Friday Alert  4/28/06
Alliance for Retired Americans
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Medicare Part D Problems Become More Evident
A 59-year-old man from Newburgh, New York died in March after he stopped taking medications he could no longer afford under Medicare Part D, according to his pharmacist and his cousin.  The report, in USA Today, was part of a story summarizing the findings of a Kaiser Family Foundation poll, which found that of the 30 million beneficiaries enrolled in the Medicare Part D program, 19% are actually paying more for their prescriptions under their plan, and another 19% are breaking even.  Among those not benefiting from the program are the 6.4 million low-income people who previously had no co-payments for their medicines under Medicaid, but now pay between $1 and $5 per drug. 

To help low-income and disabled beneficiaries get the best coverage possible, the California Alliance for Retired Americans, along with the Action Alliance of Senior Citizens of Greater Philadelphia, have filed a class-action lawsuit in federal court.  The suit seeks to have a permanent injunction issued, forcing Medicare to resolve the problems that have plagued enrollment; inform drug plans that low-income beneficiaries are eligible for subsidies; and "take any and all other steps to ensure that plaintiffs and class members receive the full benefits of the Part D program."

"Many drug companies and state governments have used Part D as an excuse to drop their successful drug assistance programs," said George J. Kourpias, President of the Alliance.  "In effect, they have threatened the lives of the poorest and most vulnerable seniors, those this program was supposedly designed to help.  It's inexcusable that someone has to die because of this program before people realize how many seniors are being hurt by Part D."

Part D Enrollment Numbers Are Underwhelming
The Bush Administration this week released the latest enrollment data from the Department of Health and Human Services (HHS) on the prescription drug program, but did not highlight some of the key information.  Before January 1, 2006, approximately 16 million Medicare beneficiaries lacked drug coverage.  Of these, only slightly more than half - or about 9 million - signed up for the Part D benefit as of April 18.  Those beneficiaries who sign up after May 15 will face an increase in monthly premiums of 1 percent for every month past the deadline.  Because they cannot enroll until the fall, this means they will be subject to a 7 percent minimum penalty for the rest of their lives.  However, President Bush still strongly opposes extension.  "The Bush Administration believes that the 7 million elderly and people with disabilities on Medicare who haven't signed up for a Part D plan are 'dawdling.'  But many of us know the reality is that beneficiaries are simply bewildered by the complexity of the program," said Ruben Burks, Secretary-Treasurer of the Alliance.

Formulary Rule Change Better Late than Never
The Bush administration issued a new policy on Wednesday that protects Medicare beneficiaries against "the sudden loss of coverage for drugs they are taking" under Part D, according to the New York Times.  With the change, insurers can continue to change the list of drugs they decide to cover (formularies).  However, when they make those changes, they must continue to cover beneficiaries who have already been taking the drugs they are dropping.  The change attempts to tackle a major criticism of the Medicare drug benefit, that it favors drug companies over retirees.  Senior advocates had said it was unfair that insurers could change their formularies with little notice, while the insured would be stuck with the new formulary for a whole year.  The change was announced just before Senator Max Baucus (D-MT) and other Democrats were completing the wording on a bill increasing protections for Medicare beneficiaries.  "With the election season just around the corner, and the President's poll numbers plummeting, the administration realized their original plan would not fly," said Edward Coyle, Executive Director of the Alliance.  "Congress waited for months to see how far they could push their luck with seniors, then started to get nervous."

Eighteen Well-Heeled Families Fund Estate Tax Repeal Effort
Interests wishing to repeal the federal estate tax, led by Senate Majority Leader Bill Frist (R-TN), plan to bring a vote on the issue to the Senate floor as early as the week of May 8.  Shining a light on this effort, watchdog groups Public Citizen and United for a Fair Economy released a report on Tuesday detailing the multimillion-dollar lobbying effort by a handful of America's wealthiest families to repeal the estate tax.  These 18 families - who include the family that owns a 40-percent stake in Wal-Mart and the makers of M&M's, Gallo wine and Campbell's soup - have put together a half-billion-dollar lobbying coalition and financed ads aimed at making the public believe that the estate tax targets small businesses and family farmers.  In reality, the estate tax will affect only about one-fourth of one-percent of all estates in 2006.  Members of these 18 families, meanwhile, stand to gain a windfall of more than $70 billion in savings if they succeed with their campaign.  Over the first decade it takes effect, a repeal would cost the U.S. treasury about a trillion dollars.  United for a Fair Economy, along with the Alliance, is part of a broad coalition making up the Emergency Campaign for America's Priorities, which launched an opposing, anti-repeal, grassroots and paid media campaign on Thursday.  "An estate tax repeal is another way for the family that controls Wal-Mart to line their own pockets at the expense of others," said George J. Kourpias, president of the Alliance.  "Working families and union retirees would not be affected by an estate tax repeal."

Did You Know...
Forty percent of older Americans are unaware that the Part D enrollment deadline is May 15, according to a Kaiser Family Foundation survey conducted in April.  The study also found that nearly half of those asked - 47 percent - did not know there is a late enrollment penalty.

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