National Alliance on Mental Illness
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NAMI Testimony on Medicare Drug Benefit

For Immediate Release, April 5, 2000
Contact: Chris Marshall

The following is testimony by NAMI President Jackie Shannon delivered to the Senate Finance Committee on proposals for a Medicare outpatient prescription drug benefit. In her testimony, Ms. Shannon stresses NAMI's position that any new Medicare drug benefit should include non-elderly SSDI beneficiaries with severe mental illnesses and should include coverage for the newest and most effective psychiatric medications.



MARCH 22, 2000

Mr. Chairman, Senator Moynihan and members of the Finance Committee, I am Jacqueline Shannon of San Angelo, Texas, president of the National Alliance for the Mentally Ill (NAMI). I am pleased today to offer NAMI's views on proposals now before the Congress to expand the Medicare program to cover the costs of outpatient prescription drugs. In addition to serving as NAMI's president, I am also the mother of Greg Shannon. Greg was diagnosed with schizophrenia in 1985. For the past 15 years, Greg and our entire family have struggled with his illness. Like so many of NAMI 210,000 consumer and family members, I am grateful that the Finance Committee is now poised to fill what has been the most significant gap in the Medicare program since its inception 35 years ago - outpatient prescription drug coverage.

NAMI is extremely pleased that this critical issue is gaining significant bipartisan attention in Congress this year. As President Clinton observed in his State of the Union address on January 27, no one doubts that if the Medicare program were enacted today outpatient prescription drug coverage would be included as part of the basic benefits package. As the Committee has heard from many witnesses on this issue, prescription medications played a relatively minor role in medical care back in 1965 when Congress passed, and President Johnson signed into law, Title XVIII of the Social Security Act. Today, advances in science and treatment have yielded new medications that have become our frontline of attack on major illnesses.

This is certainly the case with serious brain disorders, probably more so than any other class of diseases. Back in 1965, someone diagnosed with a serious brain disorder such as schizophrenia or bipolar disorder (manic-depression) was likely to end up spending much of their adult life in a public psychiatric hospital being treated with medications such as haldol and thorazine that were only marginally effective in treating symptoms and had serious, debilitating side effects. For many consumers, these side effects were as challenging as the symptoms of the illness itself and have been directly related to the problems many have faced in consistently adhering to treatment. Fortunately, advances in science in the last two decades, especially in the development of a new generation of atypical antipsychotic medications for schizophrenia and selective serotonin reuptake inhibitors (SSRIs) for depression, have made it possible for many consumers to achieve a level of recovery never dreamed of decades ago. It is NAMI's view that these new treatments - made possible in large part through the bipartisan effort in Congress to increase federal funding for brain research - are central to higher functioning and recovery.

TWWIIA and its Role in Recovery from Severe Mental Illness

We at NAMI know that this vision of treatment and recovery is shared by you, Chairman Roth, and Senator Moynihan, as well as all the members of this Committee who sponsored and pushed so hard for passage of the Ticket to Work and Work Incentives Improvement Act (TWWIIA) last year. TWWIIA addresses head-on so many of the outdated and unfair eligibility rules in the SSDI, SSI, Medicare and Medicaid programs that forced beneficiaries to choose between a job and health care coverage. During debate over this legislation last year, and since its enactment, we heard from so many consumers and families who told of their frustrations at seeing genuine recovery from severe mental illness fall short because they were forced to quit a job or cut back their hours, not because of their illness, but because of fear of losing health coverage. On behalf of NAMI's 210,000 consumer and family members, I would like to offer our deepest appreciation for your leadership in passing this long-overdue law. Recovery from severe mental illness should mean a chance at a productive, independent life, not a lifetime on public benefits (usually at or below the poverty line).

