Print- Congress Tackles Medicare Drug Proposals
- Senators Compromise on Generic Drug Marketing
- DTC Drug Advertising Tripled Between 1996 and 2001
- Employers Passing Larger Share of Drug Costs to Workers
- Health Cost Increases May Be Slowing
- Senate Aging Committee Hears Proposals on Assisted Living
- Maine Governor Revises Maine Rx
- Pa. Governor Plans To Expand Senior Rx Drug Programs
- Pet Care Savings
- Quote of Note
- Web Site of the Week: http://www.nutrition.gov/
Both houses of Congress are now debating Medicare prescription drug benefits, with passage of a bill this summer now considered likely. In the Senate bill, a standard drug benefit would be available for an estimated $35 monthly premium and a $275 annual deductible. Medicare would pay half of an individual's drug costs between $276 and $4,500, nothing from $4,501 to $5,800, and 90 percent for additional costs. In the House bill, the drug benefit premium is also $35, but the deductible would be slightly lower at $250. Initial coverage would be significantly higher, with Medicare paying 80 percent of drug costs between $251 and $2,000 a year, nothing from $2,001 and $5,100, and all costs above that would be means tested. The benefit would cost the government about $408 billion over 10 years and begin in 2006. The House plan includes a higher out-of-pocket spending limit for individuals earning more than $60,000 a year and couples earning more than $120,000. It also contains a time bomb that could lead to privatizing Medicare beginning in 2010. Both bills are unacceptable in their current forms. The Senate bill (S.1) is on a faster track, so you must act now to protect your benefits. The AFT is asking all members to contact their U.S. Senators today with this message:
- Support the Stabenow amendment that would allow seniors to choose a Medicare drug benefit option and not be forced into HMOs, or PPOs.
- Support the Kennedy/Rockefeller amendment to change the definition of “true out-of-pocket costs” so that retirees who now have health insurance coverage will be eligible for the catastrophic drug benefit and retiree health plans will be protected. (Without this change, the Congressional Budget Office estimates that 37 percent of retirees with employer coverage will lose it.)
- Support the Daschle amendment to stabilize the prescription drug premium and limit state variations to only 5 percent.
- Support amendments to eliminate the gap in coverage.
You can use AFT’s toll free hotline 800-839-5276 or send an e-mail or fax through the AFT Contact Congress feature on our Web site: http://www.unionvoice.org/legislativeaction/home.html
SENATORS COMPROMISE ON GENERIC DRUG MARKETING
The Senate health committee has approved a bill banning deals between drug makers to delay or halt the launch of a generic medication. Currently, drug makers can delay the entry of cheaper generic drugs by filing patent-infringement suits against a competitor, which automatically delays the introduction of a generic version for 30 months for each claim. A bipartisan group of lawmakers, including Sens. Charles Schumer (D-N.Y.), Judd Gregg (R-N.H.), John McCain (R-Ariz.) and Edward Kennedy (D-Mass.), on June 5 announced compromise legislation designed to allow lower-cost generic drugs to more quickly reach the market. The compromise legislation would close a loophole that allows brand-name drug makers to delay generic versions of their drugs for 30 months each time the brand-name companies sue for patent infringement. Instead, brand-name companies could only delay marketing for one 30-month stay in such cases. The compromise also removes a controversial provision that would have allowed generic drug companies to legally challenge frivolous patents. The measure now would allow generic companies to try to remove inappropriate patents by filing a counterclaim against a brand-name drug company, after the brand-name drug maker sued a generic drug company for patent infringement. President Bush has also proposed regulations to limit companies to one delay and plans to increase funding to the Food and Drug Administration to expedite the approval of generic drugs.
More info: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=18103
DTC DRUG ADVERTISING TRIPLED BETWEEN 1996 AND 2001
Pharmaceutical companies tripled their direct-to-consumer advertising budgets in recent years, from $800 million in 1996 to $2.7 billion in 2001, according to a study released on June 11 by the Kaiser Family Foundation. The report, conducted by researchers at Harvard University and the Massachusetts Institute of Technology, found that the marketing blitz launched by drug makers accounted for about 12 percent of drug spending growth in 2000 and allowed drug companies to bring in $4.20 in increased sales for every $1 spent on consumer drug ads. Promotions directed at physicians accounted for 86 percent of overall marketing spending, with 55 percent used for free drug samples, 29 percent spent on drug representative contact with physicians and 2 percent allocated to medical journal advertising. DTC advertising accounted for 14 percent of marketing activities, according to the study.
