Friday Alert  12/22/05
Alliance for Retired Americans
888 16th Street, N.W. -  Washington DC, 20006 - (202) 974-8222 - www.retiredamericans.org

Part D Private Plans Don't Get Same Discounts as VA
Drug prices negotiated by Part D private insurers are not nearly as deep as those negotiated by the Department of Veterans Affairs, according to a new survey released by Families USA. The study found that the VA, which negotiates directly with drug makers, procured discounts two to three times lower than Part D plans. VA prices were far cheaper than Part D plans for 19 of 20 drugs examined. In an extreme example, a year's supply of Zocor (20 mg., cholesterol lowering agent) cost the VA $167.80, while the lowest Medicare plan price was $1,323.72, a difference of $1,155.92, or 688.9%.  With nearly 44 million beneficiaries, Medicare has tremendous bargaining power, eclipsing the VA's 5 million beneficiaries. Yet Medicare was prohibited from direct negotiations in the contentious 2003 law, which will cost taxpayers $700 billion over 10 years. "Part D lines the pockets of the drug and insurance industry as it shills seniors and the American taxpayer," said George J. Kourpias, president of the Alliance. "Falling Short: Medicare Drug Plans Offer Meager Savings" can be found at www.familiesusa.org.

Medicaid's Neediest May Pay the Heaviest Price in Transition to Part D
Come January 1, Medicare's frailest, sickest and poorest seniors may not be able to get the medications they so desperately need. These 6.4 million so-called "dual eligibles," who qualify for both Medicare and Medicaid, may fall through the cracks as they lose their dependable Medicaid drug coverage and are automatically enrolled in Part D drug plans randomly chosen by the Centers for Medicare and Medicaid Services (CMS).  No one is sure how this transition will work. Even if just 1% of dual eligibles are overlooked during the transition, that is 60,000 people who will have problems getting their medicines in January. 

"Any glitch in the process could be disastrous," said Ruben Burks, secretary-treasurer of the Alliance. "At every level, we must ensure seamless drug coverage for the neediest patients."

The switch to Part D is largely considered inferior to Medicaid drug coverage despite extra help for low-income seniors written into the 2003 Medicare law. With Medicaid, dual eligibles were able to get their prescriptions for free if they could not afford the co-pays.  Under Part D, dual eligibles not living in nursing homes will have to pay a co-payment for the first time, and a pharmacist can refuse to dispense a drug if the patient cannot pay.  Those who are unaware their Medicaid coverage ends on January 1 may find their plan does not cover some of their medications or participate with their pharmacy.

Nursing Homes Burdened by Part D Complexities
While seniors frantically sort out the myriad of Part D plans, 1.4 million nursing home residents are facing added difficulty as they struggle to find appropriate coverage.  The task of choosing a Part D plan is made even more cumbersome for nursing homes because 71% of residents have some form of cognitive impairment, 75% are 75 years or older, and residents use an average of 8 or 9 medicines.  To make matters worse, nursing home staff may educate their patients about the plans, but are forbidden to make decisions for them, even if the resident has no family to turn to for help. The one bright spot is that in 2006, nursing home residents are able to change plans once a month, unlike most Medicare beneficiaries who can only switch once a year.

"If Congress had created a simple drug benefit under Medicare this could have been avoided," said George Kourpias, president of the Alliance. "Nursing home staff already have a difficult job providing essential care to seniors, and these private drug plans are unnecessarily adding to their work load."

GOP Plays Scrooge Passing Draconian Budget Cuts
With Vice President Cheney casting the tie-breaking vote, Senate Republicans passed $40 billion in budget cuts aimed mostly at programs for the elderly, children and the poor. For the first time since 1997, Medicare and Medicaid were caught in the GOP's budget crosshairs. The bill will make it harder for seniors to qualify for Medicaid's long-term care assistance, require higher Medicare out-of-pocket costs, and freeze Medicare home health care and doctor payments.

At the same time, the bill shields pharmaceutical and insurance companies from cuts that would affect industry subsidies. The White House threatened to veto the bill if it included a Senate provision that would have slashed $2 billion from a Medicare fund intended to lure private insurers into Part D. "It's an egregious example of misplaced priorities. Our leaders refuse to stand up for the interests of middle-class Americans in the same way they protect special interests," said Edward F. Coyle, executive director of the Alliance.

GOP lawmakers who voted for the bill made the dubious claim that it would rein in federal spending and reduce record deficits that have grown wildly under the Bush administration's profligate tax cuts.

"To say these Draconian cuts will reduce our record federal deficits is a snow job of the worst kind," said Coyle. "Next month, the same lawmakers who voted to cut $40 billion to help our most vulnerable citizens will vote to cut $100 billion in the taxes of our wealthiest."

Because the Senate slightly amended the bill, the House must vote again on the legislation possibly over the holidays or in late January. The House narrowly passed the budget cuts early Monday morning by a vote of 212-206. There is still time to call your Representatives to tell them these immoral cuts do not represent American values. 

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