• New AFT Retirement Committee Appointed
• Medicare Drug Plan Could Cut Social Security Benefits
• Medicare Beneficiaries View New Law Unfavorably
• Kerry Blasts Bush on Reimportation at Alliance Endorsement
• Australian Free-Trade Agreement Bans Drug Reimportation
• The Broken Promises of George W. Bush
• GASB Changes Reporting Rules on Retiree Health Benefits
• LaCour Elected to AFL-CIO Executive Council
• 9 Million Fewer Got Employer Health Insurance in 2003 than 2001
• Time To Change Your Homeowners Policy?
• Quote of Note: U.S. Rep. Rodney Alexander (R-La.)
• Web site of the Week:
  www.Bedandbreakfast.Com

NEW AFT RETIREMENT COMMITTEE APPOINTED
The AFT executive council appointed the 2004-06 AFT retirement committee at the council's post-convention meeting July 18. Committee members represent retirees in all AFT divisions and retiree groups from Boston to Alaska.

New York State United Teachers second vice president Dick Iannuzzi, the new chair and liaison to the AFT executive council, is a veteran of more than 30 years' teaching at the elementary level. Mostly recently, he served as president of the Central Islip Teachers Association and a NYSUT board member. Iannuzzi oversees both the NYSUT retiree program and its member benefits program. Other members include:

The committee's first order of business in November will be to determine retirement committee priorities for the next two years.

MEDICARE DRUG PLAN COULD CUT SOCIAL SECURITY BENEFITS
When Medicare's full drug benefit begins in 2006, premiums will likely devour a growing share of a beneficiary's Social Security check, thanks to an omission in the law. Currently, Medicare deducts premiums for doctors' visits, or Part B, from Social Security benefits. But federal law prohibits premium increases from exceeding Social Security's annual cost-of-living adjustments (COLA). Under the 2003 Medicare law, premiums for the drug benefit, or Part D, will not be similarly capped and have the potential to rise far above inflation-adjusted COLAs. That's because the law ties increases in Part D premiums to increases in drug price inflation, not overall inflation. This year, drug price inflation is running three times that of overall inflation, a fairly typical ratio. In 2006, when the drug program begins, 37.2 percent of an average Social Security check will be consumed by Medicare premiums, deductibles and co-payments. For an 85-year-old, those premiums and other costs will eat up 42.7 percent of the average Social Security check. And since the law doesn't do much to stop drug price inflation, in 2025, a 65-year-old will be paying 52.6 percent of his or her Social Security income, and an 85-year-old will be paying 63 percent. Rep. Jo Ann Emerson (R-Mo.) said that reductions in COLA would be a huge problem for her constituents, who "would be up in arms if they knew" about the situation.

More info:

http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/07/21/national1307EDT0563.DTL

MEDICARE BENEFICIARIES VIEW NEW LAW UNFAVORABLY
Nearly half of Medicare beneficiaries have an unfavorable view of the new Medicare law, but a majority would prefer that Congress make changes to the law rather than repeal it, according to a survey of 1,223 Medicare beneficiaries conducted between June 16 and July 21 by the Kaiser Family Foundation and the Harvard School of Public Health. The survey found that 47 percent of beneficiaries had an unfavorable view of the law, compared with 26 percent who had a favorable view. Twenty-five percent said they did not know enough about the law to form an opinion. Sixty-six percent of respondents said that Congress should change the law to address its shortcomings, while 10 percent favored repealing it altogether, and 13 percent favored making no changes to the law. The AFT convention recently passed a resolution calling on Congress to repeal and replace the law. Participants who said they view the law unfavorably most frequently cited inadequate help with drug costs as a primary reason. Other reasons included the belief that the law is too complicated for beneficiaries to understand and that it benefits private health plans and drug companies too much. Sixty-two percent of respondents said they do not know enough about the new prescription drug benefit to decide whether they will enroll when it takes effect in January 2006. Sixteen percent of respondents said they plan to enroll in the benefit, and 21 percent said they will not enroll. Fifty-three percent of respondents said the new prescription drug cards are not worth the trouble because they don't do enough to help people with their drug costs, and they are too confusing to use, according to the survey. Seventy-nine percent of respondents said they favor repealing a provision in the Medicare law that prohibits U.S. residents from reimporting lower-cost prescription drugs from Canada and other nations unless the HHS secretary certifies their safety.

