What the Supporters
are Saying

The Medicare Prescription Drug, Improvement, and Modernization Act is a necessary first step toward alleviating rising costs of health care and prescription drugs in particular, especially for the nation's seniors. By re-establishing prescription drug coverage and opening Medicare to competition from private health insurers, this act became the most extensive revision to the program since Medicare was enacted in 1965.

Regardless of its shortfalls, this plan provides real savings for those who need it most, and does so immediately.
While opponents argue over the scope and clarity of the bill, supporters say that many of the seniors who have signed on to the drug card program are experiencing needed savings right now. A survey by the Consumers Union and California Health Care Foundation found that many of the Medicare discount cards are resulting in prices lower than Medi-Cal, California's health care program for the poor.

The plan offers increased options. Seniors who already have a drug discount card are free to continue using that card for better savings on some drugs, while getting a Medicare-approved card for savings on others.

New market forces and competition will drive drug costs down. While the government is not allowed to negotiate with pharmaceutical manufacturers, private health plans are, and will be able to get the best deals they can for Medicare beneficiaries. The new comprehensive database will further the ability of consumers to comparison shop, with the increased competition resulting in even lower prices.

What the Critics are Saying

The act poses new challenges for the elderly who must navigate the plan's often confusing benefits and options. A report released by a bipartisan group of pollsters shows that confusion and skepticism are running high among seniors. Findings from the Kaiser Family Foundation, which provides in-depth information on key health policy issues, found that 55 percent of total seniors had an unfavorable view of the new health care law. This number jumped to 73 percent when posed to seniors who were relatively familiar with the new bill.

The cost of the program has been estimated to be $395 billion over 10 years, according to the Congressional Budget Office. Many believe that the majority of this money will go to HMOs and pharmaceutical companies, which will benefit from both the increase in Medicare recipients choosing private health care providers as well as the lack of curbs on price setting (a policy advocated by some but rejected by Congress), respectively.

The law prohibits the government from negotiating with drug companies for lower-cost drugs. By comparison, the Department of Veteran Affairs negotiates prices by purchasing the top 10 drugs most widely prescribed to their constituents. Individuals who receive VA coverage will still pay less than beneficiaries of the new plan, even though all of those on Medicare represent a larger and more powerful block, able to negotiate even lower discount prices.

The discount drug cards offer nominal savings because the plan does not restrict drug companies from raising drug prices. The AARP, formerly the American Association of Retired Persons, which initially supported the act, released a study showing that drug prices rose at three times the rate of inflation in the first three months of this year, negating the card's discounts. Analysts have pointed out, though, that the study is misleading because all health care costs have been far outpacing inflation for years.

Although the act offers to subsidize plans that seniors currently have through past employers, the Congressional Budget Office estimates that the act will encourage businesses to drop up to 2.7 million retirees (8% of all seniors) from their current drug coverage plans.