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Fact Sheet: New Medicare Prescription Drug Benefit to Include Low-Cost Options

August 29, 2005

Today's Presidential Action

Today, President Bush Announced New Low-Cost Options Under The Medicare Prescription Drug Benefit That Will Be Available Beginning In January 2006. Medicare beneficiaries will have choices for prescription drug coverage that will cost less and offer more benefits than originally expected. Competition is working to drive down prices, and the President encouraged seniors across the country to sign up for the new benefit.

  • Prescription Drug Plans Will Offer Low-Cost Alternatives For Medicare Beneficiaries. Medicare beneficiaries in almost every state will be able to choose plans that have a premium of less than $20 per month. In addition, some plans will have zero deductibles or deductibles lower than $250 annually, and other plans will provide additional benefits to help cover the gap in Medicare's standard coverage.

New Medicare Coverage Will Offer All Medicare Beneficiaries Better Choices

  • Reform Brought Medicare Into The 21st Century. Medicare was created 40 years ago to provide health care for seniors and people with disabilities, but it had not kept up with advances in medicine. For example, Medicare would pay $28,000 for ulcer surgery, but not $500 for prescription drugs to prevent ulcers. In addition, Medicare would pay for heart surgery, but not for drugs to prevent the heart surgery from being needed. Reform had been promised for years. The Medicare Modernization Act signed by President Bush got it done.
  • Millions Of Americans Are Already Taking Part In Medicare's Expanded Range Of Health Care Services. Medicare offers a variety of new programs, including: a prescription drug discount card; preventive care like the "Welcome to Medicare" physical; and cardiovascular and blood sugar screenings that can help identify and prevent high blood pressure, heart disease, diabetes, and obesity.
  • New Medicare Coverage Will Help All Medicare Beneficiaries Pay For Prescription Drugs. Starting in January, drug coverage will be available that will allow seniors with no drug coverage and average drug expenses to cut their drug costs by half or more. For catastrophic coverage, Medicare will also cover 95 percent of all prescription costs once beneficiaries spend $3,600 of their own money each year.
  • New Medicare Drug Benefits Offer Choice And Flexibility. Everyone on Medicare can pick the drug plan that fits his or her individual needs. Beneficiaries will be able to choose brand name drugs or generic drugs - and pick them up at local pharmacies or receive them by mail.
    • Seniors Can Get Support For Retiree Plans. Medicare will help pay for the costs of good retiree drug coverage from a former employer or union to help keep retiree coverage secure.
  • Medicare Advantage Plans Allow Seniors And Americans With Disabilities To Get Better Drug Benefits At A Lower Cost. Seniors and Americans with disabilities who choose to enroll in Medicare Advantage Plans can get additional coverage at a lower cost, saving an average of $100 per month compared to traditional Medicare.
  • Medicare Will Pay Nearly All Drug Bills For Seniors With Limited Means. About one-third of seniors will be eligible for a Medicare drug benefit with little or no premiums, low deductibles, and no gaps in coverage. Co-payments will amount to no more than $5 for most seniors with limited means, and more than 95 percent of their drug bills will be covered. No senior will ever again have to choose between paying for their drugs and paying for other basic necessities like food and rent.

President Bush Urged Seniors And Americans With Disabilities To Take Part In New Medicare Benefits

  • The Administration Is Conducting A National Outreach Effort. This effort is bringing medical, community, and local partners together with the Federal government to educate seniors and Americans with disabilities about the new prescription drug benefit. Those with questions can also call 1-800-MEDICARE or visit for answers.
    • Eligibility Forms For The Limited-Income Subsidy Are Available Now. Millions of current Medicaid beneficiaries with limited means will be automatically enrolled for extra help with drug costs, and subsidy applications have been mailed by the Social Security Administration to millions of other low-income seniors and Americans with disabilities who are likely to be eligible. Forms are also available at locations around the country, including over 30,000 pharmacies. No financial documents or complicated records are required. "When in doubt, fill it out."

George W. Bush, Fact Sheet: New Medicare Prescription Drug Benefit to Include Low-Cost Options Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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