Durbin Offers "Medicare Drug Honest Pricing Act"

DURBIN OFFERS "MEDICARE DRUG HONEST PRICING ACT"

The complex Medicare drug benefit is shortchanging seniors while rewarding drug companies and it must be changed, U.S. Senator Dick Durbin said today. The Senator introduced legislation last week designed to protect seniors and people with disabilities from the fluctuating drug prices and formulary changes that threaten to wreak havoc on their budgets.

As the Medicare prescription drug benefit law is currently written, Medicare beneficiaries are locked into their Medicare Prescription Drug Plan (PDP) for one year. The PDPs, on the other hand, have the ability to change drug prices or formularies at any time. Seniors diligently compare plans and decide on the best plan for them, but they end up choosing a plan based on a momentary snapshot of drug prices. They should be able to count on the prices that guided their decision. If the plans refuse to lock in their prices and formularies, we need to give seniors a way out.

Durbin's legislation would require plans to stick by their original quotes unless the price decreases, so seniors, many of whom are on a fixed income, will not be hit with unexpected additional charges.

Durbin's bill, called the Medicare Drug Honest Pricing Act, will:

# Allow Medicare beneficiaries whose plan increases any drug price by more than 10% to choose a new plan.

# Allow Medicare beneficiaries whose PDP plan changes their formulary to choose a new plan. Seniors will have 60 days after they are notified by their plan of a formulary change to switch.

"Illinois seniors wanted a Medicare benefit that would lower their drug prices," Durbin said. "What they have today is a confusing benefit, a law that prohibits Medicare from negotiating with pharmaceutical companies and a plan that guarantees drug companies billions of dollars in profits. Medicare Part D is a reward for drug companies and a disaster for America's seniors."

"Many seniors are frustrated and angry. We need to change the benefit to make it fair, reliable and affordable," Durbin said. "I believe we can come together, on a bi-partisan basis, to make this program work for the seniors and the people with disabilities who are depending on it."

While drug companies and HMOs are guaranteed hundred of millions of dollars from the federal government, seniors are guaranteed a headache if they sign up for the wrong plan," Durbin said, pointing to recent comments by a leading academic expert on the industry who forecasted that drug companies will make as much as $40 billion over the next ten years in windfall profits.

Durbin has authored and co-sponsored a series of legislative proposals to improve the Medicare prescription drug benefit:

# Durbin has long supported providing the Department of Health and Human Services with the authority to negotiate for better prices from the pharmaceutical industry and to give seniors the opportunity to receive benefits directly from Medicare rather than through HMOs. A recent study found that drug prices offered by ten leading private drug plans under the Medicare drug program are more than 80 percent higher than the prices negotiated by the Veterans' Administration.

# He also supports legislation pending before Congress to ensure that seniors and people with disabilities immediately receive the drugs they need at prices they can afford under the terms of coverage they have been promised.

# The Senator also sponsored the Medicare Informed Choice Act Legislation, which will give seniors and people with disabilities the time they need to navigate the confusing enrollment process, extending the deadline to sign up for a plan until the end of 2006.

Even though Durbin has serious doubts about the structure and implementation of the new law, he urges Illinois seniors to enroll by the May 15 deadline to avoid the penalty that takes effect after that date.

"As we work to improve the Medicare drug benefit, I want to help Illinois' seniors deal with the existing program," Durbin said. "We need simplicity, efficiency, convenience and access. The private market has not provided that, it is time to let Medicare try."

Extensive information about the Medicare drug benefit is posted on Durbin's Web site: www.durbin.senate.gov.

http://durbin.senate.gov/record.cfm?id=251853&&