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2003-12-05 -- ARA exposes AARP lies

ALLIANCE FOR RETIRED AMERICANS
SETS RECORD STRAIGHT ON MEDICARE BILL,
CHALLENGES FALSE 'FACTS'

"The Alliance for Retired Americans adamantly opposes the Medicare
Prescription Drug, Improvement and Modernization Act of 2003 recently
enacted by Congress," says President George J. Kourpias, "and feels it
is imperative older Americans and their families know the truth about
the bill before it goes into effect.

The Alliance disagrees with other organizations regarding the
so-called 'merits' of the bill and cannot, in good conscience, allow
them to continue misinforming the public." Kourpias notes that a
full-page ad by AARP, which appeared in major newspapers around the
country this week, claimed to offer "just the facts" about the bill.
"These 'alleged' facts are far from the truth," he says, "and seniors
should know that they're being fed false 'facts.'"

What older Americans really should know:

  *  Challenged Fact: The bill protects traditional Medicare.
This bill really undermines the traditional Medicare program by
forcing it to compete, beginning in 2010, with private insurance
plans. Supporters tout this as "only a demonstration project," but it
is the beginning of the privatization of Medicare. Private insurance
companies will have the option to "cherry-pick" enrollees, that is
they will accept healthier seniors, leaving sicker seniors in the
traditional program . Unlike the traditional program, private insurers
do not guarantee premiums, can drop patients and change coverage. The
bill also establishes a "means test" for the Medicare program under
which higher income seniors will pay higher premiums for Part B,
ranging from 40-220%.

  *  Challenged Fact: All Medicare beneficiaries will have drug
coverage.
But in order to get such coverage you must either leave the
traditional Medicare program and join a Medicare Advantage plan (this
replaces the failing Medicare+Choice program that replaced the failed
Medicare HMO program) or buy a stand alone policy from a private "Plan
Sponsor." The private "Plan Sponsor" is either an insurance company
licensed in the state or a company that meets the solvency standards
established by the Centers for Medicare and Medicaid Services (CMS).

  *  Challenged Fact: The new drug benefit is voluntary.
Seniors are forced to use private insurance companies for drug
coverage (see above). In addition, Medigap policies that now provide
prescription drug coverage must cease offering such benefits.

  *  Challenged Fact: The bill helps those who need it most.
While the bill does provide subsidies for low-income seniors, there
are multiple levels of assistance depending on whether an individual
is eligible for Medicaid and the extent of his or her income and
assets. For example, it establishes a $6,000 ($9,000 for a couple)
"assets test" for those under 135% of established poverty level which
will disqualify 2.8 million very low-income seniors for assistance.

  *  Challenged Fact: The bill protects those with the highest drug
costs.
Yes and no. Medicare will cover 95% of a beneficiary's drug costs that
exceed $5,100, but will pay nothing for drugs costing between $2,250
and $5,100. This huge gap in coverage - coupled with the higher
premiums - will increase financial hardships for seniors with multiple
health issues who live on fixed incomes. The gap in coverage will
leave half of seniors without drug coverage for part of each year.

  *  Challenged Fact: The bill protects retiree coverage.
Only partially. The bill provides a subsidy to sponsors of qualifying
private employer retiree health plans, but that amount is 28% of
"allowable retiree costs" in excess of "cost threshold" up to amount
of "cost limit." For 2006, the individual cost threshold is $250 and
cost limit is $5,000. Allowable retiree costs exclude administrative
costs, net of rebates, charge backs, discounts, etc. The bill only
requires the plan to provide drug coverage that is "at least
actuarially equivalent to the standard prescription plan" which means
many companies could, and probably will, reduce current coverage. The
Congressional Budget Office estimates that 2.7 million retirees who
currently receive drug coverage through a former employer will lose
those benefits.

  *  Challenged Fact: The bill provides new preventive services.
Several important diagnostic screenings for seniors are funded, as
well a new "Welcome to Medicare" physical examination for new
beneficiaries, but reimbursements to physicians who administer biotech
medications and reimbursements for products such as home oxygen are
reduced.

  *  Challenged Fact: Discount card.
This is misleading. There's no guarantee that the predicted 25%
discounts will materialize. The percentage of discounts offered on the
cards will depend on negotiations between the private providers of the
cards and the pharmaceutical companies. Many of the drug companies
will opt not to participate in the discount card program, and those
that do participate are unlikely to provide discounts sufficient to
make a real difference to seniors facing major prescription drug
expenses. These "token" discount cards represent the only assistance
seniors can expect until 2006 when the bill is implemented.

