Friday Alert   July 21, 2006
Alliance for Retired Americans
888 16th Street, N.W. -  Washington DC, 20006 - (202) 974-8222 - www.retiredamericans.or

Americans United Shines Light on Doughnut Hole Problem
Americans United, a coalition that includes the Alliance and whose mission includes fighting Social Security privatization and fixing Medicare Part D, held a news conference at the U.S. Capitol on Tuesday to announce the results of a new report on the “doughnut hole.”  The report by the Campaign for America’s Future found that the average Medicare-eligible American will fall into the doughnut hole on September 22 this year.  Additionally, the doughnut hole coverage gap, which currently affects those with annual drug costs between $2,250 and $5,100, will increase over time as the catastrophic coverage threshold rises annually, swallowing up more seniors.  As a result, 55 percent of those who enter the doughnut hole will not be able to escape it.  Rep. Jan Schakowsky (D-IL) spoke at the event and pushed for passage of the Alliance-supported H.R. 752 that she co-sponsored.  The legislation would require that Medicare offer a drug benefit and negotiate for drug discounts for enrollees in order to reduce costs, and would provide a permanent, guaranteed alternative to private insurance plans.  “There are ways to fix the doughnut hole situation,” said Ruben Burks, Secretary-Treasurer of the Alliance.  “The Prescription Drug Savings and Choice Act (H.R. 752) is one solution that would lower drug prices and fill in the gap in coverage with the savings."  Rep. Marion Berry (D-AR), sponsor of the legislation, also spoke at the event and was joined by Rep. Darlene Hooley (D-OR).

Insurers Unsure of Their Own Drug Plans
A report by the U.S. Government Accountability Office concluded that Medicare beneficiaries face challenges in obtaining the information needed to make informed choices.  Investigators made 900 calls to 10 of the largest drug plan sponsors.  Representatives from the plans provided accurate and complete responses to only one-third of the calls.  Two of the 10 companies gave inaccurate or incomplete information at least 75% of the time.  Perhaps most unacceptable is that insurers failed to provide the correct cost information more than 70 percent of the time, with the disparity between stated cost and actual cost often totaling thousands of dollars a year.  “Because of the poor performance of call centers, beneficiaries may often choose drug plans that cost more or provide less coverage than expected,” the report stated.

Drug Industry Benefiting on Backs of the Poor
The already lucrative pharmaceutical industry has discovered a new way to increase earnings.  The automatic transfer of 6.5 million low-income people into the Part D program from Medicaid has created much larger than expected profits for drug makers, with some estimates stating the windfall could be up to $2 billion this year.  Because Medicaid, which by law received the lowest available drug prices, no longer buys the medicines, drug companies are able to charge insurers higher prices for the drugs offered under Part D plans.  The drug industry has raised wholesale prices of brand-name drugs an average of 3.6% since Part D went into effect.  However, while insurers are currently paying more for prescription drugs, they are also benefiting significantly from Part D.  UnitedHealth Group reported this week a 26% rise in its second-quarter profit, in part because of its new Part D business.  Net earnings rose from $770 million a year earlier to $974 million.  “This is the kind of information the drug and insurance companies want to keep secret,” said George J. Kourpias, President of the Alliance.  “It proves the point we’ve been making all along.  Part D was not created to help seniors have access to affordable drugs; it was created as a gift to drug industry cronies.”

Alliance People
Recently, Edward Coyle, Executive Director of the Alliance, traveled to Las Vegas for the national conventions of the Communications Workers of America and the Teamsters unions.  George Kourpias will be in Las Vegas on July 24 to give remarks before the annual convention of the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union.  The Alliance would also like to welcome two new state presidents, Fern Osborne in Colorado and Jean Friday in Pennsylvania.  “I look forward to helping seniors in the state of Colorado,” said Fern Osborne.  Added Jean Friday, “With this upcoming election being so important, I can only say yes to helping the Alliance.”  Frank Lay is retiring as the Colorado president after years of faithful service.

National Convention Coming in September
The National Convention is coming up September 5-8, 2006 in Washington, D.C.  Political commentator Mark Shields is a confirmed speaker, and many other key Congressional leaders and political thinkers will share their wisdom for 2006.  Members will elect a president and secretary-treasurer, and at-large members will also elect six community-based board members.  Nominees must be members in good standing of the National Alliance.  Any self-enrolled (at-large) member may attend the meeting and is eligible to vote.  Register for the convention by calling 1-888-373-6497 or visit www.retiredamericans.org.  Attendees must register separately with the Washington Hilton and Towers (1-888-324-4586) by August 3 to get the Alliance Convention hotel rate.  The very low discount hotel rate has been extended for two weeks ONLY until August 3.  After August 3, the hotel rate rises to $179/night plus tax.  The Alliance has no control over the rate after August 3.  The Alliance is waiving the late registration fee for the convention, which will remain at $80.  Please register for the convention and your hotel as soon as possible.

Did You Know...
When informed that a permanent repeal of the estate tax would cost $1 trillion between the years 2011 and 2021, 91% of respondents said they would prefer to use those funds to shore up the finances of Social Security and Medicare, according to a recent poll on the Alliance website.  A total of 503 votes were collected.  To vote in the new poll regarding stem cell research, visit our website.

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