June 08,2001

Grassley Comment on CBO Prescription Drug Proposal

M E M O R A N D U M

TO: Reporters and Editors
FR: Jill Gerber, 202/224-6522
RE: prescription drug benefit
DA: Friday, June 8, 2001

The Congressional Budget Office today released cost estimates for several major approaches
to adding a prescription drug benefit to Medicare. Sen. Chuck Grassley, ranking member of the
Committee on Finance, favors concepts from the “Breaux-Frist II” approach, which would cost $176
billion over 10 years, according to today’s estimate. In April, Grassley won passage of an
amendment to the budget resolution to provide funding and maximum flexibility for lawmakers to
craft a responsible Medicare reform and prescription drug proposal. Grassley’s amendment gives
the chairman of the Budget Committee the ability to reallocate funds as necessary, beyond $153
billion and not over $300 billion over 10 years, toward any Medicare legislation the Finance
Committee puts forth, as long as this legislation provides reforms to the Medicare program and
improves access to prescription drugs.

Grassley made the following comment on today’s cost estimates:

“This is good news. The latest estimates show that we clearly can craft an affordable
prescription drug benefit for all older Americans with the money set aside in the budget. The
estimates affirm that competition and private sector tools are keys to ensuring that older Americans
get the most bang for their buck in purchasing prescription drugs. At the same time, we must
remember that there are other critical improvements to Medicare that are long overdue. For
example, Medicare beneficiaries today have no limit on their out-of-pocket expenses for current
Medicare benefits -- the kind of protection that most Americans with private insurance do have. So
I’m very hopeful that both parties will be able to come together this year to make a number of
significant improvements to Medicare for our seniors.”