Washington - Today, with Representative Thaddeus G. McCotter’s (R-Livonia) support, Congress delivered on its promise and passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Today’s vote marks a critical preservation and expansion of the 38 year-old health care system.
“This bill is not perfect” bluntly stated McCotter, who was ironically born the year of Medicare's creation. “But it is a vital start in ensuring Medicare continues for our seniors, and survives for future generations of American seniors.”
The bill passed today provides Michigan’s senior residents an affordable and voluntary prescription drug benefit under Medicare. Immediate and significant savings between 15 and 25 percent will be available through a prescription drug discount card which will be made available within six months after President Bush signs the bill into law and is set to end in 2006. Seniors spend an average of $1,460 annually on prescription drugs and a 25 percent discount will save them $365 a year.
A guaranteed and voluntary benefit beginning in 2006 will give seniors the option to simply add drug coverage to traditional fee for service Medicare for a $35 monthly premium and a $250 annual deductible. Medicare will pay 75 percent of drug costs up to $2,250 and 95 percent of drug costs over $3,600 a year.
In addition, the bill establishes health saving accounts allowing individuals to set aside tax-free savings for lifetime health care needs and, for the first time ever, provides incentives to prevent employers from ending existing coverage due to rising health care costs.
McCotter voted in favor of the original House version of the bill but expressed concern over its ability to protect retirees’ existing health care coverage and eliminate home co-payments.
Since the June vote, McCotter has been reaching out to his constituents seeking their feedback and concerns regarding the prescription drug benefit and has worked with his colleagues in Congress to ensure their concerns were addressed in the final bill voted on by the House and Senate.
“Right now, more than 4 million retirees are being cheated out of their health care benefits by callous businesses bent on making a bigger buck,” said McCotter. “Congress could wait no longer. For the first time ever, this bill's employer coverage incentives will stem this trend and start protecting retirees' hard-earned benefits.”
Along with measures to expedite generic drug availability, implement preventative care and disease management programs and eliminate home care co-payments, highlights of today’s historic legislation include:
Protecting Retiree Drug Coverage
Ø Retirees have the option to decline the new Medicare drug benefit and remain in their current employer plan.
Ø Employers and unions able to prove their coverage is as generous as, or more generous than, the new Medicare drug benefit in Part D will qualify for the employer-sponsored coverage subsidy.
Ø The new federal subsidy will pay 28 percent of beneficiary’s drug costs between $250 and $5,000—up to $1,330 for each beneficiary and is excludable from taxation.
Ø Beneficiaries can enroll in Medicare Part D at a later date without a late enrollment penalty if their employer ever drops such coverage.
Health Savings Accounts (HSA’s)
Ø Establishes tax-advantaged HSA’s accounts to be used for medical expenses incurred by individuals, their spouse or their dependants.
Ø Contributions can be made by individuals, employers and family members and are portable from job-to-job.
Ø Savings can be used for qualified medical expenses, including retiree health insurance premiums, Medicare expenses, prescription drugs, long-term care services and insurance.
Ø Annual tax deductible contributions up to $2,500 for singles and $5,050 for families with a catch-up contribution of up to $1,000 for individuals 55 and older.
“Health saving accounts will benefit every generation of Americans,” said McCotter. “Given the rising cost of health care, people must—and now will—have power to immediately start saving for their future health care needs through these tax-free accounts.”