More info: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=18234
EMPLOYERS PASSING LARGER SHARE OF DRUG COSTS TO WORKERS
In an effort to reduce the cost of prescription drug coverage, employers and health insurers nationwide are requiring employees to pay more for medications or are eliminating coverage for drugs they deem non-essential. While employee co-payments for drugs have been increasing for several years, some companies recently have implemented drug benefit deductibles or offered coverage for some drugs only if a less-expensive treatment is tried first and is ineffective. Further, some plans have begun to encourage or require employees to use mail-order pharmacies that offer drugs at lower prices than retailers. Some companies are also switching to co-insurance coverage—in which employees pay a portion of the cost of drugs—or have enacted tiered co-pay systems in which payments are less for lower-cost treatments. The Federal Employees Health Benefits Program—the largest health plan in the United States—attributed almost one-third of the 11.1 percent increase in its premiums this year to increased prescription drug costs. Nationwide, the amount spent on prescription drugs in 2002 was $160.7 billion; that amount is expected to increase to $445.9 billion by 2012, according to federal statistics.
More info: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=18235
HEALTH COST INCREASES MAY BE SLOWING
U.S. healthcare costs decreased last year after five years of increase, which was prompted by a decrease in growth of prescription drug and hospital costs, two of the main drivers of medical inflation. Healthcare costs in 2002 decreased to 9.6 percent from 10 percent in 2001, according to a study in the Journal of Health Affairs; the U.S. consumer price index increased by about 2.4 percent over the same period. The trend of decreased healthcare costs may continue in 2003. The healthcare component of the CPI increased 2.1 percent for the three-month period that ended in April, compared to a 4.4 percent increase a year earlier. However, healthcare costs are growing more than five times as fast as the pace of price increases for all goods and services, excluding the volatile food and energy categories. A decrease in the growth of prescription drug costs has contributed in large part to the recent decrease in the healthcare cost inflation rate. U.S. prescription drug costs increased 12 percent to $192.2 billion in 2002, compared to a 17 percent increase to $172 billion in 2001, according to consultant IMS Health.
More info: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=18206
SENATE AGING COMMITTEE HEARS PROPOSALS ON ASSISTED LIVING The Assisted Living Workgroup presented its to report to the Senate Special Committee on Aging on April 29. The coalition of almost 50 groups of healthcare professionals, providers, consumer advocates and representatives of the disability community called for: creation of a national Center of Excellence in Assisted Living to analyze and suggest regulations to states and Congress; written disclosure of all assisted-living facility costs, services and policies, including a minimum notice for any changes or terminations; regulations to make sure that trained and awake staff are on duty at all times and that medicines are kept and administered safely; increased federal and state funding for the Long-Term Care Ombudsman Program, which resolves complaints and represents residents' interests; regulations to ensure that services advertised in brochures are consistent with those listed in residents' contracts; expansion of state regulations for staff training in dealing with Alzheimer's patients who live outside special care units; and better public access to regulations, surveys and inspection reports. Although two-thirds of states have passed legislation or issued regulations to license or monitor assisted living, concerns have been raised over the treatment of residents at some facilities, which are not subject to the same regulations as nursing homes. Nearly 1 million U.S. residents live in the nation's 36,399 assisted-living facilities, an increase of 48 percent since 1998, according to the National Academy for State Health Policy.
