2003-10-31 -- Alliance for Retired Americans on Medicare Restructuring
Update

Here's a brief summary of how negotiations on the Medicare bill fared
this week:

- Two key negotiators - Sen. Charles Grassley (R-IA) and Rep. Bill
Thomas (R-CA) - continued to publicly disagree on how to resolve
differences between the Senate and House versions. According to the
Washington Post, Grassley complained that he had been "ridiculed" by
Thomas, and later walked out of an evening session after the
Congressman snapped at a member of the Senator's staff.

 - Conferees decided not to include a House-passed provision that
would have given tax breaks to U. S. residents who set up Health
Savings Security Accounts (HSAs); and against adding co-payments for
home health care visits. Both provisions were opposed by the Alliance.
Some form of HSAs remain under discussion, however.

 - Negotiators were "near agreement" on including the provision in the
Senate bill that would speed generic prescription drugs to market. The
Alliance supports this provision.

 - Major unresolved issues still include: cost containment (limiting
Medicare spending if future cost increases are larger than expected);
privatization of Medicare (traditional Medicare would be forced to
compete directly with private health plans in 2010); means-testing
(charging different premiums based on income); reimportation (allowing
U. S. residents to purchase lower-cost medications from Canada and
other nations); and incentives for employers to encourage them to
continue offering retiree prescription drug coverage.

COYLE RESPONDS TO PRESIDENT BUSH'S MEDICARE REMARKS

Edward F. Coyle, Executive Director of the Alliance for Retired
Americans, says statements, made Wednesday, by President George W.
Bush regarding the proposed Medicare bill now being reconciled by a
conference committee, "prove that once again he is looking out for the
profits of the pharmaceutical and insurance industries instead of the
health care of seniors." Coyle called the bill "the first step toward
privatization of Medicare," and said, "when the President says he's
offering seniors choices, he means choices of HMOs and PPOs, and we
have seen private insurers fail seniors before."

WHAT DRUG BENEFIT WILL ACTUALLY COST SENIORS

George J. Kourpias, Alliance President, says, "It's time to tell older
Americans in plain English what the so-called prescription drug
'benefit' now being considered by House-Senate conferees will actually
cost them." So, here it is as simple as we can make it:

- The prescription drug benefit will not be a part of the traditional
fee-for-service Medicare program so in order to secure the benefit, a
beneficiary (that's you), will need to buy a separate plan. Because
the prescription drug plans will be provided by private insurance
companies, several different versions will be offered and the benefits
and premiums will vary and can change.

  - At a minimum, a Medicare beneficiary will pay a monthly premium of
$35 for the benefit. That's in addition to the $66.60 monthly premium
for Part B, effective January l, 2004.

 - There will be a $275 deductible that the beneficiary must pay
before the prescription drug benefit clicks in.

 - A beneficiary must pay 25 percent of his/her prescription drug
costs between $275 and $2,200.

 - A beneficiary pays all prescription drug costs in the "doughnut"
hole, that is between $2,201 and about $5,000, or until out-of-pocket
costs reach $3,600. - Seniors who have employer-provided prescription
drug coverage are in very real danger of losing it or having it
drastically reduced.

 - Average seniors whose medications cost $1,000 in a year will have
to pay $876 out-of-pocket under the proposal.

"Surely, there can no longer be any doubt that the prescription drug
benefit is a sham," says Kourpias, who urges seniors to "make your
opposition known to your elected representatives today."

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Alliance for Retired Americans
888 16th Street, NW
Washington, DC 20006
http://www.unionvoice.org/ct/81aGXMd1Y1Ls/