Remarks on Medicare Prescription Drug Benefit Legislation

The President Thank you very much. Thank you. I am on my way to North Carolina for another leg of our new markets tour to close the digital divide. But before I leave, I want to say a few words about an important study that Senator Daschle, Congressman Gephardt, and I have just been briefed on regarding the growing cost of prescription drugs and the burden these costs are placing on seniors and on disabled Americans.

The study is from Families USA. It is a careful and compelling piece of work. And I thank Families USA President Ron Pollack for providing it and for being here with us today.

For over a year now, I have been arguing that we as a nation ought to use this historic moment of strength and prosperity to meet our long-term challenges, especially the challenge of helping all our seniors afford prescription drugs that can lengthen and enrich their lives. More than three in five American seniors today lack affordable and dependable prescription drug coverage. Today's report shows that the burden on these seniors is getting worse.

According to the report, the price of the prescription drugs most often used by seniors has risen at double the rate of inflation for 6 years now, including this past year. The burden of these rapidly rising prices falls hardest on seniors who lack drug coverage because they don't receive the benefits of price discounts that most insurers negotiate. Indeed, the gap between drug prices for people with insurance versus those without insurance nearly doubled from 8 to 15 percent between 1996 and 1999. Seniors living on fixed incomes simply can't cope with these kinds of price increases forever. That's why we should take action to help them, and do it now.

In my budget, I propose a comprehensive plan to provide a prescription drug benefit that is optional, affordable, and accessible for all, a plan based on price competition, not price controls; a plan that will boost seniors' bargaining power to get the best prices possible; a plan that is part of an overall effort to strengthen and modernize Medicare so we will never have to ask our children to shoulder our burden when the baby boom generation retires.

I'm gratified to see growing bipartisan support for adding a prescription drug benefit to Medicare. But earlier this month leaders in the House put forth the outlines of a plan that has as a stated goal, providing access to affordable coverage for all seniors. It's good if we agree on the goal. Unfortunately, the plan they propose won't achieve the goal. Instead, it would subsidize insurance companies to offer prescription-drug-only policies for middle income seniors, for policies the insurance industry itself has already said it will not offer. And because the plan would provide direct premium support only to low income seniors and disabled Americans, it would do nothing for those seniors with modest middle class incomes between $15,000 and $50,000. Nearly half of all the Medicare beneficiaries who lack prescription drug coverage fall into this category. For them, rising drug prices are eating away at financial independence.

For example, according to this new report, a widow taking medication for diabetes, hypertension, and high cholesterol who lives on $16,700 a year must spend about $2,000 a year, or 14 percent of income, on these drugs. That's not unusual. And for a nation that cares about seniors, it's not acceptable. A person like that should be covered in our initiative.

The majority's plan also is a phantom as long as the leadership insists on moving forward with a budget resolution that would spend every dime of the surplus, and then some, over the next 10 years on tax cuts. If the irresponsible and unrealized—realistic spending cuts this budget calls for don't materialize, the tax cut will make it impossible to pay down the debt. It would leave nothing left for a prescription drug benefit. Any prescription drug plan that is not adequately financed is not available, in fact, is not affordable to all, and therefore, is not a real plan at all.

The balanced budget I have proposed would provide a voluntary benefit for all seniors, with plenty left over to pay down the debt, lengthen the life of Social Security and Medicare, and increase investments in education, as well as finance a responsible tax cut. It provides a prescription drug benefit that all seniors can afford in a way America can afford.

I'm encouraged by the progress we've made on this issue. Now both parties have come to support the idea of adding voluntary prescription drug benefits to Medicare. Both parties have agreed to the principle that the benefits should be available and affordable to all Americans. There's no reason we can't come to an agreement on the details of how to provide it. Fundamentally, again, as with so many of the things we deal with here in Washington, this should not be a Republican or a Democratic partisan issue. It should be an American issue.

I want to thank Senator Daschle and Representative Gephardt for their support and their leadership on this issue, and I'd like to ask them now to say a few words, beginning with our leader in the House, Mr. Gephardt.

[At this point, Representative Richard A. Gephardt and Senator Thomas A. Daschle made brief remarks.]

The President. Thank you very much. Before I close, I would just like to ask all of you to join me in expressing our appreciation to Ron Pollack and Families USA. They've been there on these issues year-in and year-out. I don't think they get as much acknowledgement as they deserve. But this is further evidence that the proposal we have is right for America, from a source that everybody can trust.

Thank you, Ron.