KERRY BLASTS BUSH ON REIMPORTATION AT ALLIANCE ENDORSEMENT
The Alliance for Retired Americans officially endorsed the Kerry-Edwards ticket on Aug. 11 in Henderson, Nev., at a town hall meeting that drew more than 400 Alliance members and senior activists. UFT-Nev. Retiree coordinator Rich Miller led the AFT contingent of about 20 retirees. Democratic presidential nominee Kerry told the activists that he would seek to change the new Medicare law and that President Bush has stood in the way of the legalization of the reimportation of lower-cost prescription drugs from Canada and other nations. "I'm for a real prescription drug benefit that covers people without a great big hole in it," Kerry told the seniors, "without a pricing scheme that actually has you pay more money than you ought to for these drugs, and without a structure that forces 3.8 million Americans out of Medicare and forces them into HMOs." Kerry said that, as president, he would seek to legalize reimportation, allow Medicare to negotiate directly with pharmaceutical companies for discounts on prescription drugs and allow generic medications to reach the market earlier to help reduce prescription drug costs for seniors. The senior vote is critical in the presidential election. In 2000, 72.2 percent of registered seniors ages 65 to 74 voted, and this same group accounted for 25 percent of all the votes cast for president that year. The Alliance has launched a get-out-the-vote effort in five of the 16 key "battleground" states, including Florida, Pennsylvania, Ohio, Arizona and Nevada.

AUSTRALIAN FREE-TRADE AGREEMENT BANS DRUG REIMPORTATION
President Bush signed a free-trade agreement, August 3 between the United States and Australia that bans the reimportation of prescription drugs covered by the Australian pharmacy benefits scheme (PBS), the government-approved list of prescription drugs. It also requires Australia to consult with the U.S. government, allowing the U.S. to object to decisions made by Australia on whether to list new medications on the PBS. The Australians, however, resisted additional U.S. demands to revise the process used to determine the price of medications on the PBS. The agreement also includes a U.S. provision that provides patent holders with the authority to control sales of their products in the United States--a move prohibited by the bipartisan Dorgan-Snowe bill, which the AFT supports and the administration and Republican leadership in Congress oppose.

THE BROKEN PROMISES OF GEORGE W. BUSH
Candidate Bush made a lot of promises during his 2000 presidential campaign. Here's the 2004 record:

GASB CHANGES REPORTING RULES ON RETIREE HEALTH BENEFITS
On August 2, the Government Accounting Standards Board (GASB) issued Statement No. 45, a follow-up statement to No. 43 issued in June, changing the way state and local governments should account for and report the costs of retiree healthcare and other post-employment non-pension benefits (OPEB). The statements require public employers, including state and local governments, schools, colleges and universities, hospitals, utilities, authorities, etc., to account for and report the annual cost of OPEB and the outstanding OPEB obligations and commitments in essentially the same way they currently do for pensions, where costs and obligations are reported for a 30-year period into the future. Unlike pensions, the variables in long-range healthcare costs are highly volatile and difficult to predict. This did not deter GASB, which resisted attempts by the AFT and the coalition of employee and pension groups it put together, to modify the new rules. A similar standard governing retiree benefits in the private sector went into effect in the 1990s and has largely been credited with helping accelerate the decline of retiree health benefits there. Critics fear that the addition of this new long-term liability to public employer balance sheets may cost state and local governments more money in interest payments and hurt their bond ratings. The largest employers (annual revenues of more than $100 million) would be required to implement the requirements of Statement 43 beginning in 2006; medium-sized employers (annual revenues between $10 million and $100 million) have one more year to implement the standard, and the smallest employers (annual revenues under $10 million) must meet it by 2009. Statement 45's requirements begin a year later. Although GASB is a private professional organization with no official enforcement power, its standards are followed by nearly all organizations in the public and private sectors. The AFT will be monitoring this situation very closely, seeking ways to blunt any negative impact on retiree health benefits.

