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Strengthening Medicare: A Framework to Modernize and Improve Medicare

Strengthening Medicare

President Bush Participates in a Meeting on Medicare Part D

"The lesson is, is that when you trust people to make decisions in their life, when you have competition it is likely you'll get lower price and better quality. It is the spirit of this reform that needs to be now extended to Medicare overall. The trustees report will be coming out today on Social Security and Medicare. It will make clear that senior citizens are in great shape when it comes to the government making their promises. It'll make clear that baby boomers, like me, are in good shape, that the government will meet its promises. But for a younger generation of Americans, it sends yet another warning signal to the United States Congress that now is the time to work to make sure the Social Security is solvent for the future, as is Medicare."

President George W. Bush
April 23, 2007

Read the full transcript here

Empowering Medicare Beneficiaries With Affordable Options

President Bush Has Modernized Medicare And Provided More Than 40 Million Americans With Better Access To Prescription Drugs

President Bush has helped Americans receive the health care they need at a price they can afford, while empowering beneficiaries to make their own decisions to best meet their health needs.The President proposed broad Medicare reforms, and Congress responded by passing the historic Medicare Prescription Drug, Improvement, and Modernization Act of 2003, which has provided the most significant reforms to the Medicare program in nearly 40 years – providing preventive care, offering Medicare beneficiaries market-based choices, and giving seniors and people with disabilities better access to the prescription drugs they need.

President Bush Reformed Medicare To Add A Prescription Drug Benefit, Give Beneficiaries More Private Plan Choices, And Add Preventive Services

These programs have been a great success for our Nation's Medicare beneficiaries. The Medicare prescription drug benefit has provided more than 40 million Americans – including nearly 10 million low-income beneficiaries – with better access to prescription drugs. More than 25 million are in the new Part D program, either through a stand-alone drug plan or through a Medicare Advantage drug plan, in which beneficiaries receive benefits through private health insurance. In addition, 6.7 million have Medicare-subsidized retiree coverage through their employer or union plan, while 7.5 million have other creditable drug coverage.

Nearly 10 million people, more than 20 percent of Medicare beneficiaries, are enrolled in Medicare Advantage and receive their comprehensive Medicare benefits through a private plan option. Beneficiary satisfaction rates in these plans are high, and most beneficiaries receive additional value, including reduced premiums, lower cost sharing, and extra benefits. Making this program stable and predictable was one of the President's goals, and as a result of the changes made in 2003, almost every county in America has a private plan choice, many with zero premiums

The President modernized Medicare to focus more on preventive care. Part of modern, effective health care is recognizing that if diseases are caught early, effective treatment is more likely, increasing the potential to reduce both cost and suffering. Every beneficiary entering Medicare who elects Part B is now eligible for a "Welcome to Medicare" exam within the first twelve months of coverage. Medicare is now covering cardiovascular blood screenings, diabetes screening, ultrasound screenings for aneurysms, and smoking cessation counseling that can catch illnesses like diabetes and heart disease.

Prescription drug coverage helps beneficiaries in four important ways:

  1. Medicare drug coverage helps all beneficiaries pay for prescription drugs, no matter how they paid before.The average value of the standard Part D benefit in 2008 was roughly $1,100. Private employers receive incentives to continue to provide drug coverage to their retirees.

  2. Medicare drug coverage offers many choices for beneficiaries. Beneficiaries can choose from a number of private plans to find the one that best serves them – and plan providers are competing for beneficiaries' business. That means beneficiaries can save more and get the coverage they want.

  3. Beneficiaries who have the highest drug costs receive extra help. Beneficiaries with the standard benefit who enter the coverage gap will already have received an average benefit value totaling about $1,700 in 2008 because of Part D benefit. The coverage gap is the temporary limit on what most plans will cover for prescription drugs. For those with very high costs, Medicare will pick up as much as 95 percent of all prescription costs, for example, once they spend $4,050 of their own money in 2008.

  4. Medicare is providing extra help to low-income beneficiaries. In 2008, approximately 38 percent of beneficiaries enrolled in a prescription drug plan or Medicare Advantage prescription drug plan are receiving prescription drug coverage that includes little or no premiums, low deductibles, and no gaps in coverage. On average, Medicare will pay for more than 95 percent of the costs of prescription drugs for low-income beneficiaries.

In April 2008, the Department of Defense announced the creation of the Armed Forces Institute for Regenerative Medicine (AFIRM), a new partnership among the Federal government, universities, and private companies. Regenerative medicine is a promising new field focused on the repair and replacement of tissues and organs, which has been made possible in part by progress in stem cell research. The Center’s goal is to take ethical stem cell-based innovations out of the lab and make them a life-improving reality for our wounded warriors and other Americans.

Competition Is Helping To Reduce Medical Costs For Consumers And Taxpayer

Private sector competition has resulted in more innovation and flexibility in coverage. Under President Bush's Medicare Part D policy, private health plans compete by providing better coverage at affordable prices – helping to control the costs of Medicare by marketplace competition, not government price-setting.

  • The estimated costs of this program to taxpayers have declined nearly 38 percent since enactment. Costs to taxpayers are projected to be about $240 billion lower than originally estimated for 2004-2013. From 2006 to 2013, States are expected to spend about $25 billion less than originally projected.

  • In addition to the government savings, beneficiaries are also spending less than originally estimated. The average premium that beneficiaries paid for a standard prescription drug benefit in 2008 was roughly $25 per month, nearly 40 percent lower than original estimates.

Beneficiaries Are Satisfied With Medicare Prescription Drug Coverage

Overall satisfaction is very high. Public opinion surveys in 2007 indicate satisfaction rates of over 85 percent.

  • 87 percent – Wall Street Journal/Harris Interactive (December 2007)
  • 86 percent – VCR Research/Medicare Rx Education Network (November 2007)
  • 89 percent – KRC for Medicare Today (October 2007)

According to the 2008 Medicare Today Survey:

  • 80 percent said that their plan covers all medicines.
  • 84 percent indicated that their total out-of-pocket costs are reasonable.
  • 95 percent responded that their plan was convenient to use.
  • 86 percent said that their co-payments and premiums were affordable.

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