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EVEN MEDICARE CLUELESS ABOUT DRUG BILL
By Frank Kaiser

Does anyone know what's in the 1,100-page Medicare Drug Bill?

No one in Congress admits to even reading it.

Probably the only ones understanding this bill, that beginning January 1st pays for prescription drugs, are the lobbyists who wrote it. Regrettably, these pharmaceutical, insurance, and HMO pimps aren't talking. Their mouths are zipped into those Cheshire-cat grins so common in Washington, the twisted smirk that screams, “I got away with it!”

So it's no surprise that the Centers for Medicare & Medicaid Service's (CMS) new “Medicare & You” handbook slated for your mailbox later this year contains a few errors.

There's no mention, for example, that once your total drug spending reaches $2,250 - just when you really need a break - you must pay the entire cost of all prescriptions until they reach $5,100.

At this point, although your insurer will now pay 95 percent of future purchases, your out-of-pocket cost is $3,600, not including the $37 average monthly Part D premium (due even when you're paying out 100 percent of the cost of your prescriptions), the $250 deductible, annual enrollment fees, etc.*

This trifle that CMS finds unworthy of mention will devour over half my Social Security income.

The oversight is commonly called the “Donut Hole.“ Perhaps “Big Pharma Money Pit” is more apt. Since Congress outlawed negotiating drug prices giving Pharma a $400-billion windfall, we seniors will be paying far more per pill than anyone else on earth. A double payment, really, as the pharmaceuticals were likely researched and developed with our own tax dollars.

Democrats receiving the leaked draft of “Medicare & You” also complain that the handbook “prioritizes” managed-care plans over traditional Medicare.

Duh! What do they expect? This $855.7-billion swindle doesn't just favor HMOs, its primary purpose is to kill Medicare outright, leaving drug, insurance and managed-care companies to pick at the bones of this formerly great program and those it served.

CMS tags the new program, “Same Medicare. Better Benefits.” It's like telling the Japanese after The Bomb, “Same Hiroshima. More Room for Development.”

Sure, a sliver of this half-trillion dollar fiasco will undoubtedly help some of our neediest seniors. Individuals with incomes capped at $1,197/mo. ($1,604 for couples) are eligible for some assistance. For a full subsidy, individuals must have incomes of $1,077 or less per month ($1,444 for couples) and less than $6,000 in assets ($9,000 for couples). Cars and houses don't count.**

But for you, you, and you, bend over and kiss your healthy butt goodbye.

We're substituting a program that now works equally for everyone, and spends but a penny of every dollar on overhead, for one that cherry-picks patients, spends between 15 and 32 cents on overhead - money that's not spent on our welfare - and one in which HMOs can whimsically switch drugs and services at will.

Patient benefits will vary widely by region and insurer. Further tilting the playing field, HMOs get more than Medicare does for the same services. Congress calls this $12-billion giveaway a slush fund, HMOs call it a jackpot, but it's simply a disgrace to most of the rest of us.

Finally, for those of you smug in your excellent retiree drug plan, this bill pays your former employer big bucks to reduce your drug benefit to the stinking coverage the rest of us get. In fact, the Congressional Budget Office estimates that up to 25 percent of retirees with existing drug coverage through a former employer - 2.7 million seniors - will lose coverage altogether.

But didn't the President himself suggest that Medicare beneficiaries should not accept less than what lawmakers receive?

Yes, and before you could say “Dental and Vision Coverage,” Congress exempted itself from the Medicare bill, guaranteeing federal employees and members of Congress drug benefits generously worth about 50 percent more than the rest of us will get. And as there's no “Donut Hole” in the lawmakers' plan, CMS's senior moment is explained.

As our President said, “If it's good enough for the Congress, it's good enough for the senior citizens of America.”

I pray you remember this come November 2006.

* To see your yearly out-of-pocket drug costs under the latest Medicare drug benefit bill proposal, go to http://defazio.house.gov/medicarerxcalc.html.