LaCOUR ELECTED TO AFL-CIO EXECUTIVE COUNCIL
AFT secretary-treasurer Nat LaCour was elected to the AFL-CIO executive council at the group's Aug. 9-11 meeting in Chicago. LaCour, who was elected AFT secretary-treasurer at the AFT's convention in Washington, D.C., in July, previously served as the AFT's executive vice president. He is the former president of AFT's New Orleans affiliate, the United Teachers of New Orleans (UTNO), where he established one of the first AFT retiree chapters in the South. During that period, he also served as a vice president on AFT's executive council. LaCour chairs the AFT's organizing committee, which has helped establish the AFT as one of the fastest-growing unions in the nation, and the AFT healthcare task force, which develops national standards and policies and serves as a clearinghouse of healthcare information. During his tenure as UTNO president, LaCour was instrumental in bringing about a merger between the New Orleans affiliates of the AFT and the National Education Association. Under his leadership, and without the aid of a state public employee collective bargaining law, UTNO became the first teachers union in the Deep South to obtain a collective bargaining agreement with a school district. LaCour joins AFT president Edward J. McElroy, 47 other vice presidents and three AFL-CIO officers on the council.

9 MILLION FEWER GOT EMPLOYER HEALTH INSURANCE IN 2003 THAN 2001
Between 2001 and 2003, nearly nine million U.S. residents under age 65 lost employer-sponsored health insurance, largely because of the economic downturn and the increasing cost of providing such coverage, according to a Center for Studying Health System Change report released August 3. According to the study, the percentage of people with employer-provided insurance fell from 67 percent in 2001 to 63.4 percent in 2003. Most employers did not totally drop healthcare coverage during the study period, but some made health benefits less attractive or more expensive for many low-income employees by tightening eligibility requirements and raising employees' premium contributions. The federal and state governments picked up some of the slack: Enrollment in Medicaid and the State Childrens Health Insurance Program (SCHIP) rose from 9 percent to 12 percent over the same period, the report says. Declines in employer-provided health coverage occurred among all age groups but were particularly pronounced among 19- to 39-year olds. The share of people in that age group with employer-sponsored coverage fell from 64.9 percent in 2001 to 59.4 percent in 2003. Latinos were the least likely to receive health benefits from their employers, according to the report. The percentage of Latinos with employer-sponsored health coverage declined from 46.7 percent in 2001 to 39.7 percent in 2003. Over the same period, employer-sponsored coverage among African Americans decreased by 3.1 percent, and it fell by 2 percent among whites.

TIME TO CHANGE YOUR HOMEOWNERS POLICY?
Would your current homeowners insurance replace your home in the event of a disaster? Because of spikes in real estate prices, the homeowners insurance you bought when you purchased your home may not be enough to replace it today. The AFT PLUS Homeowners Insurance program may be just the place for you. The two AFT-approved insurance companies GMAC and Liberty Mutual both have an A (excellent) rating from A.M. Best, an independent insurance ranking company, and may offer you significant savings. To find out which company covers your state and how to contact them, click

www.aft.org/aftplus/insurance/home.htm. (This program is not currently available in all states.)

QUOTE OF NOTE: U.S. Rep. Rodney Alexander (R-La.)
"I have learned during my first term in the U.S. Congress that there is a Republican-led attack on the most fundamental rights that labor unions have worked decades to establish....While I have friends on both sides of the aisle, I believe that I can represent the good working people of Louisiana best as a Democrat."

U.S. Rep. Rodney Alexander (La.-5th C.D.)
March 18, 2004

One half-hour before the August 6 state deadline for candidates to file to run for office, Rep. Alexander announced that he was switching his party affiliation to Republican.

WEB SITE OF THE WEEK:

www.bedandbreakfast.com
Get information on more than 27,000 bed and breakfast inns worldwide with weekly "hot deals" offering savings averaging about 20 percent per night on selected inns. Inngoers can also post reviews or read an online newsletter. Aspiring innkeepers can browse the bed and breakfasts listed for sale.

Contributors and sources: Bill Cunningham, Inside AFT, New York Times, Boston Globe, Las Vegas Sun, Wall Street Journal, Hartford Courant, Detroit News, Washington Post, Washington Times, Families USA, Center for American Progress, Government Accounting Standards Board, Alliance for Retired Americans Friday Alert, Kaiser Health Policy Report. Frank Stella, editor; Mary Boyd, copy editor; Renee Turner, design.