Like Countable?

Install the App
TRY NOW

Medicare’s Prescription Drug Coverage Became Law Under George W. Bush On This Date

What do you think of Medicare Part D on its anniversary?

by Countable | Updated on 12.7.18

On December 8, 2003, President George W. Bush signed the Medicare Prescription Drug, Improvement, and Modernization Act into law ― the largest overhaul of Medicare since its enactment in 1968 that created the voluntary prescription drug coverage under Medicare Part D.

Why did it come up?

Prescription drug prices were on the rise, making it difficult for fixed-income senior citizens enrolled in Medicare to afford their prescriptions without assistance. According to the Congressional Budget Office (CBO), drug spending per person grew at an annual rate exceeding 10% each year from 1995 through 2002.

That prompted President Bill Clinton to propose a voluntary Medicare Part D prescription drug benefit in 1999, but as an outgoing lame duck president with both chambers of Congress controlled by Republicans his idea stalled. Incoming President George W. Bush was able to pass a Medicare Part D through the House in 2002 during the 107th Congress, but it then stalled in the Senate. After the 2002 midterms saw modest gains by the GOP majorities, debate on Medicare Part D resumed when the bill got its first vote in June 2003.

Following two days of debate, a floor vote in the early morning hours of June 27 appeared to have failed 214-218. But then Reps. Butch Otter (R-ID) and Jo Ann Emerson (R-MO) switched their votes from no to yes, and Rep. Ernest Istook, Jr. (R-OK) voted present to “pair” his no vote with a supporter who absent due to a death in the family and the bill passed 216-215. The Senate passed its version of the bill 76-21, and a conference committee then produced a compromise bill that went back to the floor in November.

Voting in the House began at 3 a.m. on November 22, and once again the Medicare Part D bill appeared set to fail, this time 215-219. But then Istook switched his vote from no to yes, and with the margin slightly narrowed the vote was held open for two hours. Then at around 5:50am, Otter and Rep. Trent Franks (R-AZ) switched their votes from no to yes, and with passage assured  four Democrats switched their votes from no to yes while a pair of bipartisan representatives flipped from yes to no ― and the bill passed 220-215 (25 Republicans opposed, 16 Democrats in favor).

The Senate’s consideration of the conference report was less controversial, as senators agreed 70-29 to “invoke cloture” and prevent a filibuster before sending it to President Bush’s desk on a 54-44 passage vote (11 Democrats in favor, 9 Republicans opposed).

What did it do?

The bill created the voluntary prescription drug insurance benefit known as Medicare Part D offered by private insurance companies and HMOs. Under Medicare Part D plans, beneficiaries pay a monthly premium that varies based on income (or is subsidized for low-income enrollees); have modest cost-sharing for generic drugs (though it’s higher for brands and non-preferred drugs); and potentially have an annual deductible depending on the specific plan they’re enrolled in.

It also modified plans offered through Medicare Advantage (which offers Medicare benefits accessible through private health insurers) by letting enrollees sign up for a full year and allowed prescription coverage to be deferred to a Part D plan, and established new tax-free health savings accounts.

Further, it prohibited the federal government from negotiating discounts with drug companies or establishing a formulary (although insurance providers could), and provided a subsidy for large employers to maintain private prescription drug coverage for their retirees.

In his remarks at the Medicare Part D bill signing ceremony, President George W. Bush said:

“These reforms are the act of a vibrant and compassionate government. We show our concern for the dignity of our seniors by giving them quality healthcare. We show our respect for seniors by giving them more choices and more control over their decisionmaking. We're putting individuals in charge of their healthcare decisions...
The challenges facing seniors on Medicare were apparent for many years, and those years passed with much debate and a lot of politics and little reform to show for it. And that changed with the 108th Congress. This year we met our challenge with focus and perseverance. We confronted problems, instead of passing them along to future administrations and future Congresses. We overcame old partisan differences. We kept our promise and found a way to get the job done. This legislation is the achievement of Members in both political parties. And this legislation is a victory for all of America's seniors.”

What has its impact been?

Enrollment in Medicare Part D plans first opened in 2006, when more 30.5 million Americans signed up. Since then, growth in Part D enrollment has largely kept pace year-over-year with overall Medicare enrollment growth ― with Part D enrollees comprising more than 70% of all Medicare beneficiaries as this chart from USAFacts shows:

In terms of cost, spending Part D prescription drug benefits have consistently represented about 15% percent of overall Medicare expenditures and are now closing in on $100 billion annually:

Some Part D drug plans included what became known as the coverage gap or “donut hole”, which occurs when an enrollee has to pay more for prescriptions after they and their plan spent more than a certain amount in a year. The passage of the Affordable Care Act (aka Obamacare) in 2010 set in motion policies aimed at closing the donut hole gradually until it was scheduled to be eliminated in 2020.

In February 2018, President Donald Trump signed the Bipartisan Budget Act into law, which effectively closed the donut hole starting in 2019 by requiring some pharmaceutical manufacturers to pay 70% of enrollee’s brand name drug costs instead of 50%. The change produced $11.8 billion in budgetary savings over a decade.

— Eric Revell

(Photo Credit: Bush White House / Public Domain)

Countable

Written by Countable

Leave a comment
(44)
  • John
    Voted Sad
    12/08/2018
    ···

    There should be universal single payer healthcare, cradle to grave.

    Like (16)
    Follow
    Share
  • IllWill
    12/08/2018
    ···

    Hey Sneaky Pete, calling people leftist socialist Democrats is quite the opposite of communicating with a civil tongue. Don’t be a hypocrite. Universal healthcare is a solution to the problem because it works well in every country that has it. The government also needs to have the ability to negotiate drug prices, a pretty common sense idea.

