TAXPAYER WATCHDOG GROUP ISSUES WARNING ON PRESCRIPTION DRUG PLAN | Citizens Against Government Waste

TAXPAYER WATCHDOG GROUP ISSUES WARNING ON PRESCRIPTION DRUG PLAN

Press Release

For Immediate ReleaseContact:  Jim Campi or Aaron Taylor
May 10, 2000(202) 467-5300

 

(WASHINGTON, D.C.) The Council for Citizens Against Government Waste (CCAGW) cautions seniors and taxpayers to be wary of the Medicare reform measure, particularly the prescription drug benefit, that was introduced today by the Democratic leadership.

“The Democratic leadership’s proposal does nothing to preserve Medicare for future retirees,” stated Thomas A. Schatz, president of CCAGW. “Medicare is already in financial trouble, but this plan will make it worse.  The drug benefit provides expensive mediocre coverage for all, high quality coverage for none.”

The Democratic plan is a “Siren’s Song,” luring seniors in with no deductible starting in 2002.  This offer will encourage a majority of seniors to leave their private plan, destroying private drug insurance. Once the private sector is eliminated, seniors will be at the mercy of politicians and federal bureaucrats for their drugs. But disaster strikes when the government pays only half of the cost of prescription drugs up to a cap of $5,000 in 2008.  After that, seniors would be on their own.

While the Democratic leaders say their plan offers “catastrophic coverage,” the bill provides few details on costs or operations.  Instead, it punts the program to the Secretary of Health and Human Services.  Congress and past administrations have been notoriously inaccurate in predicting the expense of taxpayer-funded programs.  In 1965, when Medicare was established, Congress anticipated that Medicare’s hospital insurance program would cost taxpayers $9 billion by 1990.  It totaled $67 billion that year.

“Of the 34 million senior citizens currently enrolled in Medicare, two-thirds have some sort of drug coverage, either through Medigap, an employer-sponsored retiree health plan, a Medicare managed care plan, or Medicaid.  Congress should concentrate on the one-third of seniors that do not have drug coverage, rather than design a new program with a new bureaucracy that will cost billions of dollars,” stated Schatz.

“Congress and the president should adopt proposals that will truly help more seniors get access to prescription drug coverage and save Medicare for future retirees,” stated Schatz.  A majority of the National Bipartisan Commission on the Future of Medicare agreed on a plan modeled after the successful Federal Employees Health Benefit Plan (FEHBP).  In addition, Medigap policies should be allowed to be far more creative and flexible in their design of benefits then they are today.  These two measures would do more to help seniors now, and in the future, than any government-run plan designed by President Clinton or the one that was introduced today,” concluded Schatz.

CCAGW is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, mismanagement and abuse in government.

 

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