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Reforming and Modernizing Heath Care

"With the Medicare Act of 2003, our government is finally bringing prescription drug coverage to the seniors of America. With this law, we’re giving older Americans better choices and more control over their health care, so they can receive the modern medical care they deserve…. Our nation has made a promise, a solemn promise to America’s seniors. We have pledged to help our citizens find affordable medical care in the later years of life. Lyndon Johnson established that commitment by signing the Medicare Act of 1965. And today, by reforming and modernizing this vital program, we are honoring the commitments of Medicare to all our seniors."

- President George W. Bush, December 8, 2003

The Accomplishments

Reforming Medicare and Providing a Prescription Drug Benefit

  • For the first time in Medicare’s history, a prescription drug benefit will be offered to more than 40 million seniors and disabled Americans, and seniors will hold the power to choose the health care coverage that is best for them.
  • Millions of seniors already are getting real savings on their prescription drug expenses by using a Medicare-approved drug discount card. It includes a $600 annual subsidy for low-income Medicare beneficiaries as part of the transitional relief.
  • Beginning in 2006, seniors will be able to join Medicare-approved prescription drug plans or get prescription coverage through regular Medicare. Beneficiaries who now lack coverage will cut their yearly drug costs roughly in half.
  • The new Medicare law provides greater drug savings to seniors with low incomes, reducing costs to as little as $2 or $5 per prescription.
  • Medicare will now pick up 95 percent of the cost for beneficiaries with high out-of-pocket drug costs once they have spent $3,600 on their prescriptions.
  • To encourage employers to continue providing important drug benefits, the new Medicare law will subsidize employer-sponsored retiree benefits, beginning in 2006.
  • Beneficiaries who do not have employer-sponsored coverage can remain enrolled in the traditional Medicare program with or without the new Medicare-approved prescription drug plan or they can sign up for a private Medicare Advantage plan that includes prescription drug coverage. These private plans will compete for seniors’ business by providing better coverage at affordable prices through marketplace competition, not government price-setting.

Other Improvements in Medicare Coverage

  • Medicare’s coverage of preventive services is being expanded to include screenings for cardiovascular disease and diabetes beginning next year.
  • Everyone who enrolls in Medicare beginning next year will be covered for an initial physical examination.
  • For the first time, Medicare will offer disease management services that will help some beneficiaries with chronic medical conditions avoid dangerous and costly medical complications.

Establishing Health Savings Accounts

  • The Medicare legislation also created Health Savings Accounts (HSAs), tax-free savings accounts that can be used to pay for medical expenses and that will give millions of Americans access to affordable health coverage with more choices, more freedom, and more control over their health decisions.
  • HSAs will allow more Americans to save for health care needs and will allow more small businesses to help workers secure affordable health coverage.
Access to Needed Coverage and Care

  • President Bush signed the first-ever refundable health insurance tax credit for workers displaced by trade. The credit covers 65 percent of an eligible worker’s health premium for qualifying health insurance.
  • President Bush proposed an innovative $70.1 billion tax credit to make health insurance coverage affordable for millions of uninsured low-income and middle-income Americans.
  • Funding for health centers has been dramatically increased, as part of the President’s commitment to open or expand 1,200 health center sites to serve an additional 6.1 million people by 2006. Today there are more than 600 new or expanded health centers serving 3 million additional Americans. The populations these health centers serve include the uninsured, low-income individuals, migrant farm workers, and the homeless.
  • Eligibility for coverage has been extended to an estimated 2.6 million low-income Americans through Medicaid and the State Child Health Insurance Program (SCHIP).
Funding New Medical Research

  • The President doubled the budget for the National Institutes of Health (NIH).
Addressing Rising Health Care Costs and Improving Health Care Quality

  • President Bush proposed medical liability reform to reduce frivolous lawsuits that drive up costs, raise the cost of medical liability insurance, and reduce access to care.
  • The Bush Administration announced a new rule improving access to generic drugs and lowering prescription drug costs for millions of Americans. The final rule is expected to lead to at least $35 billion over 10 years in drug savings.
  • The President has called for greater adoption of electronic medical records, and set a goal that a majority of Americans have electronic medical records within a decade. Personal electronic medical records will help save lives, improve health care quality, and may reduce health care costs. The President proposed doubling, to $100 million, grants to test health information technologies.
  • In order to ensure that health professionals give patients the right drugs at the appropriate dosages, a regulation requiring bar codes on the labels of thousands of drugs and biological products has been implemented.