Friday Alert   May 18, 2007
Alliance for Retired Americans
888 16th Street, N.W. -  Washington DC, 20006 - (202) 974-8222 - www.retiredamericans.or

Chrysler Deal Brings Retiree Health Care Issue to the Front and Center
DaimlerChrysler announced on Monday that Cerberus Capital Management would pay $7.45 billion for an 80 percent stake in Chrysler, Detroit's third-biggest automaker.  Cerberus has specialized in buying distressed businesses such as the Alamo and National car rental companies, and then turning them around through heavy cost-cutting.  The firm owns about 50 companies. Chrysler retirees will now rely on Cerberus to provide the estimated $18-$19 billion in retiree health care benefits that they have been promised.  "It is no secret that generations of hard workers helped build Chrysler.  Like everyone, retirees hope for fair treatment," said Ruben Burks, Secretary-Treasurer of the Alliance.

Senators Who Weakened Drug Bill Got Millions from Industry
Senators who raised millions of dollars in campaign donations from pharmaceutical interests secured industry-friendly changes to the recent drug-safety bill, according to public records and interviews last week in USA Today.  The bill, which passed 93-1, grants the Food and Drug Administration (FDA) broad new authority to monitor the safety of drugs after they are approved. However, the powers granted to the FDA in the bill's original version were pared back, and a measure that blocked an effort to allow drug importation passed, 49-40.  The 49 senators who voted "Yes" received about $5 million in campaign contributions from the pharmaceutical industry since 2001, according to the nonpartisan Center for Public Integrity.  Sen. Richard Burr (R-NC), one of the 49 who voted for the amendment, received over $500,000 in campaign contributions from drug executives and political action committees from 2001 - 2007, the most of any member of the Senate.  "The big drug companies are at it again.  Twice in the past few weeks, they've persuaded enough U.S. senators to stop two common-sense ways to lower prescription drug costs," said George J. Kourpias, President of the Alliance.  "One prohibits Medicare from negotiating bulk discounts from drug manufacturers.  Every consumer understands that you pay less when you buy in bulk.  Act Two took place last week when many of these same senators then proceeded to effectively block seniors from purchasing safe drugs made in other countries."

Prices for Most Common Medicare Drugs Continue to Rise
Costs for many of the most commonly prescribed medications are continuing to rise under Medicare's new prescription drug plan, a study published recently in the Washington Post concludes.  Government investigators found that "prices for 10 of the most prescribed brand-name medications have shot up an average of 6.8 percent since December under Medicare private insurance plans, while wholesale prices for the same drugs have risen just 3 percent."  Over the same period of time, plan premiums have already jumped 13 percent.  While both drug manufacturers and health insurers noted that overall program costs remain low due to a push toward generic drugs, the investigators note that the drugs tracked in the study were 2004's top 10 sellers, and only one has a generic alternative.  In 2007 alone, while name-brand drug costs were predicted to increase 7 percent over the entire year, they had nearly climbed that high by mid-April.  "We have all heard the promises, but the truth is that Medicare Part D is not bringing down prescription drug prices," said Edward F. Coyle, Executive Director of the Alliance.

Senate Holds Hearing on Hard-Sell Insurance Tactics
State insurance regulators testified on Wednesday before the Senate Special Committee on Aging, chaired by Sen. Herb Kohl (D-WI).  They provided evidence about unethical or illegal practices that sales agents allegedly have used in their states to enroll Medicare beneficiaries in private Medicare Advantage plans, the Raleigh News and Observer and Kaiser Daily Health Report reported.  Medicare Advantage plans are privately sold, government subsidized health care plans intended to provide services in addition to Medicare.  At the center of the abuse reports is private, fee-for-service plans. These policies offer fewer restrictions on doctors and hospitals and often come with benefits that standard Medicare does not cover, such as dental or vision services.  They differ from basic Medicare in that a private company manages the entire benefit.  In some cases, sales agents have violated Medicare rules - which they are obliged to follow because they sell Medicare products - by showing up uninvited outside senior centers to recruit enrollees.  Some agents do not seem to understand the product, or intentionally mislead beneficiaries about what the plan provides.  Several seniors discovered their signatures had been forged on application forms.  Consumer advocates say these plans are ripe for abuse because the federal government reimburses them at a higher rate than other policies, and sales commissions are generally higher.

New York Alliance Names New Officers
The New York State Alliance held its biennial convention on Wednesday and elected Jim Wood, President; Nancy True, Secretary; Dorothy Breen, Treasurer; Paul Schuh, Labor Vice President; and Molly Krakowski, Community Vice President.  Fred Nauman will be President Emeritus and remain a member of the New York State Board and national Alliance Board.  The convention passed a resolution commending Mr. Nauman for his role and hard work as founding president.  Richard Fiesta, Director of Government and Political Affairs for the national Alliance, updated the convention on federal legislative issues.

Many Grandparents are Jumping on Planes to Provide Child Care
Countless grandparents are making extraordinary efforts to help their children balance work and home, but The New York Times recently profiled a new type of caregiver, the "incredible flying granny nanny."  With high day care costs prohibitive for many parents and the cost of airfare often less than a professional facility, some grandmas and grandpas have taken to intercity commuting to care for their grandchildren.  According to the U.S. Census Bureau, grandparents cared for 19.4 percent of preschoolers with working mothers in 2002, more often than child care (19 percent), fathers (18.2 percent), or private help (9 percent).  This involvement marks a significant jump from 1995 when they ranked third behind fathers and day care centers.  The increase is attributed to a generation with the time and financial resources to help, and does not reflect the full range of grandparents going to extremes or offering assistance in other ways.

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