A Reminder to Candidates: Prescription Drug Coverage for Seniors is Still an Issue

Not long ago, prescription drug coverage for seniors was the talk of the town. It dominated the candidates’ platforms in the 2000 presidential election and made headlines three years later when Congress passed a Medicare drug benefit.

Though it’s no longer headlining as a major issue for the 2004 elections, prescription drug coverage is still a key issue for America’s seniors.

Seniors are worried

Many seniors are concerned about the impact of Medicare drug benefits on their private healthcare benefits.

Millions of seniors get help paying for prescription drugs through retiree healthcare benefits provided by their former employers. Once the Medicare benefit takes effect in 2006, many of those employers are likely to drop prescription drug benefits from retirees’ healthcare packages.

The Department of Health and Human Services estimates that 3.8 million seniors will lose their employer-provided prescription drug benefits and have to switch to Medicare benefits, which may not provide as much coverage.

Although they are in favor of Medicare prescription drug coverage, many retirees begged Congress not to interfere with their retirement benefits.

Is it Congress’ fault?

Is it Congress’ fault that one-third of all retirees with employer-paid prescription drug coverage will lose that benefit in 2006?

Both Democrats and Republicans have worked to prevent employers from dropping their drug benefits. Lawmakers decided to spend $71 billion to help employers provide benefits from 2006-2013. A cash subsidy is available to all employers whose retiree drug benefits are worth more than the standard Medicare drug benefit.

These subsidies are Congress’ new solution to an ongoing problem; employers have been dropping retirees’ prescription drug benefits for the past decade.

Employers’ point of view

As the cost of healthcare and prescription drugs rises, employers are struggling to foot the bill. Many companies reason that Medicare will cover retirees, so company benefits are no longer necessary.

Employee healthcare benefits are a major cost for most companies, large or small. To stay competitive (especially with companies that are in countries that provide universal healthcare), employers must consider cutting healthcare costs.

Retirees’ point of view

Retirees don’t want to lose employer-provided prescription drug benefits because they are more comprehensive than the new Medicare benefits.

The Medicare benefit has a large gap in coverage -- known as the doughnut hole -- for those who do not qualify for low-income subsidies. Enrollees will pay a $250 deductible and then 25 percent of drug costs up to $2,250 a year. After that, they must spend $2,850 of their own money before receiving more help.

Employer-paid plans do not have this gap in coverage, so retirees (especially those with high drug costs) prefer their employer-provided drug coverage.

Prescription drugs still an issue

Despite lawmakers’ enormous efforts, seniors will still be struggling with prescription drug costs in 2006, when the Medicare benefit takes effect. So, it’s possible that the issue of prescription drug coverage for seniors will return to party platforms in 2008.

However, disappearing benefits are a problem for seniors (and for all of us) right now. Candidates should take note, because seniors vote.

Make your voice heard

Are you able to afford all of your healthcare costs? Does your employer provide healthcare and retirement benefits? Discuss these issues with other WomenMatter readers in one of our online forums.

Educate yourself on this issue. For more on new Medicare laws, click here. For a deeper discussion about healthcare in the United States, click here. Or, Browse our healthcare updates and find a topic that is of importance to you.

You can also sign up for an e alert, and we’ll keep you posted. Be sure to register to vote and to contact your representatives, because your voice matters.

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Posted on: 7/26/2004