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Why AARP Says "Yes" to the Medicare Prescription Drug Bill

By James G. Parkel, AARP President
(AARP's top volunteer leader)

While AARP has always been an independent, non-partisan advocacy group representing the interests of people over the age of 50, the popular perception is that we often side with the prevailing liberal view. That is why it may surprise many that we strongly support the centrist, bipartisan Medicare prescription drug legislation now before the full Congress. Our decision is not based on political calculation or allegiance to rigid ideology or favorite friends. And, in all candor, we wrestled with it long and hard before reaching a final decision. But, in the end, our support is based solely on what this will mean for our members and the health of all older Americans.

Every day, we receive letters and calls from our members recounting how the high cost of prescription drugs is hurting their financial and physical health. We believe that the legislation that has emerged after long negotiations will go a long way toward relieving these burdens for millions of older and disabled Americans and their families. Though far from perfect, the bill represents an historic breakthrough and an important milestone in the nation's commitment to strengthen and expand health security for current and future beneficiaries.

After careful deliberation, AARP has decided to endorse this bill and to work vigorously for its bipartisan passage. There are many reasons for this support.

First, it will provide prescription drug coverage at little cost to those who need it most: people with low incomes, including those who depend on Social Security for all or most of their income. Second, it will provide substantial relief for those with very high drug costs, and will provide modest relief for millions more. Finally, we are pleased to see a substantial increase in protections for retiree benefits and that fairness is maintained by upholding the health benefit protections of the Age Discrimination and Employment Act.

On July 14th, in a letter to Congressional leadership, we outlined our concerns and expectations for a bill that we could support. Among them was our opposition to what is commonly known as "premium support," a new structure requiring traditional Medicare to compete against private plans, which could very likely result in higher out of pocket costs for those who chose to stay in traditional Medicare. As a result of negotiations this was scaled back to be a demonstration, limited substantially in scope beginning in 2010 which exempts low income beneficiaries and limits any premium increases. This will not jeopardize traditional Medicare.

We also said that there must be a guaranteed drug plan available for all Medicare beneficiaries - regardless of where they live. This too has been accomplished. The government will step in to offer coverage in areas where there is not at least one private stand alone plan and one other PPO plan.

Of real concern to our members and millions of older and disabled Americans was the prospect that by gaining a Medicare benefit they might lose their current employer retiree coverage. We said that the final agreement should provide adequate incentives for employers to maintain their current plans. The proposed legislation includes an unprecedented $88 billion in subsidies to ensure that people who have good private coverage do not lose it.

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