While TWWIIA was a tremendous bipartisan accomplishment, it is a first step. Perhaps the most important next step that Congress can take to help people with mental illness, and all severe disabilities, go to work is to add an outpatient prescription drug benefit to Medicare. NAMI agrees that the 4.5 years of added Medicare eligibility for SSDI beneficiaries included in TWWIIA will be critical in helping people to stay on the job longer. However, for too many people with severe disabilities on SSDI, this extended period of health care coverage comes with a benefit package that is inadequate. Moreover, the most overwhelming gap in the Medicare benefit package is coverage for outpatient prescription drugs.

The Interests of Non-Elderly SSDI Beneficiaries Must Be Part of This Debate

NAMI recognizes that so many of the interests that come before this Committee to offer their views on the issue of Medicare prescription drug coverage speak only "coverage for seniors." While this characterization of the issue may offer political simplicity, we believe that it excludes the population of Social Security recipients who need coverage for prescription drugs the most - non-elderly people with disabilities who are SSDI beneficiaries. Furthermore, NAMI would argue that it is non-elderly SSDI beneficiaries with severe mental illnesses who most need outpatient drug coverage. While some SSDI beneficiaries may need only coverage for acute care to achieve recovery and work, individuals with severe mental illnesses simply must have coverage for medications in order to even consider employment as an option.

Currently, there are 1.3 million non-elderly disabled Americans on SSDI. Of this population, nearly 400,000 became eligible through a "mental disorder" under Social Security's medically determinable eligibility standards. While this figure is not nearly the size of the number of our nation's growing elderly population, it does represent an important population in the Medicare debate. First, people with severe mental illnesses come on to the cash benefit rolls earlier than any other disability category. The typical onset of an illness such as schizophrenia is late adolescence or early adulthood. Young adults with the most severe, disabling symptoms are likely to qualify for benefits within a year or so. Many depend on benefits for a large part of their adult life. By contrast, individuals who use SSDI as an early retirement program for injuries or chronic disabilities related to lifetime of manual labor stay on cash benefits for a brief period before moving into Social Security's main retirement program. Thus, the long-term fiscal implications of SSDI beneficiaries with severe mental illness go beyond their numbers.

Second, the lack of an outpatient prescription drug benefit in Medicare has important consequences for state Medicaid programs. Under the current system, many SSDI beneficiaries with severe mental illnesses are forced to spend down their assets and go into poverty to establish eligibility for Medicaid to get drug coverage. Once on Medicaid, these individuals must stay poor to keep their Medicaid coverage. Persons who are dual eligible for SSI and SSDI face similar concerns, as do so-called "disabled adult children," who must move onto SSDI when their parents retire. This system also prevents many families from providing even the most modest forms of financial assistance to their sons, daughters and siblings with severe disabilities, out of fear of jeopardizing Medicaid eligibility. The TWWIIA will be a tremendous help to many consumers and families in this arena, but more needs to be done to ensure that people do not have to become poor, and stay poor for their entire adult life, just to access prescription drug coverage.

What Does NAMI Want to See in a Medicare Outpatient Prescription Drug Benefit?

1. Congress should ensure that any prescription drug program offered as part of, or as a supplement to, Medicare be made available to non-elderly SSDI beneficiaries under the same terms and conditions as those for seniors. Although election-year politics may make it tempting to focus on the nation's growing elderly population, we are adamantly opposed to any program that would discriminate against non-elderly people with disabilities who are eligible for Title II benefits by establishing a program that either limits their eligibility or establishes terms or conditions that do not apply to seniors. Managed care plans such as Medicare Plus Choice and "prescription drug only" plans should be required to offer enrollment to non-elderly SSDI beneficiaries under the same rules and conditions as those for seniors.

