Friday Alert   August 18, 2006
Alliance for Retired Americans
888 16th Street, N.W. -  Washington DC, 20006 - (202) 974-8222 - www.retiredamericans.or

White House Pushes to Cut Medicaid, Despite Lack of Support
As the White House takes aim to reduce Medicaid payments to hospitals and nursing homes, governors and members of Congress from both parties are preparing to fight against the planned cuts.  Medicaid helps 50 million low-income people pay for health care through funding from both the federal government and the states, and seniors in nursing homes are the greatest number of Medicaid beneficiaries.  However, the White House plan would weaken Medicaid by reducing the federal government's payments to many public hospitals and nursing homes and limit the states' ability to finance Medicaid through taxing health care providers.  The loss of Medicaid funding from the federal government would put pressure on states not only to reduce Medicaid benefits, but also to restrict eligibility and lower payments to health care providers, according to The New York Times.  At the same time, the number of doctors who refuse to take new Medicaid patients is on the rise.  A study by the Center for Studying Health System Change found that the percentage of physicians not accepting new Medicaid patients has risen from 19.5 to 21 percent over the past few years in large practices, and from 16.2 to 24 percent in small group practices.  Medicaid's reimbursement rate was considered the main reason that more doctors refuse to see new Medicaid patients.  "The Bush administration claims they need to reform Medicaid," said Edward Coyle, Executive Director of the Alliance.  "I guess their idea of 'reform' is jeopardizing the lives of low-income seniors and making it more difficult for Medicaid patients to see a doctor.  Congress already rejected these Medicaid cuts, anyway."

GlaxoSmithKline to Reimburse $70 Million in Landmark Settlement
Pharmaceutical company GlaxoSmithKline has agreed to pay $70 million in a nationwide class-action settlement to resolve claims that it artificially inflated drug prices.  The company will reimburse both patients and third-party payers, such as health plans and union benefit funds, who were overcharged for Zofran and Kytril, medications commonly used in cancer treatments.  In 2001 the Prescription Access Litigation Project, of which the Alliance for Retired Americans is partnered, filed the lawsuit contending that there is an industry-wide scheme to defraud consumers by charging inflated prices for critical medications.  GlaxoSmithKline was one of 19 defendants named in the suit, known as the "Average Wholesale Price" (AWP) case.  Some experts view the settlement as a move toward a more transparent system that will prevent drug companies from charging inflated prices that have no relation to the actual cost of a drug.  "This agreement marks a tiny step in the right direction to ensure Americans pay a fair price for the drugs they need," said Ruben Burks, Secretary-Treasurer of the Alliance.

Drug Industry's Excessive Profits Could Fill Doughnut Hole
A new report from the Center for Economic and Policy Research, "The Origins of the Doughnut Hole: Excess Profits on Prescription Drugs," by economist Dean Baker, finds that drug companies will make billions in excess profits under Part D.  Through calculating the difference between the average cost of common drugs used by seniors and the cost when purchased through the Veterans Administration, the report found that for many of the drugs, the prices paid by insurers participating in Part D are more than twice as high as prices paid by the Veterans Administration.  Profits for the drug industry as a whole will reach more than $50 billion in the first full year of Part D, according to the report.  Pfizer stands to make $1.2 billion off Lipitor and $585 million on Zoloft.  Wyeth will enjoy a profit of $1 billion on Protonix and Merck will pocket $1.6 billion from Zocor.  The drug industry's $50 billion profit is more than twice the size of the Medicare doughnut hole.  On Wednesday, House Minority Leader Nancy Pelosi (D-CA) trumpeted a plan to make prescription drugs more affordable for seniors by allowing Medicare to negotiate for lower prices.

Alliance News
Yesterday in Washington, D.C., Alliance President George J. Kourpias addressed the International Association of Bridge, Structural, Ornamental, and Reinforcing Iron Workers, the newest affiliate to join the national Alliance.  "Politicians have rigged these crazy Medicare and Social Security schemes so that future retirees will really take the hit.  They think you aren't watching them the way seniors might be," he warned the Iron Workers.

On Monday, August 21st in Delray Beach, the Florida Alliance will host a "Health Care for All" and Social Security event.  Attendees scheduled to appear include Sen. Bill Nelson, Rep. Robert Wexler, state Senate Minority Leader Ron Klein, state Senator Rod Smith, and Tim Mahoney, congressional candidate for Florida's 16th Congressional District.

Pelosi, Reid, Begala, Shields to Headline Alliance National Convention
Come and join your fellow activists at the Alliance's 2006 National Convention, September 5-8 in Washington, D.C.  A massive Lobby Day and Social Security rally will highlight this mid-term Election year meeting, which has a theme of "Fighting for Retirement Security."  House Minority Leader Nancy Pelosi, Senate Minority Leader Harry Reid (D-NV), as well as political commentators Paul Begala and Mark Shields are confirmed speakers, and many other key Congressional leaders and political thinkers will share their insight.  Members will elect a president and secretary-treasurer, and at-large members will also elect six community-based board members.  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) to reserve an on-site hotel room.

Did You Know...
According to a Wall Street Journal article on retirement planning, there is a 50% chance that one member of a healthy couple, both age 65, will live to 92, and a 25% chance that one will live to age 97.

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