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Welcome to "Ask the White House" -- an online interactive forum where you can submit questions to Administration officials and friends of the White House. Visit the "Ask the White House" archives to read other discussions with White House officials.

Expanding Access to Health Care

Doug Badger

Doug Badger
Senior Health Policy Advisor
May 26, 2004

Doug Badger
Thanks for joining us on, "Ask the White House." I'm looking forward to your questions, so fire away!

Jason, from Washington DC writes:
Mr. Badger, Thanks for taking my question. Rising health care costs continue to plague the national business community as annual double digit health increases are not uncommon. President Bush and Secretary Chao have continued to push for Association Health Plans (AHPs) as part of a federal solution although the effort has been stymied in the Senate. While predictably most of the opposition is from Democrats, some prominent Republicans including your former boss strongly oppose AHPs. Can you explain why?

Doug Badger
Thanks for your question, Jason.

President Bush is concerned about the rising cost of health care and its effect on individuals, families and businesses that are struggling to provide benefits to their workers. He has proposed a variety of ways to make health care more affordable, including a major expansion of federal funding for community health centers that provide care to people in medically underserved areas, refundable tax credits for low-income workers, more flexibility in Medicaid to make more low-income people eligible for the program, and a prescription drug benefit that is already cutting prescription drug prices for seniors who are finding it harder and harder to afford their medicines.

The President is especially concerned about smaller businesses that have a tough time finding affordable coverage for their workers. That’s why he’s a big supporter of association health plans (AHPs), which would allow small businesses to band together in purchasing coverage. AHPs will give small businesses the increased efficiencies and regulatory relief that larger firms enjoy. The House passed AHP legislation earlier this month, and we will work to get the Senate to follow suit.

Bill, from Maryland writes:
The radpid rise in the price of drugs, inanticipation of "discounts", has already made us all worse off than we were before the new Medicare legislation. And drugs are available from web sites at lower prices than in the welter of confusing drug cards offered. Add to this the cost of the card. How is this a saving to seniors?

Doug Badger
Hey, Bill! Thanks for your question.

The Medicare prescription drug discount cards can provide real relief for seniors from the high cost of medicines. These costs are causing real hardships for millions of Medicare beneficiaries. That's why President Bush worked with Congress to add prescription drug coverage to the Medicare program.

While the new benefit won.t take effect for another 18 months, you can start saving now on your prescriptions by signing up for a Medicare-approved prescription drug discount card. These cards are beating retail pharmacy prices by 16 to 30 percent on most brand name medicines and 30 to 60 percent on most generic drugs. And you can save even more by using your card to buy through the mail rather than through a local pharmacy.

The prices available through the cards are beating those of the big online discounters and, unlike those discounters, you can use the card at your neighborhood drug store, where you can get advice from a licensed pharmacist.

I hope you'll check out our prices by logging on to or by calling 1-800-MEDICARE. Many people are finding that these cards pay back their $30 annual fee in the first month. And some of the cards are free.

Bill, from Sacramento writes:
Mr. Badger, Why can one get up to 70 savings on Drugs at Costco Pharmacy while the drug card is offering a possible 5 savings?

Why are the card providers able to raise prices after one has selected a card?

Doug Badger
Hello, Bill. How are things in Sacramento today? It’s hot and muggy here in DC.

Have you checked our website lately ( If you do, I think you’ll find that the new Medicare prescription drug discount cards are offering much better prices than the big online discount sellers, such as the one you mention. In fact, I checked the prices of 10 drugs just last Friday on two of those websites and compared them with the prices of Medicare prescription drug cards. The result: 16 Medicare cards offered better prices for those 10 drugs than did the two big online sellers. And the savings were substantial – as much as $200 for a 30-day supply. That’s through the mail order. What’s even more surprising is that the Medicare cards are offering lower prices AT YOUR LOCAL PHARMACY than the big online discounters are offering through the mail.

The discounts available through these cards are impressive – 16 to 30 percent off the retail price of most brand name drugs and 30 to 60 percent savings on generics, with deeper discounts available through the mail.

You should visit our website or call 1-800-MEDICARE and find out about these great savings!

Jeff, from Grand Junction, Colorado writes:
Why does the president promise seniors major savings from Medicare drug cards when he knows there is no GUARANTEE OF ANY SAVINGS? I am an insurance salesman and this is important. Further, why did the president not explain his PROPOSED CUTS to health care in his speech yesterday? Jeff Evans

Doug Badger
Hey, Jeff. My Dad was a life insurance salesman. I know that you guys work hard and help people get the coverage they need. Keep up the good work!

