MEDICARE - Money for Nothing But The Drugs Aren't Free

[Guest guest]

MEDICARE

Money for Nothing But The Drugs Aren't Free

Sen. Ted Kennedy (D-MA) - a longtime advocate for a meaningful prescription

drug benefit - is expected to address Medicare and health care issues in

his speech to the Democratic National Convention tonight. His address is

well timed: yesterday, the Bush administration released 1342 pages of

proposed regulations for the final prescription drug benefit which takes

effect in 2006. Despite their length, the regulations conveniently defer

many important decisions until after a 60-day comment period.

-->One thing that is clear: while the prescription drug benefit will be a

boon to some large corporations, many American seniors may see their

existing prescription coverage reduced or eliminated. Those who do enroll

in the Medicare prescription drug program will be slapped with considerable

costs when they can least afford it.

REWARDING COMPANIES FOR REDUCING DRUG COVERAGE: Starting in 2006, the new

law will enable large corporations to collect massive government subsidies

even if they significantly rollback their retiree prescription drug

benefit. The new regulations make corporations eligible for government

subsidies of up to $940 per retiree as long as they provide drug coverage

that mimics the Medicare drug law. The proposed rules give companies four

different ways for companies to demonstrate they are doing so.

-->But most companies already provide drug coverage which is superior to

the new Medicare benefit. Thus, companies could collect the subsidy even as

they roll back coverage - at a total cost to taxpayers of $89 billion over

ten years!!

MAJOR BUSH CONTRIBUTORS PROFIT HANDSOMELY: Some of the corporations that

benefit most are major contributors to President Bush, who aggressively

lobbied for the bill's passage. For example, General Motors - whose

executives have donated more than $110,000 to Bush's presidential campaigns

(versus $9,000 to Kerry) - estimates that the new Medicare law will be

worth $4.1 billion to the company. Similarly, Excel Energy - whose

executives have donated more than $22,000 to Bush's presidential campaigns

(versus $500 to Kerry) - expect to save $64 million.

ADMINISTRATION TELLS SENIORS TO STOP COMPLAINING:

While the administration found plenty of cash for corporations, many

seniors with high drug costs will be left in the lurch. After paying an

average of $420 in premiums and a $250 deductible, seniors are still

responsible for paying up to 25% of their drug costs up to $2,250 a year.

But seniors with drug costs in excess of $2,250 a year, even though they

will continue to pay premiums and have satisfied their deductible, will

receive no assistance whatsoever for their next $2850 in prescription drug

costs. This gap, known as " the donut, " has many seniors justifiably

concerned about their ability to pay their drug bills in the event of a

serious illness.

-->But Health and Human Services Secretary Tommy dismissed their

concerns saying " Only a pessimist would look at a doughnut and complain

about a hole. "

SOURCE: From today's American Action Progress Fund