• Medicare Part B Premiums To Rise 17.5 Percent Next Year
• Unions Seek Safeguards for Retiree Drug Coverage
• Insurance, Drug Companies Square Off over Medicare Prescription Drug Formulary
• Senate Republican Leaders Block Vote on Drug Import Bill
• GAO Says Administration Concealed True Cost of Medicare Law
• AFT Joins Thousands in Door-to-Door Visits
• How Do You Define Compassion?
• House Rejects Bush Overtime Rules
• Arnold Trip Paid for by Drug Industry Looking for a Veto
• Medicare and Home Care
• Save on Fall Travel with Go Ahead Vacations
• Quote of Note
• Web site of the Week: www.eldercare.gov

MEDICARE PART B PREMIUMS TO RISE 17.5 PERCENT NEXT YEAR
Monthly premiums for Medicare Part B—which covers doctor services, outpatient hospital care, some home health services and durable medical equipment—will increase 17.5 percent to $78.20 in 2005, HHS officials announced Sept. 3. The rise of $11.60 per month is the single largest dollar increase in Medicare's history. Officials from the Center for Medicare and Medicaid Services acknowledged that 15 percent of the premium increase will go directly from seniors’ pocketbooks to HMOs every year. Medicare premiums have risen 56 percent in the last four years. The Bush administration claims that the major factor behind increased premiums is higher spending under traditional, fee-for-service Medicare, particularly in higher payments to doctors. Under the new Medicare law, payments to doctors in 2005 will rise by 1.5 percent instead of decreasing by 4.5 percent as was planned initially. The new Medicare law also calls for increased payments to private Medicare plans, which also contributed to the premium increase. HHS also announced that the deductible for Medicare Part A—which covers inpatient hospital care, skilled nursing facilities and some home healthcare—will increase by $36 to $912 in 2005. In his acceptance speech at the Republican convention, the night before the record increase was announced, President Bush said, "We have a moral responsibility to honor America's seniors. Now seniors are getting immediate help." The White House and Republican leaders in Congress have consistently blocked efforts to allow Medicare to use its bulk purchasing power to negotiate lower drug prices, a major contributor to soaring Medicare costs. A recent Johns Hopkins report found that if Medicare could negotiate drug prices similar to those in Canada and other nations, where they often are 34 percent to 59 percent cheaper, Congress could eliminate the entire coverage gap in the Medicare drug benefit. Critics charge that the administration moved up announcement of the record-breaking Medicare premiums from its traditional date in mid-October to distance the bad news from the November election.

UNIONS SEEK SAFEGUARDS FOR RETIREE DRUG COVERAGE
Union representatives are urging federal regulators to take steps in forthcoming final Medicare rules to ensure that subsidies to private employers who offer retiree drug benefits do not allow firms to shift additional costs to retirees while still receiving taxpayer-financed subsidies. At an August forum with officials from the Centers for Medicare and Medicaid Services, union representatives applauded regulators for seeking to stem the decade-long erosion of retiree health benefits but expressed concerns that the proposed rules lack safeguards. Among changes the AFT and other unions would like to see in the new regulations are increases in disclosure and transparency requirements for employers seeking Medicare Part D subsidies. The unions also rejected the "single-prong" test offered by CMS to calculate the total gross value of an employer's drug benefit package. This approach would count both employer and employee payments toward the employer subsidy. Such a subsidy could actually be a windfall for some employers, bringing them more in subsidies than they actually pay for a retiree drug benefit. The unions supported requiring employers to maintain retiree drug coverage at the level they provided prior to receiving the subsidy. The Medicare drug subsidy (around 28 percent of a qualifying retiree's allowable drug costs between $250 and $5,000 in 2006) will be offered to employers and unions that provide drug coverage that is at least "actuarially equivalent" to Medicare Part D. Comments on the prescription drug benefit rule are due Oct. 4. The text of the rule is available at http://www.cms.hhs.gov/medicarereform.

