+---------------------------+-----+-----------------------------------+
| **BAD DEAL FOR SENIORS,   |     |                                   |
| BAD DEAL FOR MEDICARE**   |     |                                   |
|                           |     |                                   |
| ***SWEET DEAL FOR BIG     |     |                                   |
| DRUG COMPANIES***         |     |                                   |
+---------------------------+-----+-----------------------------------+
| **Keeps Drug Prices High  | ![  | Prohibits Medicare from           |
| and Drug Company CEOs     | ](m | negotiating better prices, and    |
| Smiling**                 | edi | blocks re-importation of drugs    |
|                           | a/i | from other countries at lower     |
|                           | mag | prices.                           |
|                           | e1. |                                   |
|                           | wmf |                                   |
|                           | ){w |                                   |
|                           | idt |                                   |
|                           | h=" |                                   |
|                           | 0.8 |                                   |
|                           | 090 |                                   |
|                           | 277 |                                   |
|                           | 777 |                                   |
|                           | 777 |                                   |
|                           | 778 |                                   |
|                           | in" |                                   |
|                           | hei |                                   |
|                           | ght |                                   |
|                           | ="0 |                                   |
|                           | .56 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 67i |                                   |
|                           | n"} |                                   |
+---------------------------+-----+-----------------------------------+
| **Causes 2 to 3 Million   | ![  | Creates incentives for employers  |
| Seniors to Lose Retiree   | ](m | to drop retiree coverage.         |
| Drug Coverage**           | edi |                                   |
|                           | a/i |                                   |
|                           | mag |                                   |
|                           | e1. |                                   |
|                           | wmf |                                   |
|                           | ){w |                                   |
|                           | idt |                                   |
|                           | h=" |                                   |
|                           | 0.8 |                                   |
|                           | 090 |                                   |
|                           | 277 |                                   |
|                           | 777 |                                   |
|                           | 777 |                                   |
|                           | 778 |                                   |
|                           | in" |                                   |
|                           | hei |                                   |
|                           | ght |                                   |
|                           | ="0 |                                   |
|                           | .56 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 67i |                                   |
|                           | n"} |                                   |
+---------------------------+-----+-----------------------------------+
| **Coerces Seniors Into    | ![  | Plan purports to be "voluntary"   |
| HMOs and Increases        | ](m | -- but forces millions of seniors |
| Medicare Premiums**       | edi | to pay more for Medicare if they  |
|                           | a/i | don't give up their doctor and    |
|                           | mag | join an HMO.                      |
|                           | e1. |                                   |
|                           | wmf |                                   |
|                           | ){w |                                   |
|                           | idt |                                   |
|                           | h=" |                                   |
|                           | 0.8 |                                   |
|                           | 090 |                                   |
|                           | 277 |                                   |
|                           | 777 |                                   |
|                           | 777 |                                   |
|                           | 778 |                                   |
|                           | in" |                                   |
|                           | hei |                                   |
|                           | ght |                                   |
|                           | ="0 |                                   |
|                           | .56 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 67i |                                   |
|                           | n"} |                                   |
+---------------------------+-----+-----------------------------------+
| **Forces Up to 6 Million  | ![  | Forces 6 million low-income       |
| Seniors to Pay More for   | ](m | seniors who get additional        |
| Medicine**                | edi | assistance from Medicaid to pay   |
|                           | a/i | more for their prescriptions;     |
|                           | mag | imposes an unfair assets test     |
|                           | e1. | that disqualifies seniors if they |
|                           | wmf | have modest savings.              |
|                           | ){w |                                   |
|                           | idt |                                   |
|                           | h=" |                                   |
|                           | 0.8 |                                   |
|                           | 090 |                                   |
|                           | 277 |                                   |
|                           | 777 |                                   |
|                           | 777 |                                   |
|                           | 778 |                                   |
|                           | in" |                                   |
|                           | hei |                                   |
|                           | ght |                                   |
|                           | ="0 |                                   |
|                           | .56 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 67i |                                   |
|                           | n"} |                                   |
+---------------------------+-----+-----------------------------------+
| ### **Huge Co             | #   | ### Even though the               |
| verage Gap Leaves Half of | ##  |  bill requires seniors to pay pre |
|  Seniors Without Coverage | ![] | miums year-round, its \$2,800 gap |
|  for Part of Every Year** | (me |  in coverage hurts the middle cla |
|                           | dia | ss and leaves many seniors withou |
|                           | /im | t coverage for part of the year.  |
|                           | age |                                   |
|                           | 1.w |                                   |
|                           | mf) |                                   |
|                           | {wi |                                   |
|                           | dth |                                   |
|                           | ="0 |                                   |
|                           | .80 |                                   |
|                           | 902 |                                   |
|                           | 777 |                                   |
|                           | 777 |                                   |
|                           | 777 |                                   |
|                           | 78i |                                   |
|                           | n"  |                                   |
|                           | hei |                                   |
|                           | ght |                                   |
|                           | ="0 |                                   |
|                           | .56 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 67i |                                   |
|                           | n"} |                                   |
+---------------------------+-----+-----------------------------------+
| ### **Takes \$6 Bi        | #   | ### Cre                           |
| llion Needed for Retiree  | ##  | ates new \$6 billion health savin |
| Coverage and Spends it on | ![] | gs accounts for the wealthy that  |
|  Tax Breaks for Wealthy** | (me | undermines employer coverage and  |
|                           | dia | adds to the number of uninsured.  |
|                           | /im |                                   |
|                           | age |                                   |
|                           | 1.w |                                   |
|                           | mf) |                                   |
|                           | {wi |                                   |
|                           | dth |                                   |
|                           | ="0 |                                   |
|                           | .80 |                                   |
|                           | 902 |                                   |
|                           | 777 |                                   |
|                           | 777 |                                   |
|                           | 777 |                                   |
|                           | 78i |                                   |
|                           | n"  |                                   |
|                           | hei |                                   |
|                           | ght |                                   |
|                           | ="0 |                                   |
|                           | .56 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 666 |                                   |
|                           | 67i |                                   |
|                           | n"} |                                   |
+---------------------------+-----+-----------------------------------+

