View Point

By Neil Abercrombie

Saturday, July 17, 1999

Medicare must pay for drugs

PRESIDENT Clinton recently touched on an issue of deep concern to senior citizens in Hawaii and throughout the nation when he proposed to strengthen Medicare. I support the president's initiative, chiefly because it includes prescription drug coverage in the Medicare program's benefits to senior citizens.

The subject of high prescription drug prices comes up over and over again when I listen to senior citizens. I've heard too many reports of seniors being forced to skip meals because their fixed incomes are strained by the high cost of drugs. No one should have to choose between putting food on the table and buying medicines prescribed by a doctor.

To discover the facts, I requested a survey of prescription drug prices in Hawaii's First Congressional District (Honolulu and Leeward suburbs). The study was conducted by my Honolulu office staff with help from Democratic staffers on the House Government Reform Committee. They surveyed pharmacies in the First District to find out what senior citizens are charged for prescription drugs. We then compared those prices to what "favored customers"-- government agencies, hospitals and health maintenance organizations -- pay for the same drugs.

The results were shocking. For the five drugs most commonly prescribed for older Americans, Hawaii seniors pay an average 123 percent markup over the prices charged to favored customers. We also found that drug manufacturers, not pharmacists and drug stores, appear to be benefitting most from the mark-ups. Finally, I learned that senior citizens in other parts of the country are subject to the same discriminatory pricing being practiced here in Hawaii.

I believe we need to approach this problem from two directions. First, I'm supporting President Clinton's proposal to include prescription drug benefits in the Medicare program. Under the president's plan, Medicare would cover half of drug costs up to $5,000 per year. The limit would be phased in gradually over the period from 2002 to 2008.

For the nearly 15 million Medicare beneficiaries who have absolutely no prescription drug coverage, it would provide badly needed financial relief. For the millions who rely on Medigap or Medicare managed care, it would ensure their coverage will always be there without excessive rate increases or benefit reductions.

HERE'S how the plan would work: Medicare beneficiaries would pay a "Part D"premium. It would start at $24 per month in 2002 and rise to $44 per month in 2008, when the coverage is fully implemented. Cost sharing protections for low-income participants would make prescription drug coverage available to all seniors, regardless of income. Beneficiaries with incomes less than 135 percent of the poverty level would pay no premiums.

As a second approach to the problem, we should look for ways to lower prescription drug prices for seniors. President Clinton's plan includes a provision to give Medicare beneficiaries access to discounts negotiated by private health plan managers. I would provide an extra measure of relief by requiring that drug companies that have supply contracts with the federal government give every senior citizen the same discount given to "preferred customers." That's why I'm a co-sponsor of H.R. 664, the Prescription Drug Fairness for Seniors Act of 1999.

That measure levels the playing field by extending the discount to older Americans. Combining Medicare prescription drug coverage with "preferred customer" discounts will mean affordable prices for senior citizens while holding down costs to the Medicare program.

It's time to get to work to strengthen Medicare for today's seniors and for the coming "senior boom" of the 21st century.

Neil Abercrombie represents the First District
(Honolulu and Leeward) in the U.S. House.

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