Sunday, November 30, 2003

Medicare changes - Pro: It's first step in updating health care

By Sen. Kay Bailey Hutchison

WASHINGTON - While the medical community has ridden the technological wave of the future, pushing the envelope in research into new pharmaceuticals, treatments and life-saving measures, Medicare has been stuck in the 20th century.

Last week Congress passed the most sweeping change for America's seniors in nearly 40 years, bringing Medicare up to date and taking advantage of the incredible advances in prescription drugs.

Pharmaceuticals are one of the true miracles of modern medicine. Ailments that traditionally required an expensive in-patient hospital stay and invasive surgery can now be treated with medication. But most Medicare recipients wouldn't know it. While the government pays for costly heart surgery, it currently will not pay for the preventive drugs that may have precluded the need for an operation in the first place.

Now seniors will have access to a prescription drug benefit for the first time. Beneficiaries will pay a $35 monthly premium and a $250 deductible, after which they pay 25 percent of drug costs between $250 and $2,250, and 100 percent between $2,250 and $3,600. Costs over that threshold would require an average co-pay of $2 for generic drugs and $5 for brand-name drugs, or 5 percent of the total drug cost depending on the plan.

Until these reforms are in place, a prescription drug discount card offering savings of up to 25 percent will be available in 2004, providing some relief immediately.

This measure also offers additional assistance to low-income Americans. Medicare beneficiaries at the poverty level and below will pay no premiums or deductibles and will have nominal cost sharing responsibility, with co-pays of $1 for generic drugs and $3 for other pharmaceuticals. And those at 135 percent and 150 percent of the poverty level will have dramatically reduced premiums, deductibles and co-pays.

In addition to the prescription drug benefit, there are a number of other elements that bring Medicare up to modern-day medical standards. In the end, the legislation is a good compromise and addresses the fundamental problems. One significant element is choice. This plan gives seniors access to a broad array of health-care options, similar to what most working Americans already enjoy.

Seniors can stay in traditional Medicare or choose another benefit package. Another important component of the bill is an increase in reimbursement rates for physicians, many of whom have stopped taking on new patients who are part of the Medicare program.

A key innovation for the general population, not just those within Medicare, is the creation of Health Savings Accounts, which will allow individuals and families to put money tax-free into an investment-type account dedicated to their medical costs. The money is not taxed when taken out for qualified medical expenses, giving Americans another tool to cover health-care costs.

As with any compromise, some areas are not everything you support. I advocated larger reimbursement levels for teaching hospitals, the institutions that train the physicians of tomorrow, treat underserved patients and provide comprehensive and unique services such as neonatal intensive care and burn units for the general population. Although we did get an increase, it was below the levels I wanted, but it was a welcome increase over the status quo.

Let me be clear: This bill is not perfect, but as AARP President James Parkel recently said, "Millions of Americans cannot wait for perfect. They need help now."

After years of talk, we have taken the first step to bring this vital program up to date. For the first time, we can provide a voluntary prescription drug benefit that offers additional assistance for those who need it most, and strengthen Medicare for future generations.


Sen. Kay Bailey Hutchison (www.hutchison.senate.gov) is a third-term Republican from Texas and vice chair of the Senate Republican Conference. Readers may write to her at 284 Senate Russell Office Building, Washington, DC 20510.

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