The wrong medicine for Medicare

The President signed sweeping Medicare prescription drug legislation in December that fundamentally undermines the Medicare program and undercuts employer-provided retirement health insurance, say the AFT and other labor groups.

The final bill became a bonanza for drug and insurance companies and a far cry from the original effort to reduce prescription drug prices for seniors. The bill specifically prevents Medicare from using the market power of more than 40 million beneficiaries to negotiate lower drug prices, prevents the reimportation of less costly drugs from Canada and other countries, and dilutes earlier strong language that provided for the increased availability of generic drugs.

More unsettling, however, is that the bill directly threatens the viability of the Medicare program, which serves more than 85 percent of the nation's senior citizens. The legislation provides vast subsidies to HMOs and threatens to privatize the traditional Medicare program in 2010 by substituting a premium "voucher" in place of Medicare insurance. Sen. Edward Kennedy (D-Mass.), who led an unsuccessful effort to filibuster the bill, called it the first step toward "a total dismantling of Medicare."

The bill passed by a 54-44 Senate vote after the legislation squeaked by the House in a roll-call vote of 220-215. AFL-CIO president John Sweeney has denounced the measure, calling it a "partisan proposal that, under the guise of creating the much-needed and long-promised prescription drug benefit, would reward the pharmaceutical companies and HMOs that are the political backers of the plan's sponsors."

He also charged that the AARP's endorsement of the bill was an "extremely misguided decision of that organization's leadership that is not supported by its membership." AARP says 15,000 of its members have quit as a direct result of the endorsement. About 3,000 of them have joined the Alliance for Retired Americans, the AFL-CIO's organization for union and community retirees.

The bill ultimately may jeopardize the continuation of retiree health plans provided by employers, warns the AFT. A Congressional Budget Office (CBO) analysis shows that employers will drop this essential coverage in large numbers.

"Our affiliates often have had to sacrifice salary increases and other benefits for our members to secure retirement health benefits that give members adequate security for their healthcare as they age," noted AFT president Sandra Feldman in a Nov. 19 letter to members of Congress. "This bill undermines such health benefits, which are an essential part of a retirement package."

Although the bill contains both a direct subsidy and a tax subsidy to encourage employers to maintain retiree health benefits, the nonpartisan CBO reports that these subsidies will not prevent 2.7 million retirees from losing their employer-provided drug coverage as a result of this legislation. Further, a special tax subsidy is available only to private employers but not to public plans. "Since public plans provide retiree health coverage for our members, their retiree health insurance coverage is directly jeopardized," said Feldman.

La. retirees help elect gov.

Retired members of the United Teachers of New Orleans (UTNO) may have made the difference in a tightly contested gubernatorial race in November. The retirees were key to UTNO's get-out-the-vote strategy for Election Day, which resulted in a victory for Louisiana Lt. Gov. Kathleen Blanco, a Democrat.

With 52 percent of the vote, Blanco, the first woman to hold the governor's seat in Louisiana, beat Republican Bobby Jindal, who was endorsed by outgoing Gov. Mike Foster. Blanco's victory was a bright spot for Democrats, who recently have lost gubernatorial seats in California, Kentucky and Mississippi.

On Election Day, the retirees assisted the UTNO office and Blanco's campaign staff with canvassing, making phone calls and tracking voter turnout to gauge where more attention was needed.

"It was important to get members out to vote because this election [will] foreshadow 2004," says Judith G. Johnson, president of the UTNO retiree chapter. And, says Johnson, they realize that "if you don't get involved, you get left behind."

The decisions of elected officials affect the lives of members, and it's important to have political leaders who understand the vital issues, says Leatrice R. Roberts. The UTNO retiree and member of the AFT standing committee on retirees and retirement adds that "the retirees have a long history of political involvement in the union."

Having the retirees available to help with duties like phone banking and going to the candidate's strategy meetings proved very beneficial, says Myrtis Johnson, director of UTNO's committee on political education. It's difficult for bargaining unit members to be there during the day to participate in these activities, but the retirees can, she observes. "The union appreciates being able to call upon the retirees to step in and lend a hand."

The UTNO retiree chapter has about 185 members, many of whom not only volunteer for political campaigns but in the schools as well. "As retirees, we are still part of the community and have something to give, and it's good to see the results of giving just a little time," Johnson says.