Medicare prescription drug bill becomes law

Published 2:15 pm Monday, December 15, 2003

By Staff
Congressman Jo Bonner
December 8 was a truly historic day for millions of American seniors.
During a long-awaited and much-anticipated ceremony at DAR Constitution Hall in Washington, President George W. Bush signed into law the conference report on H.R. 1, the Medicare Prescription Drug and Modernization Act of 2003. This event, attended by leaders from both sides of the aisle, was a landmark moment in the history of the Medicare program and marked the culmination of years of effort by both the House of Representatives and Senate.
Several times in this column in recent weeks, I have discussed some of the specific benefits of this plan. I have particularly focused on parts of this legislation which will have the most direct, positive effects for families in the First District.
However, there is much more that can be said. This week, I would like to take a few moments to continue to highlight the positive aspects of the Medicare bill and some of the additional benefits of the new program.
More specifics on the plan
A recent poll conducted by the University of South Alabama and the Mobile Register asked some of the residents within the district how they felt about the new Medicare prescription drug plan.
Sixty percent of those questioned said they approved of the measure, although many in that group did have some additional questions and reservations about the specific parts of the plan. Nearly thirty percent were not sure how they felt or had no opinion at all.
These results are not surprising. Such sweepings change in a program such as Medicare, which basically has remained constant since its creation in the 1960s, undoubtedly will cause some confusion.
The constancy in the program has in itself been part of the problem. The program was still operating basically as it did when it was created four decades ago. In addition to providing improved and more substantial benefits for seniors, H.R. 1 also brings Medicare into the twenty-first century.
Following are three frequently asked questions on how the new Medicare prescription drug plan will affect America's seniors. Some of this information has been highlighted in this column previously but certainly bears repeating.
1. "Last year, I spent roughly $1,500 for my prescription medications. How will the new law help me?"
It has been determined that, on average, a typical American senior pays approximately $1,460 each year in prescription drug costs. Beginning six months from now, seniors will be eligible to sign up for a prescription drug discount card that will provide immediate, "at-the-register" savings of between 10 and 25 percent. Beginning in 2006, 75 percent of drug costs up to $2250 would be covered by Medicare, and catastrophic coverage of 95 percent would take effect for amounts over $3,600.
For those concerned about the gap between those two amounts, it is important to note that the drug discount card would still be in force, and seniors would still be eligible for the "at-the-register" savings.
2. "As a retiree, will I lose my employer-sponsored retirement health care coverage?"
Until this point, employers have on average been scaling back their health coverage benefits at a rate of 22 percent per year. This new plan includes incentives for employers to keep current employees and retirees on their existing plans, and employers will be able to include new provisions of Medicare in their existing plans. Additionally, Medicare will provide employers with 28 cents per dollar to allow them to continue providing drug coverage in their existing plans.
3. "Would the cost of my prescriptions be cheaper if the government were to set the prices?"
The changes in the Medicare plan will have an impact on the future cost of prescription drugs and will ultimately force down the costs of these drugs. Pharmacy benefit managers will negotiate for the best coverage on behalf of nearly 40 million Americans – and as a result of this process, seniors will save $18 billion more on prescription drugs than if the federal government intervened and essentially limited the choices available.
Not required to participate
Above all else, I cannot stress enough that participation in the new Medicare system is not mandatory. No one will be required to take part in this program.
Many Americans may very well be satisfied with the amount and quality of coverage they are currently receiving, either through their employer-sponsored plan or through other health coverage. And they do not have to change that. Participation in this plan is strictly voluntary.
There are many, many other Americans, however, who are not satisfied with the quality or scope of their coverage – and they are the ones this plan will benefit most.
In the weeks and months ahead, you will continue to hear and read more about the positive impact this plan will make on the lives of millions of Americans. If any of you have questions about the specifics of the new Medicare legislation, I would encourage you to contact my office, and my staff will do everything they can to provide you with the answers you are seeking.
Please call or write whenever we can be of service.
Congressman Jo Bonner is a Republican from Mobile. His offices may be reached by calling toll-free to 1-800-288-8721 or by e-mail at

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