More info: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=17460
MAINE GOVERNOR REVISES MAINE Rx
Maine Gov. John Baldacci (D) announced in early June that he will modify Maine Rx and submit a proposal for a cheaper, redesigned discount prescription drug plan called Maine Rx Plus. The announcement followed the U.S. Supreme Court's 6-3 ruling last month to lift an injunction on Maine Rx. Under that program, enacted in 2000, the state would have negotiated with pharmaceutical companies for rebates on prescription drugs equal to or larger than those set by federal law for the Medicaid program. The state would have passed the rebate on to pharmacies, which would have offered a discount to state residents without prescription drug coverage, regardless of income. The Maine Rx Plus program is projected to cost $800,000 in the next fiscal year and $2 million the following year—a lot less than Maine Rx's projected cost of $4.5 million annually. Because the Supreme Court questioned the lack of income caps in the initial program, Maine Rx Plus would be limited to people earning up to 350 percent of the federal poverty level—$31,430 for an individual or $42,420 for a couple. An estimated 275,000 people would be eligible for the Maine Rx Plus drug discounts, fewer than the 325,000 people who would have been eligible for the original program. Maine Rx Plus would offer larger discounts on prescription drugs than those expected under Maine Rx. The new discounts, which supporters of the plan say would range from 15 percent to 60 percent, initially would be funded in full by the state until Maine is able to negotiate rebates with drug makers, at which point the program would expand to offer other discounts. The new program would offer discounts on drugs classified as effective and reasonably priced under the Medicaid program, not just those drugs produced by manufacturers that signed agreements with the state.
More info: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=18089
PA GOVERNOR PLANS TO EXPAND SENIOR Rx DRUG PROGRAMS
Pennsylvania Gov. Ed Rendell (D) on May 29 announced a $320 million five-year proposal to cover an additional 100,000 people under the state's prescription drug assistance programs for seniors—called Pharmacy Assistance Contract for the Elderly, or PACE, and PACENET programs. The governor's proposal would boost enrollment in the programs from 221,000 people currently to 332,000 residents by increasing income eligibility in PACE from $14,000 to $14,500 for an individual and from $17,200 to $17,700 for a couple; raising the maximum income eligibility in PACENET from $17,000 to $22,500 for an individual and from $20,200 to $30,500 for a couple; boost co-payments under PACE from $6 to $8 per prescription; require physicians to prescribe the cheapest therapeutically equivalent medications among certain classes of drugs; limit the amount physicians charge for generic drugs to the maximum prices allowed in federal health programs; decrease deductibles under PACENET from $500 to $480 annually and allow them to be paid in $40 monthly installments, as opposed to a lump sum; and require drug companies to provide discounts of 22 percent to the programs, up from the current 17 percent rate.
More info: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=18064
PET CARE SAVINGS
AFT PLUS now offers AFT retiree members two different Union Privilege plans to help you save on veterinary bills. First is our new pet insurance. This true pet insurance allows you to continue with your current veterinarian. Policies available include older pets, accident-only coverage and more. For specifics, call 866-473-7387 or go to www.unionplus.org/pets and click on Pet Health Insurance. The second new program is called Pet Assure Veterinary Care. This plan allows you to save 25 percent on your bill at participating veterinarians for a monthly fee (discounted 40 percent for AFT members). Savings include preventive care, shots, surgery, medications and more. To sign up or to find participating veterinarians in your area, call 888-789-PETS (7387) or go to www.unionplus.org/pets. Use code UP2003 to get your AFT savings!
QUOTE OF NOTE
"The playing field must be level. How can we test whether private plans are a better deal for beneficiaries than traditional Medicare if the legislation provides extra subsidies or benefits to these private plans? If private plans are more efficient as claimed, then the best test is to let the market work.”
Marilyn Moon
Senior Fellow
Urban Institute
WEB SITE OF THE WEEK: http://www.nutrition.gov/ Remember the old slogan “You are what you eat”? Find out how the foods you eat measure up on the Healthy Eating Index created by the U.S. Department of Agriculture. You’ll get your personal score and, if you need it, advice on how to improve your diet.
Contributors and sources: Shantel Edmonds, Bill Cunningham, Congress Daily, Portland Press-Herald, Dallas Morning News, Public Citizen, Washington Post, Newsday, Philadelphia Inquirer, Boston Globe, Congress Daily, New York Times, Kaiser Health Policy Report. Frank Stella, editor; Renee Turner, design.
