Friday Alert  9/16/05
Alliance for Retired Americans
888 16th Street, N.W. -  Washington DC, 20006 - (202) 974-8222 - www.retiredamericans.org

GOP Conflicted Over Social Security Privatization
GOP plans to overhaul Social Security have taken a back seat to more pressing matters, but Republicans are increasingly skittish—and conflicted—about how to move forward with President Bush's signature domestic priority. According to reports from Roll Call, the head of the Republican Congressional Campaign Committee has recommended that the GOP indefinitely shelve plans to privatize Social Security citing public dissatisfaction and its affect on the 2006 mid-term elections. Seniors are overwhelmingly opposed to private accounts and tend to vote in larger numbers, particularly in off-year elections. 

House Republican leaders are still looking to pass legislation that would use the Social Security surplus to fund private accounts. The Growing Real Ownership for Workers (GROW) Act (H.R. 3304), introduced by Rep. Jim McCrery (R-LA), claims to stop the raid on the surplus but is nothing more than a first step in privatizing the 70-year-old social insurance program. The Alliance strongly opposes H.R. 3304 because it will not provide guaranteed security for future retirees and does nothing to ensure the program’s future solvency. The Congressional Budget Office estimates the proposal would increase the deficit by $1 trillion by 2021.

In the near term, the Senate is unlikely to move forward on Social Security. Senate Republicans have been unable to agree on a proposal while Supreme Court nominations and the ongoing reconstruction efforts in the Gulf Coast are higher priorities. However, House Ways and Means Chair Bill Thomas (R-CA) said this week that he was “optimistic” about action on Social Security this year. Rep. Thomas is working on a broad retirement security bill that may include the GROW Act along with other measures affecting 401(k) plans and pensions.

Insurers and Wall Street Eye Profits from Drug Benefit
Health insurers are positioning themselves to reap large profits as Medicare launches the Part D drug benefit that begins in January.  According to analysts, the new drug benefit will boost 2006 revenue at seven of the nation's largest health insurance companies by at least $4.45 billion. Moving quickly to capitalize on the opportunity, companies like Aetna Inc. are doubling projected spending to market, sell and administer Part D programs.  Investors are also looking to capitalize, as demonstrated by the recent 20% to 50% increase in managed care stocks.

Seniors will soon be bombarded with confusing marketing materials and pressured to enroll in a plan that may not be beneficial for them. Before signing up, Medicare beneficiaries and their families should compare drug plans, ask about out-of-pocket costs and find out how soon costs will increase. Also, seniors need to make sure that their drugs and pharmacies are covered by the plan they choose.

PBGC Says Delta and Northwest Must Pay Pensions
Delta and Northwest filed for bankruptcy protection this week, opening the possibility of another massive pension default. The airlines are widely expected to seek wage cuts and concessions from workers and retirees while they reorganize. Delta’s pension fund is reportedly underfunded by more than $10 billion. But on Thursday, the beleaguered Pension Benefit Guaranty Corporation (PBGC), the federal agency that insures private pension plans, announced that the airlines would be required to continue making its pension contributions despite bankruptcy. PBGC is running record deficits due to a string of corporate bankruptcies, including the largest pension default by United Airlines last May. Several pension bills are working their way through Congress, though the Alliance has concerns that beneficiaries, not pension plan sponsors, could be forced to bear the greatest burdens through benefit reductions.

Employees Shouldering the Burden of Rising Health Care Costs
Three different surveys released this week portray a very costly future for the employment-based health insurance system. The Kaiser Family Foundation, Mercer Human Resource Consulting and the Robert Wood Johnson Foundation all report employees will soon have to shoulder the projected increases in health insurance costs, possibly forcing many workers to join the ranks of the uninsured. The cost of health insurance for working Americans rose 9.2% this year, far outpacing inflation and workers’ pay increases, and is projected to rise as much as 12% next year, according to the surveys.  At the same time, the proportion of employers providing health insurance continued a steady decline, falling to 60%.  Among very small companies, fewer than half provide health insurance.  Employers are being forced to either drop health coverage entirely, or offer high-deductible plans that shift more cost and risk to employees.

Fight Drug Company Greed!
In one of the most important cases against drug company greed today, the Prescription Access Litigation (PAL) Project is challenging manipulated and inflated drug prices, which cause consumers to pay too much for their drugs. PAL is a national coalition of over 100 organizations, including the Alliance for Retired Americans, working to make prescription drug prices more affordable for consumers, using class action litigation and public education. This case holds the promise of changing the system and making prescription drugs more affordable. To move forward with its litigation, PAL needs to identify individuals on Medicare who have paid for certain drugs used to treat cancer, asthma, emphysema and hepatitis C. Time is of the essence and plaintiffs must be identified by the end of September. If you or someone you know fits these criteria, contact the Prescription Access Litigation Project by calling (617) 275-2810 or email hodin@communitycatalyst.com.

White House Conference on Aging Posts Delegate Information Online
Delegates to the 2005 White House Conference on Aging can find information on the conference, including the complete list of delegates by state, on the WHCoA website at www.whcoa.gov . The WHCoA will be held in Washington, DC, from December 11-14, 2005.

How You Can Rebuild the Gulf Coast
The AFL-CIO's Union Community Fund has established a special Hurricane Relief Fund that will target help where it’s needed most by working families. Make a donation by visiting their website at https://secure.ga3.org/08/UCF_Katrina_Relief.

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