• AFL-CIO Rallies Target Bush Social Security Plan
• Election Over, Drug Makers Hike Prices on
  Popular Drugs
• Medicare Will Expand Coverage for Cardiac Devices
• Medicare, Medicaid Costs Rising Faster Than
  Social Security
• Dayton Bill Would Allow Medicare To Negotiate
  Drug Prices
• Bush Would Expand Health Savings Accounts
• Social Security Myths and Facts: Leaving
  Private Accounts to Your Heirs
• Staying Warm Can Be a Matter of Life and Death
• Ready for Feb.14? Save on Flowers with AFT PLUS
• Retirees in the News
• Quote of Note
• Web Sites of the Week: www.equifax.com; www.experian.com; www.transunion.com

AFL-CIO RALLIES TARGET BUSH SOCIAL
SECURITY PLAN
With rallies Jan. 26 in the financial districts of Boston and San Francisco, the AFL-CIO has launched a nationwide grass-roots campaign against President Bush's Social Security plan, arguing that scandal-ridden financial services firms in Boston and other cities should not be entrusted with private retirement accounts. Massachusetts secretary of state William Galvin, who has pressed improper-trading cases against several prominent financial firms, was the featured speaker at the Boston rally, joining other opponents of the Bush Social Security plan who say the industry will reap huge profits on fees from workers' investments if the president's proposal is approved by Congress. The Boston rally, organized by the Greater Boston Labor Council and the national AFL-CIO office was mirrored by an event in San Francisco's financial district. ''This privatization is a racket for [the companies]," said Rich Rogers, executive secretary of the Greater Boston Labor Council. President Bush's plan as outlined would lead to a cut in benefits for retired workers and add $2 trillion to the national debt. Major players in the financial services industry supporting the Bush plan, include Fidelity Investments, the Boston mutual fund giant. According to Bloomberg News, Fidelity is part of a group of major companies that also includes Boeing and Pfizer, which plans to spend more than $5 million to promote the Bush Social Security proposal. ''There is no secret that this industry is salivating over all the fees that this effort is going to create," Galvin said. The AFL-CIO national headquarters said that these rallies will be followed by events in other major cities. Another phase will include an Internet campaign urging investors to try to force their investment managers to take a public position on the creation of private accounts. On Jan. 31, the AFT executive council unanimously approved a resolution encouraging state and local affiliates in cooperation with the national union, AFL-CIO and allied groups to lobby the U.S. Senators and Representatives at least twice yearly on issues important to members. The AFL-CIO and AFT have made opposing private accounts and strengthening the current Social Security system a top 2005 legislative priority.

ELECTION OVER, DRUG MAKERS HIKE PRICES ON
POPULAR DRUGS
Drug makers have increased prices on their most popular drugs, in some cases by as much as 11 percent. The Wall Street Journal reports that of the 50 highest-selling drugs, 31 had price increases from November 2004 to January 2005. In one example, Bristol-Myers Squibb's hiked its cholesterol drug Pravachol 5.9 percent, resulting in a 13.3 percent increase since January 2004. The increases, which far outstrip inflation, will have a significant impact on America's seniors who account for 34 percent of all prescription drugs dispensed. Industry observers believe the drug companies purposely timed price increases after the election to deflect any political pressure. Some analysts say increases are a way for drug companies to position themselves before Medicare's drug benefit begins in 2006. "What the drug makers are desperate to do is harvest a few more fat years of profit before the storm hits," Alan Sager, a professor at the Boston University School of Public Health, noted. The Medicare drug benefit is likely to increase the volume of drugs sold, but the law specifically prohibits the government from negotiating lower prices. During the presidential campaign, President Bush promised to consider bipartisan legislation to legalize low-cost drug imports from Canada. Shortly after he won re-election, the president's advisory panel determined that re-importation was unsafe.

