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July 22, 1999

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"According to this report, 75% of older Americans lack decent, dependable, private-sector coverage of prescription drugs. That's three out of every four seniors. To those who think prescription drug coverage isn't a problem for most Medicare beneficiaries, I say, think again."

President Bill Clinton
July 22, 1999

Today, in Lansing, Michigan, President Clinton met with community members to discuss the future of the Medicare program. At the meeting, the President released a new report detailing the inadequate and unstable nature of prescription drug coverage currently available to Medicare beneficiaries. The President underscored the importance of seizing this historic opportunity to strengthen and modernize Medicare for the next quarter century.

New Report Shows the Need for a Medicare Prescription Drug Benefit. The President released a new report today entitled, Disturbing Truths and Dangerous Trends: The Facts About Medicare Beneficiaries and Prescription Drug Coverage. Key findings of the report include:

Three out of four Medicare beneficiaries lack decent, dependable, private-sector coverage of prescription drugs.

  • Only one-fourth of Medicare beneficiaries have retiree drug coverage, which is the only meaningful form of private coverage.
  • Over three-fourths of beneficiaries have no coverage, inadequate Medigap coverage, or public coverage for prescription drugs. At least one-third of Medicare beneficiaries have no drug coverage at all.

Private trends indicate a decline in coverage and affordability.

  • The number of firms offering retiree health coverage has declined by 25 percent in the last four years.
  • Medigap premiums for drugs are high and increase with age.

Public trends show that managed care benefits are being reduced, and Medicaid participation is low.

  • The value of Medicare managed care drug benefits is declining, due to a trend by plans to severely limit benefits through low caps.
  • Participation by those eligible for Medicaid remains low, raising serious questions about the advisability of using the Medicaid program to provide coverage for a population at higher income levels.

Millions of beneficiaries have no drug coverage.

  • At least 13 million Medicare beneficiaries have no prescription drug coverage.
  • More than half of Medicare beneficiaries without drug coverage are middle class. This means that if a plan is adopted that limits prescription drug coverage to below 150 percent of poverty, as some in Congress are proposing, the vast majority of the Medicare population will be left unprotected.

Prescription drug coverage makes sense.

  • Prescription drugs are an integral part of modern medicine, serving as complements to medical procedures, substitutes for surgery, and tools for managing chronic diseases.
  • Medicare beneficiaries are particularly reliant on prescription drugs. Not only do the elderly and people with disabilities have more health problems, but these problems tend to be the type that respond to drug therapy.
  • Studies have shown that being uninsured leads to inadequate use of necessary medications, which can result in increased costs and unnecessary institutionalization.

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