New Medicare Law Harms Almost Half A Million New Yorkers

Albany, N.Y. – A new report released today by the Institute for America’s Future shows that New York’s seniors and people with disabilities with very low incomes will be forced to pay much more for medication they desperately need because of the new Medicare prescription drug law passed by Congress and signed into law by President Bush. 

“This report shows what we knew all along,” said Roger Hickey, co-director of the Institute for America’s Future.  “The new Medicare law gives handouts to drug and insurance companies and sticks New York’s most vulnerable seniors and people with disabilities with higher costs than they pay today.”

“Today’s report shows that New York’s seniors and people with disabilities who have incomes below the federal poverty level will pay $85.9 million more for prescriptions over the first five years of the new Medicare law,” said Richard Kirsch, executive director of Citizen Action of New York.  Supporters of the new Medicare law have touted it as helpful to low-income seniors despite evidence to the contrary.  In his radio address on November 22, 2003, President Bush said that seniors with the highest drug bills would save the most on their prescriptions and seniors with the greatest need would get the most help. 

The report finds that New York’s seniors and people with disabilities whose incomes are below the federal poverty level will have to:
--Pay a higher co-payment for each prescription,
--Spend $3,600 out of their own pocket before getting full prescription coverage,
--Go through the process of joining a private insurance company drug plan,
--Hope that the drugs they need are on the restricted drug list of the plan they join, and
--Pay as much as 50 percent of their annual income on prescription drugs before they can get 100 percent coverage for the costs of their prescription drugs. 

When the new Medicare prescription drug law takes effect in 2006, New Yorkers eligible for both the federal Medicare and NYS Medicaid programs will pay higher co-payments for each prescription than they do under New York’s current law.  The new law forbids 455,000 New Yorkers on Medicare from getting prescription coverage under Medicaid starting January 2006.  If they do not enroll in a private prescription drug plan approved by Medicare, the federal government will automatically enroll them in a plan.

“The new Medicare law will actually cost the poorest individuals – those with incomes typically $6,650 or less annually – more out of their own pocket for medications than they currently pay,” said Joy Gould, RN and Health Care Project director for Citizen Action of New York.  An oft-cited benefit of the new Medicare law for the lowest-income New Yorkers is a waiver from co-payments once these individuals spend $3,600 out of their own pocket each year.  But in order to reach this out-of-pocket limit, those with the lowest incomes would have to spend more than half of their entire annual income on prescription drugs. 

In addition to paying higher costs, Medicare recipients on Medicaid will have no guarantee that they can get the prescriptions they need or that the private drug plan they choose will cover the particular drug they need.  Currently, New York’s Medicaid program covers all prescriptions that a doctor deems “medically necessary” and assures seniors and people with disabilities will get the prescriptions they need even if they can’t pay the small Medicaid co-payment.

But the new Medicare law requires all beneficiaries to pay the co-payment before they can get a prescription.  Private insurance companies offering the Medicare drug plans must cover two drugs per “therapeutic class” and each company can define those drug classes.  Prescription drugs that are not on the insurance company’s approved drug list are not covered.  If a New Yorker enrolled in the plan needs a medication not on the list, they are responsible for 100 percent of the cost.  The private prescription drug plans are also free to change the drugs they cover at any time and are only required to post the changes on the Internet when the change goes into effect.

"Congress and the president should take the same oath as doctors: ‘First, do no harm’.  Sadly, this new Medicare law does just the opposite – it will harm almost half a million of New York’s lowest-income seniors and people with disabilities by charging them more for their prescription drugs,” said Gould.  “It is time to repeal and replace the current Medicare law, which threatens the benefits seniors and people with disabilities already have.  We need a real prescription drug benefit that covers all drugs, for all seniors and people with disabilities, and allows Medicare to negotiate for the lowest prices.”

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 A complete copy of the report, Lowest-Income New Yorkers Will Pay $85.9 Million More for Prescriptions in First Five Years of the New Medicare Law, is available at http://www.ourfuture.org/docUploads/NY_report_2004_120304_112326.pdf [1].