H.C.R. NO.








opposing the medicare prescription drug and modernization act of 2003.



WHEREAS, the Medicare Act of 1965 has improved the quality of life for senior citizens by providing access to needed health care for almost 40 years, removing many of the insecurities of old age and suffering and premature deaths due to medical neglect; and

WHEREAS, Medicare has provided a uniform program of health care for senior citizens regardless of their health status or income level, resulting in strong acceptance and support for the program; and

WHEREAS, however, the Medicare Prescription Drug and Modernization Act of 2003 (Medicare Modernization Act) will divide seniors by income levels and regions, thereby removing the universal and uniform features of the program and resulting in the beginning of the privatization of the health care program; and

WHEREAS, the discovery of modern drugs that cure or contain the progress of a variety of illnesses which formerly required surgery or prolonged hospitalization has resulted in a dependency on the use of drugs, many of which are very costly; and

WHEREAS, while the Medicare Modernization Act has included prescription drugs as a benefit for seniors, it is outside of the existing traditional Medicare program, depending on private insurance companies and health maintenance organizations (HMOs) to provide this benefit; and

WHEREAS, seniors want a guaranteed prescription drug benefit under traditional Medicare and not a private plan that could drop their coverage when they need it most, or that increases costs to those with more severe chronic illnesses so the drugs are no longer affordable to them; and

WHEREAS, under the Medicare Modernization Act, the federal government would pay billions of dollars in subsidies to private insurers to provide the drug benefit, money that could be better spent providing a truly comprehensive drug benefit under Medicare; and

WHEREAS, while individual plans may negotiate with pharmaceutical companies to provide drugs at lower prices, Medicare is expressly forbidden from doing so; and

WHEREAS, despite claims that seniors will now have a choice in the selection of the prescription drug or health care provider, seniors will have to make their choices without the necessary information such as:

    1. The drugs that will be offered in the individual plan's drug formulary;
    2. The projected costs of each plan at the point of joining and the projected rise in costs each year; or
    3. The anticipated changes in the plans' formularies;


WHEREAS, while seniors may remain in the Medicare program rather than select any of the private HMOs and preferred provider organizations, the subsidies to the private plans will allow those programs to initially offer plans with lower premiums and fees and more services because of their ability to select those who are younger and without chronic illnesses and disabilities while Medicare will be forced to raise premiums and fees that reflect the cost of caring for the more medically disadvantaged; and

WHEREAS, according to the Congressional Budget Office, the Medicare Modernization Act will result in a ten percent increase in the $250 deductible and $2,850 gap for which there is no coverage; by 2013, the eighth year of the program, the deductible and coverage gap are both projected to increase by 78 percent; as a result, seniors would have to pay a $445 deductible and be responsible for more than $5,000 in drug costs; and

WHEREAS, while the overhead for traditional Medicare is a low two percent, publicly traded HMOs show an average overhead of 16 percent which pays for taxes, profits, dividends to shareholders, administrative costs, and sales and advertising; and

WHEREAS, by combining the two Medicare Trust Funds and capping the General Fund contribution to the Medicare fund, the Medicare Modernization Act will advance the projected date of the system's insolvency by ten years, creating a crisis sooner than later; and

WHEREAS, according to the Center for American Congress, "the new law gives private insurers the authority to ration access to drugs funded by Medicare (and) insurer-created committees decide what types of drugs to cover, which specific drugs to include on their formularies and how high to set the beneficiary payment for each drug"; and

WHEREAS, while extolling the virtues of the Medicare Modernization Act, congressional members have exempted themselves from the Act, preferring to retain the superior coverage they receive through the Federal Employees Health Benefit Program; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-second Legislature of the State of Hawaii, Regular Session of 2004, the Senate concurring, that this body hereby opposes the provisions of the Medicare Modernization Act and supports its repeal; and

BE IT FURTHER RESOLVED that this body requests Hawaii's Congressional Delegation to promote the repeal of the Medicare Modernization Act and work to enact legislation that will ensure universal access to a single-payer uniform health insurance program with subsidies for needy seniors and establish a prescription drug plan as part of the traditional Medicare program designed to lower the cost of prescription drugs for everyone through bulk purchasing; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the members of Hawaii's Congressional Delegation, the President of the Hawaii State Retired Teachers Association, and the President of AARP Hawaii.





Report Title:

Medicare Modernization Act; Opposition