Friday Alert   September 15, 2006
Alliance for Retired Americans
888 16th Street, N.W. -  Washington DC, 20006 - (202) 974-8222 - www.retiredamericans.or

Medicare Changes: Increased Fees for Everyone - Not Just the Wealthy
Most seniors will have to pay 5.6 percent more for basic Medicare coverage next year, officials announced in The Washington Post on Wednesday.  However, premiums for more affluent beneficiaries will increase by as much as 83 percent, because the federal government for the first time will require wealthier people to pay more.  Some Medicare advocates say the higher premiums will prompt some wealthy people to drop out of Medicare, leaving the program to serve poorer, sicker people, and undermining Medicare's broad political support and its finances.  "Unfortunately, if seniors start to drop out of Medicare, Congress will be more likely to cut benefits later.  This is another step in dismantling Medicare," said George J. Kourpias, President of the Alliance.  The surcharge rises with income, and will be much higher in 2008 and later years. The standard monthly premium for Part B, which covers doctor visits and outpatient hospital care, will rise to $93.50 from $88.50 this year, according to Mark B. McClellan, head of the Centers for Medicare and Medicaid Services (CMS).  Individuals with an annual income of more than $80,000 (or more than $160,000 for married couples) will pay monthly premiums of $106 to $162.10, depending on income.  The surcharge was established under a little-noticed provision of the 2003 law that added a prescription drug benefit to Medicare.  About 1.5 million of the 42 million Americans on Medicare will have to pay the higher premiums based on income.  McClellan said the income-based premiums will save the government $7.7 billion over five years and more than $20 billion over a decade.  The standard premium has shot up an average of 12 percent a year since 2001, when it was $50 a month.  The premium is set each year to cover about 25 percent of projected spending under Part B of Medicare, with general tax revenues paying the remaining 75 percent of the cost.

The changes will be some of Mr. McClellan?s final acts at CMS.  He has overseen the agency since 2004, but announced last week that he will leave by early October.  The CMS administrator oversees Medicare, Medicaid and the federally subsidized State Children's Health Insurance Program (SCHIP), which together serve about 90 million Americans and account for more than $535 billion a year in federal spending.

Bush Promise to Privatize Social Security Not Forgotten
President Bush renewed his vow to privatize Social Security, saying that in 2007 he "will be able to drain the politics out of the issue," because it will not be an election year.  In an interview with the Wall Street Journal, Bush was confident that the Republicans would prevail in this fall's elections and support his Social Security plan in the next Congress.  In 2005, an overwhelming number of Americans opposed his plan to create private accounts.  At the same time, Senate Minority Leader Harry Reid (D-NV) and House Minority Leader Nancy Pelosi (D-CA) have kicked off a nationwide "Golden Promise" campaign, calling on members of Congress to sign a petition and pledge to oppose any effort to privatize Social Security.  "We must stick together and urge our members of Congress to sign the Golden Promise pledge," said Ruben Burks, Secretary-Treasurer of the Alliance.

GOP Plans More Negative Ads Than Ever
Republicans are planning to spend the vast majority of their considerable financial war chest over the final 60 days of the campaign attacking Democratic House and Senate candidates over personal issues and local controversies, GOP officials said in The Washington Post on Sunday.  The National Republican Congressional Committee (NRCC) plans to spend more than 90 percent of its $50 million-plus advertising budget on what officials described as negative ads.  Because challengers tend to be less familiar than incumbents, they are more vulnerable to having their public image framed by the opposition through attacks and unflattering personal revelations.  GOP officials said internal polling shows Republicans could limit losses to six to 10 House seats and two or three Senate seats if the strategy works.  Democrats need to pick up 15 seats to win control of the House and six to regain power in the Senate.  Republicans plan to attack Democratic candidates over their voting records, business dealings, and legal tussles, the GOP officials said.

Donut Hole Day Quickly Approaching
September 22 marks the day when the greatest number of Medicare Part D participants will fall into their plan's donut hole, thus losing their prescription drug coverage until they've spent $3,600 of their personal savings to cover their medication needs.  Advocacy groups across the country are planning events, ranging from town hall meetings to donut hole deliveries, in order to draw national attention to the day that will place up to 7 million Americans at dire health and financial risk.  To find out about events in your area, contact your local Alliance leaders.

Alliance to Enhance Community-Based Activities
The leadership of the Alliance said last week that it wants to significantly increase its community-based activities next year.  At a meeting of the community-based delegates to the national convention, Executive Director Edward Coyle said that he intends to ask the new community-based board members to begin a top-to-bottom review of the program in consultation with community-based members from around the country.  The results of this study will be implemented in 2007.  "Seniors all across this country are ready to go to work on issues they care about," Mr. Coyle said.  "The Alliance for Retired Americans ought to be the organization through which they do this."

Did You Know...
A recent poll on the Alliance website found that 85% of respondents do not agree with President Bush's decision to veto a bill allowing additional federal funding for embryonic stem cell research.  Visit www.retiredamericans.org to vote in the new poll regarding the upcoming mid-term elections.

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