Guest Column: New Medicare plan is step in right direction

Jim Martin is president of the 60 Plus Association, a nationwide senior citizens advocacy group.

Almost 40 years after the creaky Medicare system we know today was created as part of Lyndon Johnson's "Great Society," the time for talk about improving the system is finally over and action has begun.

The action comes courtesy of the new Medicare Prescription Drug Improvement and Modernization Act, providing 40 million older Americans with the opportunity for prescription drug coverage. Signed into law by President Bush in December, the act is a tribute to the president's tenacity and strong leadership and also to the bi-partisan majority in Congress who laid aside their differences over details in order to bring Medicare into the 21st century.

I was a young guy working on Capitol Hill in 1965 for the late Sen. Edward Gurney (R-Fla.) when the original Medicare legislation was passed. This time around I had the opportunity to further join the action as president of 60 Plus Association, a nationwide advocacy organization for older Americans that is working hard to see that Medicare is improved for this generation and the next.

The law isn't perfect. Perfection in public policy is rare, but we're comfortable supporting the new Medicare law that delivers help to the people who need it most without disregarding the need to contain spiraling heath care costs.

The value of the law will be more apparent when it becomes fully effective in 2006. At that time comprehensive prescription drug coverage will be available to every Medicare enrollee who wants it. For a monthly premium of $35, typical seniors could save roughly 50 percent on their prescription costs.

For low-income seniors, individuals with annual incomes below $12,123 and $16,362 for couples, the Medicare prescription drug benefit is a godsend. These are the folks featured in those heartbreaking stories about old people spending their entire Social Security check on the medicine they need to stay alive and free of pain.

That's an ironic injustice in a country with the highest health care spending in the world. And it's an irony we will eliminate in 2006 when the new law will provide drug coverage with no premium payments to low-income seniors, guaranteeing that they will never pay more than $5 for a prescription.

As an interim measure beginning in June of this year, all Medicare beneficiaries will be eligible for drug cards they can take to their local pharmacy for discounts of 10 percent to 25 percent on prescriptions. Low-income seniors holding these cards will get a $600 direct credit towards their prescription costs.

So over the next two years we will fill a crucial gap in Medicare coverage. As important for the long-term health of the program, the new law will open up the Medicare bureaucracy to real competition by giving Medicare recipients a choice of providers.

Instead of being forced to buy Medicare health insurance in the one-size-fits-all government direct plan, you will be able to choose from an assortment of coverage plans offered by private insurance carriers, supervised by the government. Medicare enrollees will be treated like customers instead of wards of the state, with the private carriers competing to offer the best coverage at the best value.

The new drug plans are completely voluntary. Beneficiaries can choose to keep the traditional Medicare plan and still be eligible for the new drug benefit. But the Medicare bureaucrats will have a new incentive to cut out waste, hold down costs and improve service.

That's how America's health system works best. And it's about time we put that 21st century health system to work building on the 40-year-old Medicare program.