The savings that seniors are getting through these drug cards are substantial. If you visit our website ( and compare their prices to what you might pay for drugs at your local pharmacy without the discount card and even to prices available through the major online discounters, I think you’ll see that seniors will finally be getting some needed relief from the high price of medicine.

The savings are coming through price transparency (the ability to compare prices available through the drug discount cards for thousands of drugs at tens of thousands of pharmacies) and competition. For the first time, seniors can get the benefit of group discounts by signing up for one of these Medicare-approved cards. And low-income seniors will get, in addition to discounts, $600 this year and another $600 next January to help them pay for the drugs at discounted prices. We’re also working with major manufacturers to provide their drugs free of charge or at nominal rates to seniors who spend down the entire $600.

If you take a look at the budget the President proposed in February, I think you’ll see that he’s asked for ADDITIONAL health care spending, on top of the biggest expansion of Medicare in the program’s 40-year history. Some of the highlights: $70 billion in refundable tax credits to help low-income workers buy health insurance; a big boost in funding for community health centers to serve more people; doubling the funding for grants to encourage health information technology, which can improve quality, reduce medical errors and save money; and a new tax deduction for major medical insurance, which will help people whose employers don’t provide health care to afford coverage for themselves and their families.

John, from Portland, OR writes:
Why does the Bush healthcare plan for bid the government to negotiate better drug prices for persons covered under the plan? I thought Republicans were in favor of competition and its effect on prices.

Doug Badger
John, you’ve got it exactly right! The President favors competition, price transparency and consumer empowerment. Price competition works for most things we buy and it can work for health care as well.

Look at prescription drug prices. For years, these prices were a mystery. People with insurance were paying one price, people who had some sort of discounts paid another, and Medicare beneficiaries who didn’t have coverage paid the highest prices of all.

This year, as part of the Medicare law that the President signed in December, the Department of Health and Human Services invited tons of private entities to compete for who could offer seniors the best prices. Insurers submitted bids to get into the program. And so did drugstores and pharmacy benefit managers and groups like AARP. Dozens of companies got into the act. Winning bidders got to sponsor Medicare-approved prescription drug discount cards.

But there was a catch. In order to be a card sponsor, you had to tell us the prices that seniors would pay for each drug at each participating pharmacy, as well as through the mail. And we posted these prices on

For the first time we shone the light on prescription drug prices. And guess what happened? The prices were low during the first week, but they have been coming down ever since, because consumers can find out easily who is giving them the best deal.

Competition, transparent prices and consumer empowerment are making prescription drugs more affordable for millions of seniors.

Cindy, from Greeley, Colorado writes:
Why is the White House cutting much needed Medicaid and Medicare funding?

My mother-in-law lives on an extremely fixed budget (she makes only 650 a month on Social Security and - at age 80 - has to work a part time job to make ends meet). She has no assets, yet she pays an astronomical amount in co-payments and premiums for needed medical care with no provision for helping her pay for her medications. (None of which are covered under the discount card farce recently enacted by the Bush Administration...)

Wouldn't means testing be a more fair method of cutting costs than simply cutting across the board?

Doug Badger
Cindy, there are lots of people like your Mom who are struggling to make ends meet, which is why the President pushed so hard to make it easier to afford her medicines.

While I don’t know the details of your Mom’s financial situation, it sounds like she might qualify for a program under Medicaid known as “Qualified Medicare Beneficiary” (QMB) or perhaps “Select Low-Income Beneficiary” (SLMB). Under these programs, the government will pay your Mom’s monthly Medicare premium and, in some cases, her deductibles and co-payments. Millions of people who are qualified to receive help under this program never sign up because they don’t know about it. I would contact your local Social Security office and find out whether your Mom might qualify. No guarantees, but it’s sure worth a try.

You should also look into the new prescription drug discount program (1-800-MEDICARE or and find out how much your Mom can save on her prescription medicines. If she qualifies for help with her Medicare premiums and co-payments, she also certainly will also qualify for a $600 credit this year and another $600 next year to help pay for her medicines at the discounted prices.

Sandra, from Klamath Falls, Oregon writes:
Why don't you have one card under Medicare? Why make it so complicated? Only to help your big contributors, Drug an Insurance companies. I know you wont read all this but at least I've given my opinion.

Doug Badger
Hey, Sandra! Why don’t we have only one Medicare-approved prescription drug discount card?!? Why don’t we have only one supermarket chain? Or only one car manufacturer? Because having people compete to give you the best prices is the best way ever devised to make sure you get the most for your money.

That’s just what’s happening on Medicare. I invite you to visit our website ( or call our toll-free number (1-800-MEDICARE). I think you’ll find that these cards are offering real savings on prescription medicines.

