Friday Alert   December 1, 2006
Alliance for Retired Americans
888 16th Street, N.W. -  Washington DC, 20006 - (202) 974-8222 - www.retiredamericans.or

Higher Percentage of Seniors Voted for Democrats in '06 Than in '04
In the midterm elections of 2006, Democrats won the vote of those 60 and older by 4%, 52% - 48%, according to a New York Times exit poll.  Of union retirees, 72% voted for the Democrats.  The margin for Democrats among all voters 60 and older was up 6% over 2004.  This election was only the second time since 1992 that the party had won the older Americans' vote - in 2000, Democrats also won 52% of the vote.  In contrast to the results for older Americans, voters under age 30 favored Democrats by a much wider margin of 61% - 39%.  Republicans did win one sub-group of the over-60 demographic, whites, by a margin of 53% - 47%.  Women aged 60 and older voted for Democrats by a margin of 53% - 47%, while older African-Americans favored Democrats 90% - 10%.  "The Alliance was an important factor in those results," said George J. Kourpias, President of the Alliance.  "Older voters knew the country was on the wrong track."

CMS Ad Deceives Readers
The Centers for Medicare and Medicaid Services (CMS) have placed an ad in Parade Magazine and other media outlets addressing the Part D open enrollment season that ends on December 31.  The ad features a checklist where the second step incorrectly states, "If you are satisfied with your current cost, coverage and the customer service you receive, you don't need to do anything."  Nowhere in the ad does it explain that costs and coverage have changed for many of the prescription drug plans.  "CMS should explicitly mention that many plans have changed and while you may be happy with your current coverage, you need to make sure it will be there in 2007," said Edward Coyle, Executive Director of the Alliance.  "The misleading nature of this ad follows the trend of CMS not revealing the entire truth about Part D to the public."  Last year, while the Bush administration and CMS officials were touting the benefits of Part D, CMS failed to mention that nearly 7 million beneficiaries would fall into the donut hole.  "Part D is still flawed, and deceitful ads such as the one by CMS won't cover that fact," added Mr. Coyle.

Drug Industry Braces for Change
Troubled by the results of the 2006 elections, top executives from two-dozen drug companies met in Washington, D.C. last month to strategize, according to the New York Times.  In an effort to stop Congress from letting the government negotiate lower drug prices for millions of Medicare beneficiaries, the pharmaceutical industry has been hiring new Democratic lobbyists, contacting old friends in the Bush administration and Congress, and re-establishing ties with organizations of patients who depend on brand-name drugs.  Many industry insiders acknowledge that the House is likely to pass a bill intended to drive down drug prices, but they are determined to block the legislation in the Senate.  If they are unable to accomplish that outcome, lobbyists are counting on a veto by President Bush.  With 49 Republicans in the Senate next year, drug companies are confident that they can round up the 34 votes normally needed to uphold a veto.

Bush's Scaled-Down Plans for Social Security - Another Scheme Underway?
Thursday's Wall Street Journal reported that the White House is getting ready to abandon personal retirement accounts in an attempt to cut a deal on the solvency of Social Security.  President Bush has said that he would like to reach an agreement with Congress on Social Security as part of his legacy before he leaves office.  Without admitting that private accounts will not be pursued, White House aides say that dropping them is the price Democrats will demand in order to come to the table.  Last week, when Treasury Secretary Henry Paulson said that there would be "no preconditions" regarding Social Security negotiations, he was most likely signaling a retreat on privatization.  The White House hope is that, in return for a concession on private accounts, Democrats would agree to reduce the growth of future Social Security benefits and allow some form of the "progressive indexing" that Bush endorsed in 2005.  Currently, benefits are initially calculated based on a wage index.  Progressive indexing would continue wage indexing of benefits for low earners, impose price indexing of benefits for high earners, and use a mix of both for average wage earners.  Ultimately, progressive indexing would impose substantial benefit reductions on average wage earners.  "We need to remain vigilant and keep an eye on those whose schemes would adversely affect older Americans," said Mr. Kourpias.

Health Insurance Premiums Rise with Executives' Pay
According to the Indianapolis Star, health insurance CEOs are continuing to feast on executive pay.  The paper listed the total compensation from 2004 to 2005, including salary, bonus, restricted-stock awards, long-term incentive payouts, stock-option gains and other payments, for several insurance executives.  The list included a startling $135.5 million for William McGuire, the UnitedHealth Group CEO who later resigned amid a scandal over the timing of stock-option grants.  Also listed: $57.5 million for John Rowe of Aetna, $42.1 million for Edward Hanway of Cigna, $14.1 million for Larry Glasscock of WellPoint, and $5.7 million for Michael McCallister of Humana.  A separate survey by the advocacy group Families USA found annual premiums for family coverage in Indiana rose almost 77 percent from 2000 to 2006. A third survey of 1,201 adults by ABC News, Kaiser Family Foundation and USA Today found that 50 percent of respondents named excessive profits by drug and insurance companies as one of the biggest factors in rising costs.  WellPoint attributes rising costs to increased use of the health-care system.  "The survey by ABC, Kaiser, and USA Today is telling," said Ruben Burks, Secretary-Treasurer of the Alliance.  "The public knows the true reason behind the high prices."

Alliance Loses Strong Supporter
The Alliance lost a good friend and passionate activist with the death in October of Thomas (Tom) Deary.  Mr. Deary worked as an organizer for the Communications Workers of America (now IUE-CWA) before taking on an active role with the Alliance in New Hampshire.  Mr. Deary was also a member of the American Legion, Veterans of Foreign Wars, Nashua Labor Council and the Executive Council of the New Hampshire AFL-CIO.  The Alliance will miss Mr. Deary greatly and will always remember his warmth, humor and role in strengthening our organization.

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