"The most serious flaw is the outright ban on Medicare negotiating lower drug prices from pharmaceutical companies," said Lauren Oshman, M.D., M.P.H., AMSA National President. "This legislation will create windfall profits for the pharmaceutical industry, which has lobbied extensively for these restrictions. If taxpayers are to spend $400 billion over 10 years, then we must be certain that Medicare can negotiate the best prices for senior citizens."

While large businesses, the Veteran's Administration and health insurance companies can all negotiate prices with pharmaceutical companies, this legislation will prevent Medicare from using similar methods to provide seniors with lower cost medications. The Consumer's Union estimates that by the time the benefit is implemented, seniors will pay more out of pocket than they do now as a result of rising drug prices. In fact, the proposed benefit will only cover about 22 percent of projected drug expenditures for seniors over ten years.

AMSA also objects to the demonstration program that would force Medicare to compete with private plans in six metropolitan service areas because it would disproportionately subsidize private plans, by selecting and luring the healthiest and wealthiest seniors out of the traditional program, leaving the sickest beneficiaries behind. This dangerous privatization will ultimately fragment and destroy Medicare by undermining the very principles of the program, leading to higher costs and eventually inequality of health care among American senior citizens.

Finally, AMSA opposes the imposition of an assets test on those with incomes under 135 percent of poverty, which will increase costs for seniors with as little as $6,000 in assets. Though dual eligibles-those who qualify for both Medicare and Medicaid-have been included in the final benefit, Medicaid would be prohibited from offering comprehensive benefits to fill the gaps of Medicare. Many low-income seniors will actually pay more money for less coverage than they receive now through Medicaid.

"Congress should focus on providing the best prescription drug benefit to seniors at the lowest cost to taxpayers, not a subsidy program for pharmaceutical companies," said Dr. Oshman. "AMSA has long supported the creation of a prescription drug benefit for Medicare. While many provisions would help segments of the population, the overall legislation contains too many destructive elements that will hurt too many seniors."