2. Prescription drug coverage under Medicare should accompanied by the enactment of parity for mental illness benefits. Currently, the Medicare co-payment for Part B outpatient services is 20 percent. This co-payment does not apply to mental illness treatment, however, which is only covered at a rate of 50 percent. There is also currently a 190-day lifetime limit for inpatient psychiatric hospital treatment. Furthermore, only office-based therapy and partial-hospitalization mental health services are allowed under Medicare's current coverage-no assertive community treatment or psychiatric rehabilitation is covered. NAMI urges that Congress use this historic opportunity to address a prescription drug benefit to also address the discrimination in Medicare's existing mental illness benefits. Neither the proposals put forward by the Bipartisan Commission on the Future of Medicare nor the Clinton Administration addresses this basic unfairness within Medicare.

3. To the maximum extent possible, NAMI believes that a Medicare outpatient prescription drug benefit should be a national program benefit that is standardized throughout the country. The depth and scope of coverage for medications should not be dependent on where you live. While NAMI is not opposed to a state role in any program, there should be national standards that ensure reasonable similarities in coverage across the nation.

4. Coverage should be adequate to finance the most expensive drugs for the treatment of serious and persistent mental illness. NAMI is concerned that the President's Medicare prescription drug proposal, as well as several competing plans in Congress, has a principal objective of providing a tangible benefit to a large number of people, rather than helping a small number of Medicare beneficiaries with high drug expenses. For example, in the President's plan there is no limit on how much an individual would have to pay out-of-pocket for medications. Likewise, the benefit would begin immediately, regardless of an individual's expenses. While such limitations may serve to keep premiums low so that large numbers of healthy Medicare beneficiaries will sign up for a voluntary program, these restrictions are likely to impose significant burdens on people with chronic and severe illnesses who rely on medications as their principal form of treatment. An examination of the costs of several key psychiatric medications indicates that, while many Medicare beneficiaries might be helped in meeting the high costs associated with their drugs, substantial gaps in coverage would likely persist under proposals such as the President's. Average annual costs for major psychiatric medications include: Clozaril ($6,200), Paxil ($711), Prozac ($808), Risperidone ($2,800), zoloft ($852), and Zyprexa ($3,000). It is important to note that most people living with severe mental illnesses such as schizophrenia and bipolar disorder are prescribed several medications (including drugs to treat side effects) rather than a single drug.

5. Medicare prescription drug formulary policies should not interfere with access to the newest and most effective medications for serious brain disorders such as schizophrenia and bipolar disorder. Medications for mental illnesses differ from one another - either in their effectiveness in treating specific symptoms or disorders, or in their side effects. There is solid evidence that newer medications offer advantages over conventional medications in either effectiveness or side effects. For example, most treatment guidelines now recommend newer antipsychotic medications as the drugs of first choice because they can be more effective in treating symptoms in some individuals and because their side effects may cause fewer short-term and long-term problems - and in particular, fewer cases of tardive dyskinesia, an irreversible and potentially disabling movement disorder.

However, some health plans (including many that now are a part of Medicare through the Medicare Plus Choice program) place restrictions on access to medications. Sometimes these policies may be appropriate to avoid the inappropriate use of drugs or to encourage the use of generic equivalents. But often the limitations are designed primarily to discourage the use of more expensive medications. Limitations may take the form of a restricted formulary, in which only certain medications are covered by the plan, or a "fail-first" policy, requiring failed treatment with older, less expensive medications before allowing treatment with newer medications. NAMI supports efforts to ensure that Medicare (and all health plans participating in the program such as Medicare Plus Choice) offer access to all effective and medically appropriate medications. If Medicare (or a participating health plan) uses a formulary, exceptions from the formulary limitation must be allowed when a non-formulary alternative is medically indicated. Moreover, procedures should be established whereby beneficiaries can appeal a decision to prescribe a specific medication. Finally, Medicare (and participating plans) should not be allowed to require beneficiaries to switch from medications that have been effective for them.


On behalf of NAMI's consumer and family membership, thank you for the opportunity to offer our views on this critically important issue. NAMI looks forward to working with this Committee and the entire Congress to ensure that the Medicare program is modernized and preserved for generations to come and that its meets the needs of one of America's most vulnerable populations, people with serious, persistent mental illnesses.