A government brochure states: Medicare Prescription Drug Coverage is insurance. Private companies provide the coverage. You choose the drug plan and pay a monthly premium. When you join a plan, Medicare helps pay the bill.
Turns out there are a few details the government forgot to tell us about, and none of them is good for uschoosing the appropriate plan, for instance. At present, some 130 different plans are being offered in Illinois. Not even a squad of Philadelphia lawyers could sort them out. You will have to do so. Not only that, but you will have to deal with several state agencies to try to determine your best choice.
Registration for Part D opens the 15th of this month. The program is touted as voluntary, yet if you dont sign up or sign up later, you are subject to a 1 percent penalty per month for life. The present deadline for enrollment is May 15 of next year. However, a congressional billthe Medicare Informed Consent Actwould extend the sign-up period to the end of next year. A newer version of the plan contains the cute provision that the feds can sign you up without your knowledge.
Notice the government brochure informs us that coverage under this plan will be furnished by private insurance companies. That means your benefits, unlike Social Security, will be controlled by private hands.
People are faced with a complicated, confusing and hard-to-understand program, said Steve Pittman, executive director of the Illinois Alliance for Retired Americans in Chicago.
Pittman notes the Bush plan covers only two drugs in each class, and the insurance company can change weekly what drugs are covered. A senior must be a member of a plan for at least a year, even though it doesnt furnish the drugs he or she needs.
The government claims participants in this plan will save 50 percent on drug costs. But there is a big clinker tied to that claim. First, remember that this program was drafted chiefly by the drug and insurance companies, not the lawmakers. Both of them are focused on profits, not your well-being.
IARA points out that under the plan, a senior will pay the first $250 and from $251 in drug costs, up to $2,250, the plan pays 25 percent. Now comes the clinker, the part Medicare doesnt talk about and neither do most insurersthe coverage gap. Its known as the doughnut hole. That means, if your drug costs run between $2,251 and $5,100 annually, the plan pays nothingzip. Then from an annual cost of $5,101 up, the plan will pay 95 percent.
About half of all recipients will fall through the doughnut hole. During that time ($2,250-$5,100), they will pay the monthly premium but get no benefit.
As it is, IARA argues the plans benefits are too small and will require seniors to spend more money than they do now without coverage. The insurance companies will decide what drugs are covered. IARA sees this as a first step toward total privatizing of the program.
For the first year under this plan, the annual premium amounts to $420. But, Pittman said, its estimated that drug costs, to which every other program cost is indexed, will rise 10 percent annually.
If you spent $1,200 on drugs last year, the same drugs will cost you $1,452 next year; and in 2,010, they will cost $2,126. This plan does nothing to reduce those soaring drug prices, and, in fact, it bars the government from doing what the Veterans Administration doesnegotiating with the drug companies for the lowest price. Had that feature been incorporated in this plan, the average drug cost for you would be about 40 percent less. The plan also bars importing cheaper drugs. So much for the touted free trade of Globalism.
What about those seniors with very limited incomes who are at or below poverty level? Will there be any help for them? The government says about one in every three seniors will qualify for extra help, and Medicare will pay all or most of their drug costs.
Pittman commented: Illinois original plan was better. Circuit Breaker and Senior Care (now Illinois Rx) passed wrap-around legislation for low-income seniors. Senior Care covers nearly all approved drugs. It pays 100 percent of the cost up to $1,750, then 80 percent is paid by the state and 20 percent by the senior. The plan paid out $300 million in 2004. However, the state was notorious for late payment to the pharmacies. Ask One Stop Pharmacy Food. Theyre closed.
Such circumstances are about to change, and probably not for the better, either. Senior Care and the pharmaceutical portion of Circuit Breaker will be merged to create Illinois Cares Rx, a new entity tied to the Bush program.
So how does the state plan fare under this merger? For low-income seniors in the state of Illinois, its going to mean some tremendous losses, Pittman said. To begin with, the Bush plan bars the use of Medicare funds to pay for drugs, and to add further stress for low-income seniors, it requires a means test to qualify for assistance. That assistance will be limited to 150 percent of poverty and less. The income level that disqualifies a person from help is as low as $6,000 for a single person and $9,000 for a couple. Assets counted include life insurance, burial insurance, a small savings account and personal property.
The plan also limits the drugs covered under the assistance portion of the program.
In contrast, 370,000 Illinois seniors are eligible for comprehensive drug benefits from Senior Care. That includes people with incomes up to 200 percent of the poverty rate. Senior Care will pay out $200 million in drug costs this year, according to IARA. The federal government pays 50 percent of the cost, but that will not continue after 2007.
By now, those promised savings should be looking pretty skimpy. The drug companies and the insurance industry, however, stand to come out pretty well. One insurance industry expert said that in the first two years of the program, beginning Jan. 1, 2006, Its almost impossible for a (prescription drug plan) to lose money.
Since 1999 to 2004, the drug industry has given $47 million to federal campaigns and political parties. The Republicans got 77 percent of that, and George W. Bush raked in more than $418,000 from the pharmaceutical industry, while Sen. John Kerry, in his presidential bid, got $128,000. In 2003, the industry had 824 lobbyists in Washington to bargain with the 535 members of Congress.
Just look at how they advertise on TV. It seems like three-quarters of the ads aired are for drugs. Considering the War on Drugs, those ads are only for legal drugs, but the profits, illegal or legal, inspire the oil companies to ask, Are we charging enough?
By the way, the big four oil companies profits were up for just the last quarter, way up. Consider BP, up 165 percent; Chevron-Texaco, up 294 percent; Conoco-Phillips, up 44 percent; ExxonMobil, up 125 percent.
Oh well, back to the other big hand thats in our pockets. Drug makers profits that year were $210 billion. Estimated profits under the Bush plan for a 10-year period: $139 billion. The average senior citizen in this country makes about $14,251 annually.
The lead sponsor of pro-drug legislation for the plan in the U.S. House was Rep. Dennis Hastert, Republican from DuPage County, a fine fellow Illinoisian. He ranks sixth in the House for lifetime contributions from drug makers. The lead sponsor in the Senate, Sen. Bill Frist, ranks 15. Then we have Illinois Sen. Dick Durbin, whos aiding and abetting making all the vitamins by prescription only, so the big drug makers can monopolize that market at an exorbitant price as well. Say goodbye to your local health food store. They cant pay like the big boys can.
The New York Times, in an article on Part D last August, quoted Frederick Graefe, a lobbyist for hospitals and medical equipment manufacturers. You see a real surge in health care lobbying because that] ]>