    Like (15)
    Follow
    Share
  • SneakyPete
    Voted Happy
    12/08/2018
    ···

    AMAZINGLY 😉 ONCE AGAIN LEFTIST HATE COMMENTS Sadly 😔 all the Progressive Leftist Socialist Democratic members here and in the MSM only can spout hatred and negative commentary UNLESS it’s for their causes and agendas. The calls for “Universal” or “Single Payer” Health Care, as seen in Canada and Europe, is not the solution to the problem. Grow the hell up and communicate with a civil tongue 😛. SneakyPete..... 12*8*18.....

    Like (10)
    Follow
    Share
  • Hillary
    Voted Apathetic
    12/08/2018
    ···

    While this was a good medium step is fell short of a universal health care system. Stop allowing insurance companies to legally abuse the American people by creaming a profit off poor, elderly, disabled, mentally ill, chronically ill people! Someone caring for a child with asthma still deserves to have a roof over their head, food on the table, and a safe car to get that child to the dr!

    Like (4)
    Follow
    Share
  • J. scott
    Voted Sad
    12/09/2018
    ···

    Actually it Sounds reasonable but I don’t trust the Trump Administration and his Conservative/GOP Senate cronies.

    Like (9)
    Follow
    Share
  • Caren
    Voted Happy
    12/08/2018
    ···

    I bet everyone reaping the benefits of this program UNDER the service of a REPUBLICAN is thankful. Those who are not thankful who are benefiting only wish it had happened under a Democrat. There really is someone out there working for and doing the right thing. Hopefully President Trump will correct the abominable Obamacare which caused our premiums to increase and our benefits to decrease.

    Like (3)
    Follow
    Share
  • Bernie
    Voted Apathetic
    12/08/2018
    ···

    And leftists still hated him proving you can’t buy their love my capitulating to their utopian crap.

    Like (1)
    Follow
    Share
  • Gary
    12/09/2018
    ···

    It was a good idea but our bought and sold legislators (by Big Pharma) decided to not impose any cost controls. Thus, we are paying prices for generic drugs that should be far less than they are. How about fixing that senators and reps!!

    Like
    Follow
    Share
  • Carla
    Voted Sad
    12/08/2018
    ···

    woefully inadequate. Until the pharma companies are regulated and changed to nonprofit there is no hope

    Like (4)
    Follow
    Share
  • Robert
    Voted Sad
    12/08/2018
    ···

    Hey CONGress, Why can’t Medicare and Medicaid negotiate for pricing on drugs? In addition to that, why are America pharmaceutical companies that get FDA approval charging Americans the most, and allowed to negotiate with other countries. AND then the socialist scum then tells Pharma that this is all “we“ will pay and it’s WAY LESS then everyone else. DO YOUR JOB.

    Like (3)
    Follow
    Share
  • Delmar
    Voted Sad
    12/09/2018
    ···

    Think about this your going to pay a Big Pharmaceutical company a few (the part D premium) just so you can pay almost full price for the medications again and in the end you lose money and Big Pharmaceutical companies get rich off the backs of seniors!!

    Like (2)
    Follow
    Share
  • Robert
    Voted Happy
    12/08/2018
    ···

    Very good but still many cannot afford medical care and medicine

    Like (2)
    Follow
    Share
  • DEGUp
    Voted Sad
    12/08/2018
    ···

    And what has happened to prescription prices?

    Like (1)
    Follow
    Share
  • Jann
    Voted Happy
    12/09/2018
    ···

    Now step up to Universal health care.

    Like (1)
    Follow
    Share
  • Jill
    Voted Apathetic
    12/08/2018
    ···

    It is good as far as it goes. The donut hole is a disgrace. There are two different sets of criteria used to determine when it opens and how to climb out of it! The way it is set up punishes those who need medications, especially expensive medications. If only one criteria was used for both the onset and the end it would be much less difficult for folks to afford their medications. Best of all would be no donut hole at all. I’m really sick of insurance companies screwing the public.

    Like (1)
    Follow
    Share
  • Leon
    Voted Apathetic
    12/08/2018
    ···

    One of the most defrauded government programs.

    Like (1)
    Follow
    Share
  • Sherry
    Voted Sad
    12/08/2018
    ···

    The US Government needs the ability to negotiate drug prices! Medicare is the largest purchaser of prescription drugs in the U S yet we pay more for the same medication then any other country!

    Like (1)
    Follow
    Share
  • I.Got.an.Idea...
    Voted Apathetic
    12/08/2018
    ···

    This may have become law under W, but it was only a political ploy to garner favor. The program created more than 70 stupid prescription options, each one analyzed and set up to create more profit for the greedy Republican Corporations and ultimately more cost to patients. Many had to hire specialists to go through all of the options to see which ones they could possibly afford and still stay healthy. Disgusting behavior and actions by unethical and immoral Republicans. Profit is ALL Republicans care about, NOT Citizens health and safety.

    Like (1)
    Follow
    Share
  • Mark
    Voted Apathetic
    12/08/2018
    ···

    What ... am I supposed to get excited by this anniversary notice! Won’t happen!!! Bush was horrible as a president. Repugnicans have always fought this while giving tax breaks to their deep pocketed friends and trickle down economics “aka Urine Showers” for the rest of us! Read MY lips, no more bushes

    Like
    Follow
    Share
  • 1958FRO
    Voted Apathetic
    12/08/2018
    ···

    Please don't gut Medicare, Medicaid, and Social Security.

    Like
    Follow
    Share
  • Lael
    Voted Happy
    12/08/2018
    ···

    Support it

    Like
    Follow
    Share