Susan, from Poulsbo, WA writes:
Mr. Badger, I am concerned about the cost of drugs for my 90 year old parents. Why did the president tell seniors that they would receive major savings through the medicare drug cards when he knew they would not.

Doug Badger
Another question from the Pacific Northwest. You must be the computer capital of the world.

Susan, millions of people like your parents are struggling to pay for their prescription drugs. After years of Washington talk about doing something to help people, President Bush delivered on his promise to provide a drug benefit to Medicare beneficiaries. I know a lot of people think this new program is confusing because they have to call a toll-free number (1-800-MEDICARE) or visit a website ( to find out which card offers them the best deal and how much they can save.

I’ve been reading a lot of articles about people being confused. In fact, I have one right here with a headline that says, “Medicare ‘Bug.’” It’s about how confused seniors are about the new Medicare benefit and how millions hadn’t signed up. But guess what? The article is dated August 31, 1966 … 38 years ago when the Medicare program first started.

Yep. Medicare was considered a very confusing program back then, and in many ways, it still is. But it may be the most important benefit seniors have ever gotten … even more important, in some ways, than Social Security.

I want to encourage you to look into how this new Medicare prescription drug discount card program might help your elderly parents. It’s sure worth a look.

Kelly, from Dallas, Texas writes:
Why is the president telling people his new health savings account proposal will save money, when studies show these plans will drive up deductibles for average workers and could cause more than one million people to lose their existing health coverage?

Doug Badger
Hi, Kelly. Thanks for writing.

And thanks much for asking about health savings accounts (HSAs), an exciting new product that will make health insurance and health care more affordable for millions of individuals and businesses, large and small. I don’t know what study you’re referring to, but every study I’ve seen (except one, and that one talks about a very slight negative effect on the uninsurance rate, far less than one million) says that this will help more people afford coverage.

Let me tell you how they work. Let’s say that your employer provides you with a policy that covers most of your routine medical expenses. That policy might cost about $6,000 per year for a typical family. Your employer will send $5,000 off to the insurance company and will deduct $1,000 from your paycheck over the course of the year.

With a new Health Savings Account, your employer will buy you a policy that covers major medical expenses – like a hospitalization, a pregnancy or an operation – but does not cover routine medical costs. A policy like this might require you to pay the first $2,000 in medical expenses every year.

The premium for this kind of coverage will be much less than for the policy that you now have. Instead of $6,000, the policy might cost only $4,000. So you and your employer will save money on your coverage. But what happens to these savings?

Instead of sending that money off to an insurance company, the money that you and your employer save can go into your Health Savings Account. That account is yours to keep. It doesn’t belong to the insurance company or your employer. It belongs to you. It’s there to help you pay for doctor visits, medicines and other routine health care needs that your new insurance policy won’t cover. Since your policy will require you to pay for the first $2,000 of your annual medical expenses, you will use the account to pay for these services. Once you’ve spent that $2,000 in any year, your insurance coverage will pay for your additional medical bills.

Basically, your health savings account will pay for your routine health expenses – like doctor visits and prescriptions -- and your insurance will cover any medical bills above your deductible.

But what if you don’t spend that $2,000? In that case, the money remains in your account. It’s yours to keep. It does not expire at the end of the year. The interest you earn on that money is tax-free. The following year, you and your employer can put another $2,000 into the account.

You will not pay taxes on any money that you or your employer put into your Health Savings Account. So long as you use the account to pay for your family’s medical care, you will not pay taxes on any withdrawals. And interest that you earn on money that is in the account also is tax-free.

Your Health Savings Accounts is fully portable, just like a 401(k) retirement account. It belongs to you, not to your employer or to an insurance company. When you change jobs, you take your account with you. And if you have a period of time between jobs, you can use your account to pay your medical bills.

There are limits on how much you and your employer can put into your account in any year. Together you can deposit the full amount of your insurance policy’s deductible up to $2,600 for an individual or $5,150 for a family.

But there is no limit on how big your account can grow. The money you keep in the account will grow over the years tax-free. You can save it for future medical needs, including your medical needs after you retire, like long-term care costs. You can also use your account to pay for things that your insurance doesn’t cover, like contact lenses, over-the-counter medicines and braces for your children.

Health Savings Accounts aren’t for everybody. Many people are happy with the coverage they now have and want to keep it. But for millions of Americans who are struggling to keep up with rising health costs, HSAs might be the right prescription.

eric, from evans writes:
How will his agenda help me, an average American who has no health care.

I work but make too much money to be classified as poor, but cannot afford healthcare.

Doug, I respect and do my best to understand our policies, but to the average working class person, we still work from Friday to Friday robbing Paul to pay Peter but cannot under our current wage be classified as poor.