MEDICARE WILL EXPAND COVERAGE FOR
CARDIAC DEVICES
Medicare has announced plans Jan. 27 to increase coverage of implantable cardioverter defibrillators (ICDs), a move that could increase the number of eligible beneficiaries by about 150,000, according to federal officials. The announcement coincides with publication of a study showing improved survival rates with the devices that appeared in a recent New England Journal of Medicine. Currently, Medicare covers ICDs generally only for patients with severe heart failure. The Centers for Medicare and Medicaid Services last year proposed ICD coverage based on the preliminary results of a study that found that defibrillators lowered the risk of death among patients with moderate heart failure. Under the initial proposal, coverage of the devices -- which cost between $20,000 and $35,000 -- would be expanded to beneficiaries who have mild to moderate heart failure, defined as a reduction of 30 percent in the amount of blood pumped by the heart with each contraction. CMS officials said that Medicare would provide coverage for ICDs for at least 25,000 additional beneficiaries in the first year of the expansion, which could save as many as 2,500 lives. Coronary heart disease is the single most common cause of death in the United States. Sudden death, frequently from heart arrhythmias, is estimated to account for approximately 50 percent of all coronary heart disease deaths. An ICD is implanted in a patient’s chest to monitor the heart’s rhythm and deliver an electrical shock when a life-threatening arrhythmia is detected. Medicare plans to expand coverage of ICDs to beneficiaries with the same conditions as study participants. The revised coverage proposal will be finalized after a period of public comment. Expanded coverage of ICDs could be the most expensive single decision in Medicare's history. If 20 percent of eligible beneficiaries received ICDs, the cost would be about $3 billion annually, the Washington Post reports. If all eligible beneficiaries received ICDs, the cost of coverage would be $15 billion annually or more, about equal to all other outpatient Medicare expenditures combined.

MEDICARE, MEDICAID COSTS RISING FASTER THAN
SOCIAL SECURITY
The annul report of the Congressional Budget Office released Jan. 25 said that Medicare and Medicaid costs continue to be the biggest threat to the nation’s long-term fiscal security. According to the report, Medicare and Medicaid costs will dwarf any increases in Social Security. CBO estimated that the 10-year cumulative federal budget deficit would reach $1.3 trillion, an almost 60 percent increase from estimates announced last November. According to the report, the increase in Social Security costs will be dwarfed by the growth in government medical coverage, and the nation cannot grow its way out of future deficits without new taxes and the economy and productivity growing at a historically high rate. CBO estimates make it even more unlikely that President Bush would keep his promise to cut the deficit in half by the end of his presidency, especially in light of his pledge to make his tax cuts permanent.

More info: www.cbo.gov/showdoc.cfm?index=6060&sequence=0

DAYTON BILL WOULD ALLOW MEDICARE TO NEGOTIATE DRUG PRICES
Sen. Mark Dayton (D-Minn.) announced Jan. 24 that he would introduce legislation to allow Centers for Medicare and Medicaid Services to negotiate directly with pharmaceutical companies for discounts on prescription drug prices, a practice banned under the 2003 Medicare law. The proposed bill would also include provisions to reduce Medicare premiums; address coverage gaps in the new prescription drug benefit and ensure that beneficiaries are not forced to enroll in Medicare Advantage plans. Dayton says the legislation would reduce premiums for some beneficiaries by eliminating an estimated $12 billion in subsidies for HMOs and pharmacy benefit managers to administer prescription drug coverage. Over time, the bill would eliminate the coverage gap in the Medicare prescription drug benefit for annual medication costs between $2,200 and $3,600. At a Jan. 24 press conference in St. Paul, Dayton said, "This is about survival," adding, "People are being ravaged by escalating drug prices that are out of control." He charged that President Bush’s prescription drug policies essentially have been written by pharmaceutical companies and other corporate healthcare interests.