INSURANCE, DRUG COMPANIES SQUARE OFF OVER
MEDICARE PRESCRIPTION DRUG FORMULARY
In August, the United States Pharmacopeial Convention, the private standard-setting body for the drug industry, offered its proposed plan for creating a formulary for the new Medicare drug benefit. The guidelines list 146 classes of medications that should be covered by Medicare, including categories for antidepressants, HIV/AIDS drugs, cholesterol-lowering medications and anti-inflammatories. Creation of this formulary has produced an intense lobbying tug of war between drug and insurance companies. Insurers and pharmaceutical benefits mangers say that private health plans generally have 50 to 90 separate drug classes, and they contend that a Medicare drug formulary with a small number of classes would create more competition among drug makers and give negotiators more leverage to win lower drug prices. Drug makers want the formulary to include more than 200 drug classes to increase their odds of having products listed on the formulary, give consumers broader access to drugs and fatten their profit margins. The federal government, now, must try to balance the quality of drug coverage for Medicare beneficiaries against the cost of new drugs in the absence of both the ability to reimport drugs from Canada and other industrialized countries or allowing Medicare to use the power of its 44 million beneficiaries to negotiate prices.

SENATE REPUBLICAN LEADERS BLOCK VOTE ON DRUG IMPORT BILL
The clock appears to have run out for Senate action on a bill to allow imports of pharmaceuticals this year, Senate majority leader Bill Frist (R-Tenn.) told reporters Sept. 8. Frist had indicated earlier this year that he would allow a floor vote on drug reimportation. Now, however, he says it looks doubtful. Senate Health, Labor and Education Committee chair Judd Gregg (R-N.H.) postponed a July 21 vote on his drug import bill (S. 2493), a weaker version of a bipartisan alternative, and now says the committee will probably not vote on the bill this year. Drug import legislation would allow U.S. consumers to benefit from the lower prices for pharmaceuticals in Canada and other countries. Sen. Byron Dorgan (D-N.D.), co-sponsor of the stronger bipartisan bill (S. 2328) chided Frist for reneging on his commitment. Dorgan said that he plans to meet with co-sponsors of his bill to develop a plan to move the legislation this year.

GAO SAYS ADMINISTRATION CONCEALED TRUE COST OF MEDICARE LAW
As the battle over the Medicare bill was taking place in Congress, the Bush administration illegally withheld critical data on the cost of the bill from lawmakers and federal investigators. Investigators from the Government Accountability Office (GAO) said that Thomas Scully, former head of the Medicare agency, should repay seven months of his $145,000 annual salary to the government because he threatened to fire chief actuary Richard Foster if he disclosed the true cost of the Medicare bill, a direct violation of federal law. According to Office of Management and Budget estimates released after Congress passed the legislation, the Medicare law is projected to cost $534 billion over the next 10 years—$134 billion more than was estimated by the Congressional Budget Office. While the Bush administration did not deny the GAO findings, it said it was unconstitutional for Congress to compel the disclosure of data over objections from the executive branch. "The GAO findings prove that the Bush administration used strong-arm tactics to ram their phony Medicare law through Congress," said George Kourpias, president of the Alliance for Retired Americans. "Lawmakers from both parties said the law would not have passed in its current form if Congress had known the true cost of the Medicare law. Concealing this information once again demonstrates that George Bush favors pharmaceutical companies over America's seniors." Sen. Frank Lautenberg (D-N.J.), who brought the original charge, said that Scully and others in the Bush administration must be held accountable. "This was a corruption of the process at the highest levels," added Lautenberg. "What is still unclear is who in the Bush White House ordered Mr. Scully not to reveal this information." Scully, who now works as a lobbyist in the private sector, called the GAO report a joke and refused to return the salary.

AFT JOINS THOUSANDS IN DOOR-TO-DOOR VISITS
In an unprecedented show of strength, AFT working and retired members united with thousands of labor activists on Sept. 2 to deliver a powerful response to the Bush administration on key issues with some old-fashioned, one-on-one home visits to union households across the nation. AFT president Edward J. McElroy gave a fiery sendoff to hundreds of AFT and other union volunteers who gathered at an IBEW union hall in Philadelphia before fanning out to neighborhoods for door-to-door visits. In Kansas City, Mo., AFT secretary-treasurer Nat LaCour joined in neighborhood walks after addressing more than 400 union members. The AFT volunteers' task—and that of the 15,000 activists who walked through more than 200 communities across the country—was to speak personally with union members about key issues in this election: jobs, healthcare, Social Security and education. They also reminded their union colleagues about the dismal record of the Bush administration, including the Department of Labor's recent takeaway of overtime pay. The AFL-CIO-sponsored event, dubbed "We're Taking Back America," represented the largest one-day election mobilization in the union movement's history and an important kickoff for Labor Day events around the country. LaCour and McElroy were among more than 20 top union leaders who knocked on doors in communities from Reno, Nev., to Phoenix, Ariz., to Ann Arbor, Mich.

