Friday Alert   June 8, 2007
Alliance for Retired Americans
888 16th Street, N.W. -  Washington DC, 20006 - (202) 974-8222 - www.retiredamericans.or

Campaign is Launched to Stop the Privatization of Medicare
On Thursday, leading Medicare experts and advocates launched a campaign at the U.S. Capitol to stop the privatization of Medicare.  The reason behind the campaign is a secret effort to privatize Medicare by the Bush Administration, just two years after President Bush unsuccessfully tried to privatize Social Security.  Speakers at the launch, including Edward F. Coyle, Executive Director of the Alliance, as well as other members of the Americans United for Change coalition, detailed how the Medicare Advantage program - a program which provides huge subsidies to big insurance companies - actually costs the Medicare program and taxpayers tens of billions of dollars.  "This year alone, American taxpayers will overpay the insurance industry $7.5 billion more than it would otherwise cost Medicare to serve the same people," Mr. Coyle said.  "And it is estimated that this cost will reach $160 billion over the next ten years."  A major battle looms in Congress over the future of the so-called "Medicare Advantage" program, which many advocates consider to be a form of corporate welfare that and is part of a wider, misguided privatization effort threatening the solvency of the Medicare Trust Fund.

2006 Alliance Voting Record Available on Website
The 2006 Alliance Voting record is now available at www.retiredamericans.org.  Many of the lawmakers who did the most damage to the health and economic well-being of America's seniors during the second session of the 109th Congress no longer hold office, according to the results.  See how your Senators and Member of Congress did!  Look for a complete analysis of the results in next week's Friday Alert. 

Employers Accept Part D Subsidy, Continue to Offer Drug Coverage
Most employers and other groups that sponsor retiree health benefits chose again in 2006 to continue offering retiree drug coverage and accept the Medicare Part D retiree drug subsidy (RDS), the Government Accountability Office (GAO) said in a May 31 report.  Employers could decide to accept the RDS subsidy or another Part D option for retiree plan sponsors.  In most cases, organizations choosing the RDS option could maintain coverage as they always had, as long as the coverage was at least actuarially equivalent to the standard Part D benefit.  GAO found that among private sector retiree benefit sponsors with 1,000 or more employees, 82 percent accepted the RDS for 2006.  Among private and public sponsors with 500 or more employees, 51 percent accepted the RDS for 2006.  More than 3,900 organizations were approved for the RDS in 2006, according to Centers for Medicare & Medicaid Service figures, while about 3,600 organizations were approved for 2007.  Based on GAO surveys, it was unclear whether employers and other retiree benefit sponsors would continue accepting the RDS and offering retiree prescription drug coverage in the future.  "The availability of the Part D benefit could serve as an incentive for some employers to stop offering their own drug coverage to retirees.  The subsidy could induce some employers to keep offering their own retiree coverage," said George J. Kourpias, President of the Alliance.  BNA's Health Care Policy Report describes the GAO report, which is available at www.gao.gov/cgi-bin/getrpt?GAO-07-572, in their June 4 issue.

Citigroup Pays $15.2 Million for Duping Retirees
The National Association of Securities Dealers (NASD) announced last week that Citigroup Inc., the nation's largest bank, will pay a $3 million fine and $12.2 million in restitution to settle a claim that hundreds of workers at BellSouth Corp. were misled into retiring early and opening brokerage accounts that cost them much of their retirement funds.  According to The Boston Globe, three brokers and two managers at a Charlotte, North Carolina, Citigroup office were also suspended and fined $295,000, after more than 200 people filed a class-action lawsuit regarding dozens of financial seminars for BellSouth workers in the Carolinas.  More than 400 workers, most in their mid-50s, with little investment experience and under $350,000 in retirement savings, opened over 1,100 accounts from 1994 to 2002.  The lawsuit alleged the workers were led to believe that their investments could earn a 12 percent return a year, but that the risks were not properly explained nor the fees disclosed. After a similar case last year involving Securities America Inc., part of Ameriprise Financial Inc., and 32 former Exxon Mobil Corp. workers, the NASD warned investors to be cautious of pitches guaranteeing secure, early retirement, without warning of associated risks.  "Duping workers out of their hard-earned retirement is inexcusable," said Ruben Burks, Secretary-Treasurer of the Alliance.  "This settlement is a sign that companies will not be able to get away with such deception any longer without the risk of serious penalties."

Open Enrollment Period Extended
The open enrollment period for the Alliance's insurance program to supplement Medicare has been extended to June 30, 2007 to ensure enough time for members to enroll.  During the open enrollment period, acceptance is guaranteed to all Alliance members and spouses age 65 and over, regardless of any pre-existing conditions - and the first month's premium is only $1.  To order an enrollment package or to get more information about the supplemental plans available, please call toll-free 1-866-298-9117 weekdays between 8:00 AM and 4:30 PM Central time.

Florida Alliance Holds Its Convention
The Florida Alliance held its annual convention in Orlando on Monday and Tuesday, re-electing all prior elected officers: Tony Fransetta, President; Marna Davidson, Treasurer; Barbara Devane, Recording Secretary; and James Weldon, Vice President.  Five new board members were elected as well.  Edward Coyle spoke, and delegates discussed topics that included universal health care, housing, voter rights, and fair counting in Florida elections.  The Florida Alliance has over 100 clubs statewide and 213,000 members.

Did You Know?
Of the $440,000 spent on health care during the average American's lifetime, $280,000 will be spent after age 65 (Fortune magazine).

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Alliance for Retired Americans 815 16th St, NW Washington, DC 20006 www.retiredamericans.org