** To learn if you qualify, download form here.

© 2005 - Frank Kaiser


10 REASONS WHY THE NEW
MEDICARE LAW SHOULD MAKE YOU MAD
from Institute for American's Future (www.ourfuture.org


1. TAX BREAK FOR THE RICH
The new Medicare law includes a $16 billion tax break for wealthy Americans - under 65 years old - who are enrolled in high-deductible health savings accounts that most people can't afford. This $16 billion giveaway has nothing to do with Medicare or with providing prescription drugs to America's seniors and people with disabilities.

2. DOESN'T LOWER DRUG PRICES

The new Medicare law actually has a provision that PROHIBITS Medicare from negotiating with drug companies for lower priced drugs for seniors and people with disabilities. Negotiation based on purchasing power (think 40 million beneficiaries strong) is a tried and true method of bringing down drugs costs used by the Veterans Administration and other government agencies.

3. $139 BILLION TO DRUG COMPANIES
Drug companies are set to reap an estimated $139 billion in new drug profits alone, according to an analysis from Boston University's Health Reform Program. Drug companies invested more than $650 million in politicians since 1997 - and fully 80% of the money went to Republicans. Not a bad return on investment.

4. $46 BILLION TO HMOS IN OVERPAYMENTS
The new law creates a new pay scale for HMOs and other private insurance companies - overpaying them to provide the same care to people on Medicare that the traditional fee-for-service program would provide for less…$46 billion taxpayer dollars worth of overpayments and other incentives.

5. FORCES PEOPLE INTO HMOS TO GET DRUG COVERAGE
People on Medicare will have to enroll in a private insurance plan (either a comprehensive care plan for all of their health care needs or a drug-only plan) to receive a prescription benefit. The federal Medicare program will only provide a federal backup plan if less than two private plans are available in the area.

6. LIFETIME PENALTY FOR NOT PARTICIPATING IN THIS “VOLUNTARY” BENEFIT
Even though politicians call this new law “voluntary”, there is a lifetime penalty for not signing up for a drug plan within 63 days of becoming eligible for the program. The amount of the penalty will be either whatever the HHS Secretary determines is “actuarially sound” or 1% of the monthly premium for every month eligible but not enrolled in a plan. This penalty is paid every month on top of the drug plan premium. This means if someone defers signing up for a drug plan for 5 years, they will forever pay a 60% penalty every month.

7. ENROLLEES ARE LOCKED INTO A PLAN & CAN ONLY CHANGE ONCE A YEAR
When people sign up for a drug plan, they only get to change their plan once a year or if they choose to quit the first plan and wait for a better one, they face a penalty (see #6) for every month they are not enrolled.

8. HMOS & PRIVATE INSURANCE COMPANIES CAN CHANGE THE DRUGS THEY COVER AT ANY TIME
The new Medicare law only requires private insurance companies cover two drugs per therapeutic class and leaves it to each company to define those drug classes. Companies are also free to change which drugs are covered by their plan at any time and are only required to post on the Internet when these changes go into effect.

9. EFFECTIVELY PROHIBITS REIMPORTATION OF DRUGS FROM CANADA AND OTHER COUNTRIES
People on Medicare will still be unable to legally import FDA-approved prescriptions from Canada and other countries.

10. AVERAGE PERSON ON MEDICARE WILL PAY MORE OUT OF THEIR OWN POCKET FOR PRESCRIPTION DRUGS THAN THEY DO TODAY
After all of the political wrangling and arm-twisting, the average Medicare beneficiary will actually pay MORE for their prescription drugs under the new law than they do today. The combined expense of the $250 deductible, the monthly premiums, cost sharing up to $2,250, 100% of drug costs from $2,251 to $5,100, and a portion of drug costs after that far exceeds what the average Medicare beneficiary without drug coverage pays today for their prescriptions.


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Have a great weekend, everyone!

Frank

Frank Kaiser frank@suddenlysenior.com

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