Offices of the Democratic Leader, November 18, 2003

A BAD DEAL FOR SENIORS, A BAD DEAL FOR MEDICARE -- UPDATED 11/21/03

The Medicare prescription drug legislation emerging from the conference
caters to the drug industry, HMOs, and the insurance industry -- not
seniors and people with disabilities. It is a significant step backwards
from the Senate bill and in some respects is worse than the House-passed
bill. Under this bill, 2.7 million seniors would lose their retiree
prescription drug coverage; up to 6.4 million of the poorest Medicare
beneficiaries could get less drug coverage than they have now; and
millions of seniors could see their Medicare premiums rise if they
refuse to join an HMO. [This debate is no longer about adding a drug
benefit -- it's about saving Medicare]{.underline}.

**Keeps drug prices high.** The proposed plan bows to drug industry
pressure and prevents Medicare from negotiating better prices. It also
adopts a policy that will prevent access to lower-cost drugs available
in other countries, allowing drug companies profits to skyrocket at the
expense of patients.

**Raises Medicare premiums for those seniors who don't want to join an
HMO.** Under the guise of "competition," millions of Medicare
beneficiaries will be forced to pay more for Medicare if they don't give
up their doctor and join an HMO. As many as 7 million seniors could be
forced to participate.

**Forces up to 6.4 million low-income seniors to pay more for
medicines.** The plan prohibits Medicaid from filling in the gaps in the
new Medicare drug benefit, as Medicaid does now for other benefits, and
it increases co-payments relative to current law for some dual
eligibles. As a result, this bill could actually raise costs for up to
6.4 million low-income seniors and people with disabilities. In
addition, the plan institutes an unfair assets test that denies many
otherwise eligible low-income seniors extra help. It also leaves states
with a permanent fiscal burden that could lead to cuts in long-term care
and coverage for low-income families.

**Leaves millions of seniors without drug coverage for part of the
year.** Rather than providing continuous coverage, the Medicare benefit
has a \$2850 gap in coverage that will leave millions of seniors without
drug coverage for part of the year, even though they continue to pay
premiums. In addition, the proposal significantly weakens the so-called
"fallback," which will undermine rural beneficiaries' access to an
affordable Medicare drug benefit.

**Erodes retiree coverage for 2.7 million seniors.** Almost 3 million
seniors who have good drug coverage now through retiree health plans
could lose it under the proposed plan. This is because it discriminates
against seniors with such coverage. This debate was supposed to be about
expanding coverage, not taking it away.

**Coerces seniors into joining an HMO.** The proposed plan would grossly
overpay private HMOs and PPOs, using a \$17 billion slush fund to bribe
plans to participate. Better benefits and lower premiums would only be
available through private plans -- not currently an option for most
rural seniors. Worse, under this scheme, if HMOs *do* move into rural
areas, it will actually undermine the guaranteed coverage that exists
for rural beneficiaries today under Medicare. Seniors who have access to
HMOs will be forced to give up the choice of physician or their
preferred hospital to get better benefits -- some choice.

**Squanders \$6.7 billion needed for coverage on tax break for the
wealthy.** The proposed plan includes Health Security Accounts, which
are tax shelters for the wealthy. This creates an unprecedented tax
loophole that would undermine existing employer coverage and add to the
ever-growing number of uninsured. These funds should be used to prevent
employers from dropping coverage or to improve the drug benefit.

**Creates artificial Medicare funding crisis.** In the 11^th^ hour, a
new budget cap ("cost containment") policy has been added to the plan.
It would manufacture a crisis when an arbitrary cap on general revenue
funding is reached, which would trigger a fast-track process for
consideration of legislation to radically cut Medicare, including
benefit cuts, payment cuts for hospitals, nursing homes, and home health
providers, and increased cost-sharing.

> Prepared by the Democratic staff of the House Ways and Means and
> Energy and Commerce Committees, November 21, 2003