When will it be our turn to receive help?

Doug Badger
Thanks for writing, Eric. I know that many millions of people have the same struggles and concerns.

The President is doing all he can to help working people get health coverage they can afford. One product you might think about is the health savings accounts that I described in my response to a question from Kelly of Dallas, TX. These products are available to people who don’t get coverage through their employers, as well as to those who do. Major medical insurance – policies that cover your big expenses but not routine care – is generally much more affordable than standard insurance coverage. And a Health Savings Account (HSA) lets you set aside money to pay for the routine care.

The President also is urging Congress to provide assistance to families to purchase health care. This assistance would be greatest for families with earnings of $25,000 or less, but every family with income of under $60,000 would get some help with their health insurance costs.

Toni, from Boulder, CO writes:
How does the president plan to expand access to health care to those with low incomes?

Doug Badger
Thanks for writing, Toni.

How are things in Boulder?

The President has a multi-faceted plan to help low-income people get access to medical care. First, he has greatly expanded funding for community health centers, which provide primary care to people whether or not they have insurance.

The President's budgets are on track to fulfill his promise to open or expand 1,200 Community Health Centers to serve an additional 6.1 million Americans by 2006. The President's budget for FY 2005 continues to fulfill this promise with a request of $1.8 billion for Community Health Centers -- a 57% increase since 2001 -- enabling the program to serve an additional 1.6 million individuals and open or expand over 330 more health centers.

The Department of Health and Human Services also has approved a variety of innovative state efforts to make more people eligible for coverage under Medicaid and the State Child Health Insurance Program (SCHIP). Since taking office, these waivers and state plan amendments have made an additional 2.6 million low-income people eligible for coverage under these programs.

For people whose earnings are too high to allow them to qualify for Medicaid but who can’t afford coverage, the President has asked Congress to provide subsidies of up to $1,000 for individuals and $3,000 for families to help them buy health care.

Cliff, from Brimfield Ohio writes:
Mr. Badger:Just saw the President in Youngstown Ohio speaking on Health Care. These centers will provide service regardless of ability to pay. With an increase of 30 in number of people being served with an additional hundred or so new centers to be added in the next year. What is going to keep employers who's bottom line is suffering. To just consider letting these

Health Care Centers provide the needed medical services of their employees and not need to address the issues within the company itself? I would think the cashed strapped States in the area of medical need would make use of these types of Centers, funded by the Federal Government. Thank You

Doug Badger
Hi, Cliff! Glad you were able to make yesterday’s Presidential event.

Community health centers are a really important part of helping Americans get access to needed care, and I know that the President spoke yesterday about what he’s done to provide more funding for these important centers.

  • These health centers are located in medically underserved urban and rural areas where there is little access to basic health care services, and primarily serve low-income individuals, migrant farm workers, homeless individuals, and children. Achieving the President's goal for new and expanded Community Health Center sites will help to provide health care to a greater number of Americans.
  • Since 2001, the Bush Administration has increased the number of people served in health centers by almost 30%. When the President took office, there were approximately 3,300 health center sites serving approximately 9.6 million patients, including 4 million uninsured individuals. President Bush recognized the needs of the uninsured and medically underserved communities and promised to open or expand 1,200 health center sites to serve an additional 6.1 million Americans by 2006.
  • By the end of March 2004, the Department of Health and Human Services (HHS) will have opened or expanded 614 health center sites.
  • The FY 2005 budget proposes an increase of $218 million, to open or expand 330 more health center sites to serve an additional 1.6 million people, leaving approximately 260 more community health center sites to add or expand to meet the President's goal by 2006.

Erica, from Fairfax, VA writes:
Both my parents are elderly and spend a lot each month for medications. They have medicare and a secondary insurance but it still adds up to a lot for prescription drugs. What is the Administration doing to help with the rising cost of prescription drugs for senior citizens like my parents? Is there anything availible now that will help them with these costs?

Thank You :o)

Doug Badger
Thanks for writing, Erica!

The President is working really hard to help folks like your parents afford their medicines. He knows that many seniors are cutting their pills in half and doing without other necessities because they can’t keep up with their medical bills. That is why the President made sure to keep his promise of providing prescription drugs through Medicare.

The first step along the way, which takes effect next Tuesday (June 1) is the prescription drug discount program. With a Medicare-approved drug discount card, your parents can start saving right away both on brand name and generic medications. These cards are cutting 16 to 30 percent off the retail price of most brand name drugs and 30 to 60 percent off generics. Even better prices are available if your parents use their card to buy medicines through the mail.

To find out more, visit, or call 1-800-MEDICARE.

Doug Badger
Thanks much for all of your questions! Have a great day!