By Patty Gaul, Director of Legislative Affairs, TREA Senior Citizens League

Congress is engaged in a historic debate over whether our government should encourage greater competition in the health care market place to hold down health care costs and at what point the government should step in to guarantee coverage to Medicare beneficiaries.  The prescription drug bills passed by the Senate and House have been criticized by those who say they do not provide enough coverage, and others who fear the government can’t afford to provide the benefit because it will bankrupt Medicare.

In recent years, millions of seniors flocked into Health Maintenance Organizations (HMOs)—considered a good deal because they often offered lower out-of-pocket costs and provided prescription drug benefits.  In recent years, however, millions of seniors also were left scrambling to shop for a new health plan when their plans dropped coverage because providing care proved unprofitable.  

While millions of seniors lost their HMOs, none of them ever lost their Medicare coverage.  They continued to retain coverage under traditional fee-for-service Medicare.  Many seniors living in rural areas in particular do not have access to managed care health plans.  In like manner, TSCL believes federally guaranteed “fall back” plans are a crucial protection to every Medicare recipient to ensure access to affordable prescription drugs. 

Even under traditional Medicare with a government “fall back” plan, TSCL remains concerned that seniors may not be able to find a “prescription drug insurance only” policy.  “Drug only” coverage doesn’t currently exist in the market place, and it appears that the insurance industry has doubts whether such coverage could be offered.  In the past, Congress has created insurance options that insurers later failed to offer to consumers.  Under the 1997 Balanced Budget Act, for example, Medicare Medical Savings Accounts were created, and not one single insurance company stepped forward to provide that product.  Despite that fact, the House drug bill again attempts to provide that type of coverage in addition to other options.

A federally guaranteed “fall back” plan is a critical protection to every Medicare beneficiary, and so is a simple workable drug plan that will actually be offered by insurers.  We urge you to stay in contact with your Members of Congress to ensure that Medicare prescription drug legislation will really help seniors and provide savings.

September 2003