ALLIANCE TO RALLY AGAINST MEDICARE "PRIVATIZATION" BILL

The Alliance for Retired Americans will participate in a Capitol Hill
rally against the Medicare "Privatization" Bill on Monday, December 8,
at 2:30 p.m. in Room 216 of the Hart Senate Office Building (corner of
Constitution Avenue and Second Street, NE).

Alliance members and other seniors and their allies are urged to
attend the rally and make their opposition to the Medicare bill known
to Members of Congress. Speakers at the event will include: Sen.
Edward M. Kennedy (D-MA), House Democratic Leader Nancy Pelosi (CA)
and other Congressional leaders who oppose the bill. For more
information, contact Keith Wallington at 202/974-8233.

ANGRY AARP MEMBERS TURN TO ALLIANCE

Edward F. Coyle, Executive Director of the Alliance for Retired
Americans, reports that more than 3,000 AARP members - angry at the
organization for supporting the Medicare/Prescription Drug bill - have
become members of the Alliance. "We welcome with open arms any older
American who shares our goals and wishes to help us convince Congress
to get back to work and pass a real bill," says Coyle.

SCULLY CASHES IN BEFORE INK IS DRY ON MEDICARE BILL

Thomas Scully, Administrator of the Centers for Medicare and Medicaid
Services, (CMS) didn't even wait for President Bush to sign the
Medicare bill before he jumped ship to join the private sector. After
shepherding the disastrous bill through Congress, Scully submitted his
resignation, effective December 16, and, according to the New York
Times, is the "subject of a bidding war among five firms hoping to
hire him to advise clients affected by the measure."

Ruben Burks, Secretary-Treasurer of the Alliance for Retired
Americans, questions the propriety of Scully's action. "It seems
organizations that represent pharmaceutical and private insurance
companies just can't wait to hire Tom Scully. Some are said to be
willing to pay him as much as five times his CMS salary which is
$134,000 per year. It appears as though he is being paid off for all
those billions of dollars the drug industry and private insurance
companies will reap as a result of the bill." According to Burks,
"Scully has shown hostility toward the Medicare system for some time.
In April 2003 he called Medicare "a dumb system" and "an unbelievable
disaster" at a meeting in Pennsylvania. President Kourpias wrote HHS
Secretary Tommy Thompson on May 1, 2003 asking if these were the views
of the Department and the Bush Administration on Medicare. There has
been no response to the letter," says Burks.

MORE REPERCUSSIONS FROM FTAA MEETING

Hostilities between organized labor and the Miami (FL) police that
began last month over the Free Trade Area of the Americas (FTAA)
meeting are unlikely to cool off any time soon. The United
Steelworkers of America (USWA) has called for a Congressional investig
ation of Miami police for "intimidating union members and others
critical of FTAA." In a letter to Congressional leaders, USWA
International President Leo W. Gerard says, "The fundamental rights of
thousands of Americans were blatantly violated, sometimes violently by
the Miami police, who systematically repressed our Constitutional
right to free assembly with massive force, riot gear and armaments."
He called for Miami police chief John Timoney to be fired.

Joining the Steelworkers in this battle is the Florida Alliance for
Retired Americans (FLARA), which reports that many of its members
experienced rough treatment at the hands of the police. The Florida
Alliance is also demanding that Miami-Dade Mayor Alex Panelas resign
because "he sat back and did nothing during the FTAA protests while
seniors were being attacked and pepper-sprayed and wrongly arrested,"
says FLARA President Tony Fransetta.

Ruben Burks, Secretary-Treasurer of the Alliance for Retired
Americans, says the announcement on Thursday by President George W.
Bush that he is lifting the tariffs imposed on foreign-made steel 20
months ago is "just another example of why protests such as those in
Florida are essential if we are to protect American jobs." Burks
warns, "The future of pensions, health benefits, and guaranteed
security from social programs is also at stake in the trade
globalization battle. We have to keep saying 'NO' to NAFTA, 'NO' to
FTAA, 'NO' to WTO and 'NO' to politicians who care more about trade
with foreign countries than about hardworking Americans."

Alliance for Retired Americans
888 16th Street, NW Washington, DC 20006
http://www.unionvoice.org/ct/gdaGXMd1Y1se/