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February 6, 2004
Alliance Launches Campaign Against Misleading Medicare Ads
The Alliance for Retired Americans has expressed outrage that the Bush Administration is using taxpayer money to promote the new Medicare prescription drug law in a deceptive way. The $12.6 million advertising campaign — entitled "Same Medicare. More Benefits" — is slated to spend $9.5 million on TV ads and $3.1 million for newspaper, radio and internet ads. The campaign was produced by the media company conducting the Bush-Cheney 2004 re-election effort. The Alliance has repeatedly denounced the new plan as "hopelessly flawed" and opposes the use of taxpayer monies to finance what it calls a "blatantly political Medicare ad campaign." The Alliance calls on all seniors to act today to let the White House and their elected representatives know how they feel about this issue. Activists are encouraged to visit the Alliance website to send a letter to the White House as well as their Representative and both Senators.
"The use of these ads by the Bush administration to 'rebut criticism' of the fatally flawed Medicare drug law is nothing but pure propaganda designed to distort the facts and further confuse seniors," says Alliance Executive Director Edward F. Coyle. "It's proof that those who chose profits over people will stop at nothing in their continued drive to shortchange seniors in favor of rewarding HMOs, drug companies and wealthy special interests. What's really called for is a 'Medicare Real World' ad campaign that speaks to the fact that the new law prohibits the government from negotiating lower drug prices, or that the prices of drugs will rise faster than seniors' incomes, or that the millions of seniors will suffer from lack of drug coverage. These are the truths this administration refuses to admit to."
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March 26, 2004
Medicare "Scandals" Continue to Divide Congress
The "scandals" involving the new Medicare law continue to escalate, further splitting Congress along party lines:
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Richard Foster, chief actuary of the Centers for Medicare and Medicaid Services (CMS), told a hearing of the House Ways and Means Committee this week that he gave the White House his analyses last June, showing that the proposed Medicare legislation "would cost 25 to 50 percent more" than the public figures released by the Bush Administration. During the hearing, Foster reiterated his claim to investigators that Thomas A. Scully, his boss at the time, repeatedly warned him he would be fired if he released the higher figures to Members of Congress. Scully, who has since left CMS, denies the charges, but Foster insists that Scully said he was "acting under direct White House orders." Four Democratic Senators — Hillary Rodham Clinton (NY), Edward M. Kennedy (MA), Frank Lautenberg (NJ) and Debbie Stabenow (MI) — this week sent a letter to Attorney General John Ashcroft requesting a Department of Justice inquiry into whether the Administration violated federal law in withholding the information from Congress.
Findings of Medicare Trustees Report "Misleading" Says Kourpias
The trustees who monitor Medicare and Social Security released their annual report this week, claiming Medicare's financial condition has deteriorated drastically since last year. "There is more to the story than is being reported," says George J. Kourpias, President of the Alliance for Retired Americans. "The findings are very misleading."
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When the Trustees assert that Medicare is "going broke", they are referring to Part A — the Hospital Insurance Trust Fund — which is financed by payroll taxes. According to the report, Part A will become insolvent in 2019 — seven years earlier than projected last year. It is simply not true, however, that the Hospital Insurance Trust Fund is going broke. The trust fund remains fiscally sound. The reason for the alleged crisis is that the HI Trust Fund's surplus is being diverted to pay for tax cuts and other general operations of the government, eventually, the money will have to be repaid to the trust fund.
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Part B, which covers doctor's services, outpatient care and other medical services, is financed by a combination of premiums from recipients and general revenues and, therefore, cannot go broke.
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The new prescription drug benefit will be paid out of general revenues and cannot be blamed for any alleged accelerated insolvency of Part A, despite what the trustees claim.
An analysis of the Trustees Report by the Center on Budget and Policy Priorities finds, "The claim that the Part A shortfall has more than doubled is based on serious misuse of data. Trustees have traditionally used a time frame of 75 years when comparing projections, but this year they projected the shortfall over an infinite horizon. This is clearly an apple-to-oranges comparison." According to the Center, the Bush Administration, which appointed most of the trustees, seems willing to "understate costs when it suits its purposes (as with its tax cuts and Medicare drug bill) and overstate figures when it suits its purpose, as appears to be the case here."
"No one denies that Medicare needs to stay on the road to solvency, but predictions of its imminent demise are premature," says Kourpias. "In 1982, the trustees predicted the trust fund would be exhausted in 1987; in 1993, the trustees said it would go broke in 1999. It did not happen then and it will not happen in 2019." Edward F. Coyle, Alliance Executive Director, blames the Bush administration's "mismanagement of the program as well as its failed economic policies" for the professed "shortened lifespan" of the program. Other experts agree. "Medicare is no closer to insolvency than the Defense Department," says Robert Hayes, President of the Medicare Rights Center. Health care economist Uwe Reinhardt of Princeton University, in an interview with the Los Angeles Times, says reaction to the report is "much ado about nothing."
There was no change in the status of the Social Security program which trustees say is solvent until 2042, the same as predicted last year.
Beware of Drug Discount Card Scams
On Thursday, Tommy G. Thompson, Secretary of the U.S. Department of Health and Human Services, announced that 28 private companies have been chosen to provide prescription drug discount cards authorized under the new law. The cards will become available in May and go into effect in June. Thompson's announcement comes at a time when there is growing concern that older Americans are being tricked into giving their Social Security numbers and bank information to telemarketer and door-to-door salesmen who are pretending to be selling Medicare discount cards. "Seniors are advised to beware of anyone who calls or shows up at their door offering to sell them Medicare prescription drug discount cards," warns Edward F. Coyle, Executive Director of the Alliance. "Medicare drug cards will not be sold via any telemarketer or door-to-door salesman. Beginning in April, legitimate drug card sponsors will be listed at
www.medicare.gov/AssistancePrograms/home.asp.
In what can only be seen as more bad news for older Americans hoping for assistance with the cost of the medications, Families USA, reports that between January 2002 and January 2003 prices for prescription drugs used most often by seniors rose 3.5 times faster on average than overall inflation, making new discount cards "vulnerable to price increases by the drug industry."
Conferees Fail To Agree on Pensions
House and Senate negotiations still have not been able to agree on pension funding legislation, leaving companies with traditional pension plans facing a choice of adding millions of dollars to pay for future benefits, or freezing or closing their plans. Unless Congress acts, these private pension systems will have to contribute $80 billion more to their pensions over the next two years. Some of the contributions are due in April. Conferees are considering legislation that would require the Treasury Department to put in place new rules that tie the pension funding formula to corporate bond yields instead of the yield on the 30-year Treasury bond as is now the case. The change would allow companies to use a higher interest rate in calculating their liabilities, thereby reducing the amount of cash they have to contribute to their plans. A temporary pension funding formula expired the end of 2003. The other major sticking points in the negotiations are provisions backed by organized labor that would provide $1.6 billion in additional relief to airline and steel-company pensions and provisions to help multi-employer pension plans avoid unnecessary excise taxes.
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