Letter from AARP CEO Bill Novelli Urging Representatives and Senators to Vote in Favor of the Medicare Prescription Drug Legislation

Dear Representative or Senator:

AARP is asking you to vote in favor of the conference report on the Medicare Rx drug bill. We all know that this bill is not perfect; but on balance, it represents an important breakthrough in our nations’ commitment to strengthen health coverage for older Americans and for the boomer generation to follow.

Most important, the legislation will establish much-needed drug coverage in Medicare, especially for seniors who need it most: those with low incomes and those with very high drug costs. In addition, the bill will provide some modest relief for millions more who choose to enroll.

The legislation makes other improvements in Medicare, including a new chronic care benefit to help the sickest and highest cost beneficiaries. The sickest five percent of beneficiaries represent some 50 percent of Medicare spending; these steps will help these people and bring costs down. It also contains new preventive services, including a physical exam, cholesterol and lipid screening, and improved diabetes screening. The legislation also incorporates electronic prescribing of medication, which will prevent errors and save lives.

One critical concern is that the bill not harm those who currently have coverage through a former employer, particularly in view of the dramatic decline in employer-provided coverage over the past decade. The bill provides for substantial subsidies (expanded in the final agreement) to encourage employers to retain coverage.

The legislation also minimizes the potentially negative impact of the “premium support” competition model that could destabilize the program and lead to higher premiums for those who stay in traditional Medicare. We are convinced that the demonstrations scheduled for 2010-limited in scope, with lower income beneficiaries exempt, with protections against premium increases, and set to sunset after six years-will not undermine the integrity of Medicare.

The legislation also ensures that an Rx plan will be available to all beneficiaries regardless of where they live by providing a government fallback if two plans offering Rx coverage (one of which could be a PPO) are not available in an area.

The conferees recognized that all beneficiaries should be covered through the Medicare program, including “dual eligibles.” Continued recognition of the universality of the Medicare program is critical to its ongoing success.

The legislation restrains higher costs by helping to speed generics to market. While this is a step forward, a more comprehensive review of drug costs will be needed in the near future to reduce the rising cost of drugs.

AARP believes other aspects of the bill should also be improved in the future, including: a more adequate benefit package without a gap in coverage; no added premium based on income; and no assets test for the low income benefit. We also would have preferred that funds used for other measures in this bill had instead gone to improve the benefit package.

On balance, this bill is a good first step forward, and it is critically important that we make progress now in providing much needed drug coverage in Medicare. AARP believes this bill will provide a framework to improve the health security of older Americans, and we urge you to support its enactment.

Sincerely,

William D. Novelli