BUSH WOULD EXPAND HEALTH SAVINGS ACCOUNTS
In a Jan. 25 speech at National Institutes of Health, President Bush proposed tax credits to expand health savings accounts and reduce the nation's healthcare costs. Under the proposal, families of four with annual incomes of less than $25,000 would receive a $1,000 tax credit annually for Health Savings Accounts. Under the new Medicare law, HSAs are available to members of health plans that have a deductible higher than $1,000 for individuals and $2,000 for families. Employees, employers or both can contribute as much as a combined $2,600 annually for individuals and $5,150 annually for families for HSAs annually. The proposal also would provide eligible families with up to $2,000 in refundable tax credits to help purchase health insurance with HSAs or a maximum of $3,000 in refundable tax credits to help purchase traditional health coverage. Critics see the proposals as falling far short of the actual cost of healthcare and a way of eventually replacing employer health coverage and retiree health coverage with a small fixed contribution or voucher, leaving employees to bear the burden of skyrocketing health costs.
 
SOCIAL SECURITY MYTHS AND FACTS: Leaving Private Accounts to Your Heirs
MYTH: "Personal accounts will enable a worker to be able to pass on his or her ownings to whoever he or she chooses, which is an important part of promoting an ownership society. We want people to own and manage their own assets."

- President George Bush on Social Security, 1/26/05

FACT: Private accounts would result in a lot less individual control than President Bush claims. All the major proposals being considered for private accounts would place big limits on how much money individuals can invest, where it can be invested, what they can do with it when they retire and how much they can pass on to heirs.

William M. Welch, "Social Security Accounts Would Limit Control," USA Today

STAYING WARM CAN BE A MATTER OF LIFE AND DEATH
Every year, hypothermia kills about 600 Americans, half of whom are 65 and older, according to the U.S. Centers for Disease Control and Prevention. Hypothermia occurs when a person's normal body temperature drops from 98.6 degrees to 95 degrees. Older people may be at greater risk for this condition if their body's response to cold is diminished by certain illnesses, like arthritis, and medications, like some over-the-counter cold remedies. Here are some tips from the National Institute on Aging. The best way to identify someone with hypothermia is to look for the "umbels" - stumbles, mumbles, fumbles and grumbles. Changes in a person's behavior may indicate that the cold is affecting how well their muscles and nerves work. If you suspect that someone is suffering from the cold and have a thermometer available, take his or her temperature. If their body temperature is 96 degrees or lower, call 911 for emergency help. The most important step in treating someone with hypothermia is to immediately warm the person. Wrap the person in blankets, towels, coats -- whatever is handy. You can also use your own body heat to keep the person warm. Lie close to the victim but be gentle if you rub their arms and legs because an older person's skin may be easily damaged. To prevent hypothermia, set your thermostat to at least 68 degrees to 70 degrees. Even temperatures from 60 degrees to 65 degrees can trigger the disorder. For more information, call the National Institute on Aging or visit www.nia.nih.gov.
 
READY FOR FEB. 14? SAVE ON FLOWERS WITH
AFT PLUS
Valentine’s Day is just around the corner. But it isn’t the only occasion when flowers will warm a family member or friend’s heart. Whether it’s a birthday, new baby or just to let someone know you are thinking of them, flowers are a beautiful and personal way to tell someone you care. With the Union Member Flower Service, AFT members receive a 15 percent discount on every order (minimum $34.99). Selections include plants, floral arrangements and even gift baskets. To make your selection, visit www.unionplus.org/flowers or call 888/667-7779.

AFT RETIREES IN THE NEWS
Philadelphia Federation of Teachers retiree leader Jeanne Boone was featured in a full-page spread on Social Security in the January issue of the AFL-CIO’s monthly magazine America at Work. Boone told AFL-CIO members, "Privatizing Social Security will put the money at risk. It’s not honoring your father and mother to take away their safety net."

QUOTE OF NOTE
"Does Social Security have a financing problem? Yes. Will Social Security ever go bust? No."

David Walker, U.S. Comptroller General
USA Today
1/27/05

WEB SITES OF THE WEEK: www.equifax.com; www.experian.com; www.transunion.com
For a modest fee (usually under $10), you can obtain a copy of your credit report. And, if you live in one of these states, you can get one free at least once a year: Colorado, Georgia, Maine, Maryland, Massachusetts, New Jersey or Vermont. Check with one of these three major credit bureaus to learn your credit history and make sure there are no errors that could affect your credit rating.