HOW DO YOU DEFINE COMPASSION?
President Bush resurrected his compassionate conservatism philosophy, but he continues to leave out specifics on what he has done in the name of compassion. Would a compassionate president:

• enact a massive $2 trillion tax cut tilted heavily toward the rich, creating the largest federal deficit in history?
• raid the Social Security Trust Fund to pay for tax cuts for the very wealthy?
• ban cheaper drug imports from Canada as U.S. drug price increases consistently outpace inflation by two or three to one?
• promise seniors a drug benefit that is confusing, complex and frustrating?
• choose pharmaceutical profits over seniors' welfare and retirement security?
• forbid Medicare from getting the best price it can on drugs for seniors?
• force seniors into a huge Medicare coverage gap with no drug coverage?
• mislead Americans by calling his plans for Social Security "reform" when it's really privatization?
  
  

HOUSE REJECTS BUSH OVERTIME RULES
The U.S. House of Representatives on Sept. 8 voted to block the new Bush administration wage and hour rules that put some 6 million people at risk of losing their overtime pay. In the 223-193 vote supporting an amendment offered by Democratic Reps. David Obey (Wis.) and George Miller (Calif.), 21 Republicans crossed over to support labor's position. The Senate cast a similar vote earlier this year. The amendment was part of a Department of Labor spending bill approved later that day. The Obey amendment "is a step in the right direction for working men and women," says AFT president Edward J. McElroy. "Instead of weakening the middle class, as the Bush administration sought to do, we should be trying to strengthen it." Despite these victories, President Bush has threatened to veto the House bill if this language remains in the final version sent to him. "We've won a battle, but the war to save overtime pay is not over," cautions AFT legislative deputy director Tor Cowan.

ARNOLD TRIP PAID FOR BY DRUG INDUSTRY LOOKING FOR A VETO
Corporations ponied up about $350,000 to finance Gov. Arnold Schwarzenegger's trip to the Republican convention, including a lavish party at Planet Hollywood (taxpayers footed the bill for his security). Many of the contributions come from large pharmaceutical companies like Pfizer, which are actively lobbying the governor to veto four bills passed by the state legislature designed to help Californians buy cheaper prescription drugs from Canada.

MEDICARE AND HOME CARE
If you get skilled nursing care or skilled therapy at home to help you recuperate, Medicare may also pay for home health aide services. For Medicare to pay, your doctor must justify the need for these services in your plan of care. Home health aides might help you with personal care, such as bathing, dressing, eating, getting around your home, or getting in and out of bed. Medicare does not pay for anyone to help you with grocery shopping, cleaning, laundry and cooking—these services are often referred to as custodial care.

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QUOTE OF NOTE
"It doesn't take a rocket scientist to understand that a policy of raiding the system, combined with the economic policy that produced more poverty, more families without health insurance and slow job creation, has undermined the stability of Social Security and future benefits."

Richard Miller, UFT retiree
Las Vegas Journal

WEB SITE OF THE WEEK: www.eldercare.gov
The Eldercare Locator, a service of the U.S. Administration on Aging, is a nationwide toll-free service that helps people find local resources and community assistance for older Americans. Call 800-677-1116 for information and referrals.

Contributors and sources: Bill Cunningham, Liz Smith, Tim Evanson, Shantel Edmonds, Inside AFT, New York Times, USA Today, Las Vegas Sun, Wall Street Journal, Philadelphia Inquirer, Washington Post, Associated Press, Detroit Free Press, Knight-Ridder, Charlotte Observer, Center for American Progress, Medicare Rights Center, Alliance for Retired Americans Friday Alert, Kaiser Health Policy Report. Frank Stella, editor; Mary Boyd, copy editor; Renee Turner, design.