Letter to Congress urges Congressional Action on Senior Issues Prior to Adjournment

Dear Representative/Senator:

On behalf of our 4.6 million members and supporters, the National Committee to Preserve Social Security and Medicare urges you to include issues important to seniors on the list of high priorities that will be addressed by the 109th Congress prior to adjournment.

As you know, from the time the Medicare Part D program went into effect in January 2006, many Medicare beneficiaries have faced difficulties in obtaining their prescription drugs because the program is complex and confusing. Today, many seniors who are enrolled in Part D are in or are facing a coverage gap. When beneficiaries fall into this so-called “doughnut hole”, they are responsible for the full cost of their prescription drugs plus they must continue paying their Part D premiums even though they are not receiving benefits.

In a matter of weeks, millions of seniors nationwide will begin the complicated and cumbersome process of selecting their prescription drug plans for next year. Many of the problems that plagued the program in its early days can be expected to resurface once this process begins – unless Congress acts now to make critical changes. To avoid subjecting millions of seniors once more to this ordeal, and to improve the Part D benefit for Medicare beneficiaries and increase federal funds available to assist elderly and disabled beneficiaries, I urge Congress at a minimum to enact the following proposals before adjourning:

• Allow seniors to receive prescription drugs directly from Medicare while requiring Medicare to negotiate the lowest prices for seniors, as is the case with the Veterans Administration. Providing a prescription drug benefit through the traditional Medicare program would reduce confusion for beneficiaries and offer them a plan with simple, cost-effective coverage and affordable drugs. The money saved by requiring the government to negotiate drug prices and by eliminating subsidies that now finance private insurance companies’ administration, marketing and profits could help close the doughnut hole in the current Medicare Part D prescription drug benefit. The federal government should be able to, and in fact should be required to, negotiate for the best possible prices on prescription drugs.
• Waive premiums for any month a senior is not receiving Medicare prescription drug coverage. Beneficiaries who fall into the “doughnut hole” should not have to pay premiums while they are not receiving any prescription drug coverage.
• Count all drug expenses incurred in the doughnut hole, not just expenses for drugs on a plan’s formulary and provided by an in-network pharmacy, toward the true out-of-pocket cost amount needed to reach catastrophic coverage.
• Liberalize the asset test so more people are eligible for extra help and not subject to the coverage gap. Almost 60 percent of the applicants who applied for extra help through the Social Security Administration have been found to be ineligible due to the asset test, even though they have very low incomes.
• Eliminate the lifetime penalty for seniors until this confusing plan is overhauled. Seniors who did not enroll in 2006, often because they had trouble getting information or received erroneous information, currently face a seven percent penalty if they enroll in the upcoming open enrollment period and begin receiving benefits in January 2007.
• Increase funding for the aging network to provide outreach counseling and education to Medicare beneficiaries and their caregivers to ensure that those who might be helped by Part D are enrolled in the best plan for them. This assistance becomes particularly important in the absence of a Medicare-offered prescription drug plan.

In addition to the above changes to Part D, there are a number of provisions of the Medicare Modernization Act (MMA) that we believe Congress should revisit. The most time sensitive is new income-based premium structure that will go into effect next year. Beginning on January 1st, 2007, millions of seniors will be required to pay increased premiums for their Medicare Part B coverage as a result of this little-known provision of the MMA. This form of means-testing Part B represents a dramatic change to the fundamental nature of this health insurance program and should be repealed.

The National Committee believes it is important to improve Medicare Part D to provide affordable, continuous prescription drug coverage for Medicare beneficiaries. We urge congressional action on this important issue and look forward to continuing to work with you to benefit our nation’s seniors.

Cordially,

Barbara B. Kennelly
President and CEO

The National Committee is a nonprofit, nonpartisan organization that acts in the interests of its membership through advocacy, education, services, grassroots efforts and the leadership of the board of directors and professional staff. The work of the National Committee is directed toward developing a secure retirement for all Americans.