is a group comprised of 294 insurance companies.
Scott Serota, the acting President of Blue Cross and Blue Shield, added, “This idea [a private sector drug benefit] provides false hope to America’s seniors because it is neither workable nor affordable.”
The reliance on private insurance companies to offer individual plans does not guarantee coverage for seniors, Smith notes. “We don’t know how many, if any, insurance companies would offer these drug-only plans to seniors and if they would be offered everywhere in America or just in certain regions,” he said. “Instead, Congress should pass legislation that provides a prescription drug benefit under the Medicare program, which serves all of our nation’s seniors.”
Nor does the proposal work to contain the spiraling costs of prescription drugs. “As we aim to provide access to prescription drugs, we cannot forget to also enact measures to contain costs,” Smith said. “This proposal would have seniors purchase individual plans, instead of incorporating any competitive or pooling mechanisms to keep costs down.”
Smith continued, “I don’t support government-mandated price controls on prescription drugs, but we do need to utilize purchasing power and competition to keep drugs affordable, both for seniors and for the Medicare program that will be subsidizing the drugs. I support pooling Medicare recipients and allowing several prescription drug plans to compete for their business. That will help keep costs down.”
Although the Republicans estimate the plan will cost $40 billion over five years, the costs are actually unpredictable because the subsidy to insurance companies can be flexible and the government could be required to offer plans if no insurance company opted to enter a particular region.
“Right now, we have a surplus forecasted, and I think using a portion of those funds to provide a prescription drug benefit to Medicare patients is money well spent,” Smith said. “However, the cost estimate of this plan, I believe, is unrealistically low, and if we’re going to maintain a balanced budget and pay down the debt, we need to be honest about the true cost of our policies.”
Costs to seniors are also unclear. Premiums, deductibles, and benefits could vary widely, and insurance companies may raise them far above the current estimates in order to make offering an individual plan financially worthwhile.
Finally, Smith points out that any prescription drug benefit should be easy to understand and non-bureaucratic. “Once again, the Republican plan falls short,” he said. “This proposal creates a new government agency, and seniors will have to find private drug insurance and deal with a patchwork of different plans, benefits, and availability. We should instead offer all seniors a good prescription drug benefit package as part of Medicare.”
Smith would have supported a Democratic alternative. “The Democrats came up with an alternative plan, which is not perfect in my view, but still better than the Republican plan,” he explained. However, House Leadership did not allow a vote on this proposal.
The Republican proposal is expected to narrowly pass the House this afternoon, but prospects in the Senate are unclear.