President Clinton Highlights New Analysis Supporting the Clinton Administration Prescription Drug Plan

Office of the Press Secretary

For Immediate Release March 13, 2000


Today at an event in Cleveland, Ohio, President Clinton will highlight new data documenting the financial burdens middle-income Medicare beneficiaries face in purchasing prescription drugs and accessing affordable insurance coverage for these lifesaving medications. The analysis being released today shows that: (1) middle-income beneficiaries without prescription drug coverage purchase 20 percent fewer drugs but pay about 75 percent more out-of-pocket than those with drug coverage; and (2) premiums for private Medigap insurance with drug coverage – mostly purchased by middle-class seniors – are extremely expensive and get more costly as beneficiaries age. These findings, combined with additional recent research, reveal the shortcomings of some narrowly-targeted proposals by some in the majority party that fail to cover middle-income seniors. The President today will renew his call for his own comprehensive reform plan that includes a voluntary drug benefit accessible to all Medicare beneficiaries.

LOW-INCOME BLOCK GRANT WOULD EXCLUDE MILLIONS OF SENIORS. Some Republicans propose to expand prescription drugs through a block grant to states to cover low-income seniors. While low-income Americans would certainly benefit from a prescription drug benefit, the data show that targeting only the low-income would leave millions of seniors without affordable, dependable coverage.

RELIANCE ON FLAWED PRIVATE MEDIGAP AND TAX APPROACHES LEAVE MAJOR GAPS IN COVERAGE. Others in Congress propose solving the prescription drug problem by expanding private Medigap insurance and through tax breaks rather than creating a voluntary Medicare prescription drug benefit. But such policies would disproportionately assist high-income seniors and would still leave millions of middle-income seniors without a dependable, affordable option. And because they do not promote group purchasing, these approaches cannot leverage price reductions for seniors.

PRESIDENT'S APPROACH ASSURES AFFORDABILITY AND ACCESS. President Clinton's FY 2001 budget includes a comprehensive plan that makes Medicare more competitive and efficient and dedicates part of the surplus to improve Medicare solvency and to add a long-overdue prescription drug benefit. Last week, the Congressional Budget Office (CBO) released an analysis of the President's plan that estimated its cost at about $150 billion over 10 years. This analysis confirms that the President's plan meets the principles, agreed to by all Senate Democrats, that a prescription drug benefit should be:

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