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Medicare Bill/Prescription Drug Coverage Beneficial For Alaska Seniors


November 26, 2003
Wednesday - 12:30 am

Saying that the Medicare bill provides good drug coverage for senior citizens, and solves several other major problems with health care in the state, Alaska Senators Lisa Murkowski and Ted Stevens on Tuesday expressed satisfaction that the Senate has approved the most significant reform in Medicare in 38 years.

"This is a positive step for Alaska's senior citizens, actually for all Alaskans. It should bring about real improvement in health care in Alaska," said Murkowski following the Senate's success in fighting off a Democrat led filibuster, overcoming several procedural obstacles and completing final passage of the Medicare reform bill on a 54 to 44 vote."

Murkowski said the bill's prescription drug benefit will help all of Alaska's 47,000 Medicare beneficiaries immediately by offering them a voluntary prescription drug discount card that should save them between 10 and 25 percent off the retail price of most drugs in 2004. Low income beneficiaries next year (those with incomes of less than $15,134 -- $20,439 for couples) will get a $600 a year subsidy in addition to the savings that will come from their new discount cards. She said that provision will provide Alaska's seniors with $10.5 million in assistance annually for the 8,800 low-income Alaskans expected to apply.

"This bill is what Alaska's seniors have been clamoring for," said Stevens. "The seniors in Alaska have great need for good health care, but very little access to it. With this bill we are able to provide savings on prescription drugs, access to doctors, and are able to keep Alaska's seniors in the State rather than having to send them to Seattle for treatment."

Beginning in 2006 when the plan is fully implemented, all Medicare recipients in Alaska who choose to do so will be eligible to obtain prescription drug coverage through a Medicare-approved plan. In exchange, seniors will have to pay a monthly premium of about $35 and they will receive drug reimbursements after a deductible is met. The plan is expected to save higher-income seniors about 50 percent of their current yearly drug costs, with the standard benefit paying 75 percent of drug costs up to $2,300 a year and then paying 95 percent of costs once a catastrophic limit of $5,044 is reached.

For low-income Alaskans, the plan is far more generous. The roughly 20,100 seniors in Alaska who are low income with few assets (below $15,134 in income, $20,439 for couples) will pay no premiums for their drug coverage and will have co-payments of up to $2 for generic drugs and up to $5 for name-brand drugs and have no gaps in coverage. Another nearly 3,000 seniors with higher incomes ($16,815 for individuals and $22,710 for couples) will qualify for reduced premiums, lower deductibles and coinsurance, and will face no gaps in coverage.

Given that about half of the State's senior citizens will qualify for the extra drug assistance, the plan overall is expected to pick up about 63 percent of the cost of prescription drugs for seniors in the state. It also will help the Alaska State government with its budget problems, as Medicare will assume the prescription drug costs of an estimated 12,350 low-income beneficiaries who are currently eligible to receive benefits under both Medicaid and Medicare. This provision is estimated to save the State of Alaska approximately $50 million in Medicaid costs over an eight-year period.

"Alaska's seniors and Alaska's disabled deserve a quality prescription drug plan, and this legislation takes important steps to provide that benefit. They deserve to be able to get prescription drug coverage without being forced to join an HMO. This bill does just that. It is designed to provide choice, not coercion. If seniors want to add prescription drug coverage to the Medicare plan they are in right now, they will have that option ­ their benefits will not be reduced or taken away. If seniors don't want the drug coverage, or if they are happy with the coverage they have now through their retirement plans, they won't have to accept the new voluntary Medicare benefit. The bottom line is that anyone who likes Medicare can keep it the way it is today because this is a purely voluntary program," said Murkowski.

The bill includes a number of incentives to ensure that employers, including the state's pension plan, don't drop current benefits ­ the biggest being that the plan provides a 28 percent subsidy to such plans to encourage companies to continue to provide medical benefits to retirees. The nearly $400 billion program over the next decade, will be a huge benefit to Alaska's elderly and disabled who choose to enroll. "These are not skimpy benefits," said Murkowski.

Murkowski and Stevens noted that the measure makes available for the first time new preventive health care benefits including a "Welcome to Medicare" physical, and screenings to detect heart disease and diabetes. Newly available private health plan options may offer even more preventive and disease management benefits. It provides additional aid for the chronic diseases of asthma and diabetes and will encourage disease management protocols to help seniors. Those benefits are entirely voluntary and will remain available to all seniors, including those in traditional Medicare.

The Medicare bill also contains three other provisions important to Alaska:

Alaska Physician Fee Fix: This is a solution to the problem of Alaska's seniors being unable to access physicians. Currently, since Medicare only covers about 37 percent of a physician's actual cost of treating an Alaska Medicare patient, some doctors are finding they can't afford to treat more Medicare patients in the state. In Anchorage alone there are an estimated 1,000 to 2,000 seniors who can't find doctors.

The bill dedicates $53 million over the next two years to substantially raise physician reimbursements. That is on top of another $8 million the current bill provides to prevent even greater (a proposed 4.4 percent) cuts in physician fees that were originally scheduled for this year.

"Some say Medicare is 'good the way it is.' But now it will be better, particularly for Alaskans who are being denied a choice of doctors, and in many cases the ability to see any doctor at all outside of an emergency room. This will raise physician reimbursements to reflect Alaska's significantly higher cost of medical care," said Murkowski.

Frontier Extended-Stay Clinics: The bill also includes a Murkowski/Stevens amendment creating Frontier Extended-Stay Clinics. This demonstration will allow rural clinics to be reimbursed for overnight stays when bad weather prevents medical evacuation or when the level of care necessary is already available in the community. Not only will this reduce the cost of expensive medivacs, but it will also allow Alaskans to stay in their home community to receive care when appropriate rather than being forced to fly, often alone, to major hospitals far from their homes.

Rural Pharmacy Access: The bill also includes a third provision authored by Murkowski to make prescriptions from pharmacies more accessible in rural areas.

Rural Hospital Aid: The bill also includes a number of provisions to help rural hospitals. Under the measure $25 billion is being allocated to help hospitals in affording the higher costs of care in rural areas nationwide. Under the bill, Alaska hospitals will gain $9.1 million to improve care around the state, and a number of community hospitals, such as those in Wrangell, Petersburg, Sitka, Seward, Valdez and Kodiak will gain both relief from rigid regulations and also a boost in payments.

The bill does not include controversial co-payments for home health care, prevents the imposition of fee caps for physical therapy for at least one year, and provides new preventive services such as cardiovascular screening, diabetes screening, and improved payments for mammography to detect breast cancers.

"The Delegation has worked very hard on this bill. This bill will finally deliver the promises made to Alaska's senior citizens in 1965 to help them get access to good health care. It also will expand the Medicare program to cover prescription drugs. Finally the Medicare program should provide seniors with the access to vital health care services they need and to the physician of their choice. While not perfect, this legislation is a positive step towards meeting the needs of Alaskans," said Murkowski.

Sources of News Release:

Office of Senator Lisa Murkowski
Web Site

Office of Senator Ted Stevens
Web Site


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