Officials, residents try to make sense of new drug plan

April 13, 2004|by DON AINES

CHAMBERSBURG, Pa. - Changes in Medicare coverage that include the addition of a prescription drug benefit affecting about 40 million Americans begin in June, but only a few dozen people turned out Monday for a town meeting on the issue sponsored by U.S. Rep. Bill Shuster.

The first phase of the program begins in June, when senior citizens can begin using discount cards for prescription drugs. Several people at the meeting questioned how effective the discount program will be, along with the guaranteed drug benefit that replaces it in 2006.

"I am deeply unhappy with the fact that the bill does not allow Medicare to negotiate drug prices," John Pace Sr. of Chambersburg said after the meeting. That would allow the government to "use the clout of the entire country" to negotiate drug costs, rather than leaving it up to insurance companies and other providers to bargain with drug manufacturers, he said.


"We put too much reliance in the pharmaceutical companies," said Marlin Wagner of Chambersburg. "They bought this drug plan."

"There has been a lot of misinformation" about the bill passed by Congress in December, said Shuster, R-9th. That includes the "doughnut hole" in coverage in the benefit for prescription costs above $2,250 a year and below $3,600.

Shuster said the average senior citizen pays about $2,300 a year for prescriptions. Medicare would offer the prescription benefit for a $35 monthly premium and a $250 deductible and pay up to 75 percent of drug costs up to $2,250.

Medicare also will offer catastrophic coverage, paying 95 percent of drug costs over $3,600, Shuster said.

Timothy B. Trysla, an adviser to the Centers for Medicare and Medicaid Services, said the drug benefit can be used to supplement state prescription programs such as Pennsylvania's PACE program. By using federal dollars first, he said, the money in state programs can be used to provide other services to seniors.

For low-income seniors, Medicare will offer a $600 prescription subsidy this year and in 2005, Trysla said. After 2005, the poorest seniors will have co-payments of $2 for generic and $5 for name brand drugs.

Employers who provide prescription plans will receive a federal subsidy of 28 percent on drugs costs between $250 and $5,000 for their employees, Trysla said. He said that is to encourage employers to continue providing prescription plans.

A decade ago, 66 percent of employers offered prescription plans, a figure than has dropped to 33 percent, Trysla said. "It's an effort to stop the hemorrhaging," he said.

Paul Politis, who is running unopposed for the Democratic nomination for the 9th District, said a single payer system for prescriptions would be more efficient than the system Congress devised. He said the plan is too complicated and many seniors "will end up just walking away and giving up."

Politis said drug companies are able to sell drugs to Canada at a profit, with those drugs being resold to Americans at a lower price than they are sold domestically.

Shuster said he favors re-importation at this point, but that it is ultimately a trade issue. Dictating what prices drug companies can get for their products would remove the incentive to develop new drugs, he said.

Trysla said there are quality and safety issues involved with buying drugs from Canada or any other country. He said there is no guarantee that drugs bought in Canada came from there or the United States.

The bill also includes an introductory physical exam for Medicare. The idea, Shuster said, is to save money by identifying health risks and prevention strategies instead of waiting until someone comes down with a disease and it is more expensive to treat.

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