• Key Lawmakers in Senate/House Target
  Social Security
• President’s Poll Ratings Hit New Low
• AARP and UnitedHealth To Offer Medicare Rx Drug Plan
• CMS Says Drug Benefit Will Be Available in All States
• Prescription Drug Costs Rose 10 percent in 2004
• Covering the Uninsured To Hike Employee Health Premiums $341
• Soaring Drug Costs Outpacing Healthcare
  Spending Worldwide
• Senate Mulls Pension Crisis
• William Paterson Retirees Charter
• Boston Retirees Have Their Day on the Hill
• Save with AFT PLUS Health Clubs Discount
• In Memoriam: Sophie Jaffe Banasiak
• Quote of Note: A Second Bill of Rights
• Web site of the Week: http://www.wakeupwalmart.com

KEY LAWMAKERS IN SENATE/HOUSE TARGET
SOCIAL SECURITY
Powerful chairmen in both chambers of Congress have vowed to produce Social Security legislation by this summer. Senate Finance chair Charles Grassley says his top priority is making Social Security solvent. Once he has Republican agreement on solvency, Grassley will move onto the issue of creating private accounts. Options being considered by the committee include substantially increasing the amount of income subject to Social Security taxes; reducing benefits for upper-income wage earners; and raising the retirement age. But Grassley has no consensus. Sen. Olympia Snowe (R-Maine) will not support private accounts, and Sen. Gordon Smith (R-Ore.) has proposed an alternative. Claiming that Bush's Social Security agenda is in serious trouble, Smith joined with Kent Conrad (D-N.D.) to introduce a bill intended to increase participation in tax-advantaged savings plans like 401(k) accounts. In the House, Ways and Means chair Bill Thomas (R-Calif.) is said to be putting together a broad package of reforms that address retirement security rather than focus only on Social Security. Thomas's strategy may be working. Rep. Earl Pomeroy (D-N.D.) was quoted as saying “[Thomas] seems to be doing a better job, certainly, than the administration and most of the cheerleaders for the president’s plan, in not just speaking of the budget dimensions of the issue or the ideology dimensions of privatization, but also on real issues of retirement income.” Democrats remain solidly opposed to private accounts carved out of the current system and large benefit cuts.

PRESIDENT’S POLL RATINGS HIT NEW LOW
A career-high 52 percent disapprove of President Bush’s job performance overall, according to a Washington Post-ABC News survey released last week. Disapproval of Congress is at 54 percent, with six in 10 Americans saying Bush and the Republicans are not making good progress in solving the nation's problems. Bush's campaign to win support for his Social Security plan is failing. Sixty-two percent of respondents disapprove of the way the president is handling Social Security; 56 percent believe Bush's plan would cut the overall retirement income of seniors. When considering how the plan would improve, 63 percent said the proposal would not improve the long-term financial stability of Social Security.

AARP AND UNITEDHEALTH TO OFFER MEDICARE
Rx DRUG PLAN
UnitedHealth on June 6 announced that it has agreed to partner with AARP to offer an AARP-branded prescription drug plan when the Medicare drug benefit begins in 2006. The agreement extends an existing relationship between AARP and Ovations, the division of UnitedHealth that focuses on older U.S. residents. The drug plan agreement also is likely to enhance UnitedHealth’s partnership announced in March with Walgreen. Under that agreement, Ovations and Walgreen will jointly administer Part D prescription benefits. Ovations has a request pending with the Centers for Medicare and Medicaid Services to provide Medicare Part D services to beneficiaries in all 50 states. But the plan is not without its critics. “It's one thing to act in self-interest as a profit-making insurer,” said U.S. Rep. Pete Stark (D-Calif.), "it's another entirely to leverage a trusting membership of America's seniors to pass legislation that you know will do little more than line your own pocket.” AARP spokesperson Lisa Davis said the group supported the Medicare drug bill “for one reason and one reason only--people are hurting and needed help.”

CMS SAYS DRUG BENEFIT WILL BE AVAILABLE
IN ALL STATES
Medicare prescription drug plan coverage--whether through managed-care plans or drug-only plans or both types of plans--will be available to beneficiaries in all states and U.S. territories in 2006, Centers for Medicare and Medicaid Services administrator Mark B. McClellan said June 8. McClellan told a luncheon sponsored by the U.S. Chamber of Commerce that he does not have specifics about how many plans will enter the new Medicare drug program next year. He did say however, that preferred-provider organizations will be virtually everywhere in the country. McClellan spoke two days after the June 6 deadline for Medicare Advantage (managed care) plans and stand-alone prescription drug plans (PDPs) to submit bids to CMS to offer the Part D drug benefit in 2006. On a related matter, McClellan told the employers at the lunch that he still believes that the easiest and most popular way for them to offer a drug benefit for their retirees will be through the retiree drug subsidy program. The Medicare Act of 2003 provides that employers that offer retiree drug coverage on par with Medicare’s new Part D drug coverage are entitled to tax-free subsidies that will pay for 28 percent of a retiree's drug costs--between $250 and $5,000 in 2006. In addition to the subsidy, the law allows employers to use their plan as a wraparound or supplement to Part D benefits, to provide a PDP under contract with a PDP sponsor or managed-care organization, or use the CMS waiver process to directly sponsor a customized drug plan for their retirees. Employer applications for the subsidy are due by Sept. 30.

PRESCRIPTION DRUG COSTS ROSE 10 PERCENT
IN 2004
Prescription drug costs increased by 10 percent last year--a smaller rise than expected--according to the 2004 Drug Trend report released recently by pharmacy benefit manager Express Scripts. According to the report, based on data from three million of the 50 million patients served by Express Scripts, the company had expected prescription drug costs to increase by 14 percent to 15 percent last year. The report found that clients spent an average of about $707 last year for medications without any cost controls in place, compared with about $640 in 2003. The report excluded high-cost injectable medications. Inflation accounted for 70 percent of the increase last year, and increased prescription drug use accounted for 27 percent, the report found. The cost of new prescription drugs accounted for 3 percent. Express Scripts estimated that prescription drug costs would increase by about 12 percent this year.

COVERING THE UNINSURED TO HIKE EMPLOYEE HEALTH PREMIUMS $341
U.S. workers with employer-sponsored health insurance in 2005 will pay an average of $341 in additional premiums for individual coverage according to a Families USA report released June 8. Total costs to cover the cost of treatment for the uninsured will be $4,065 per person, the report said. Based on data from the Census Bureau, Agency for Healthcare Research and Quality and the National Center for Health Statistics, this was the first study to examine the financial implications of the cost of treatment of the uninsured for insured workers. According to the report, uninsured residents will pay about one-third of their healthcare costs in 2005, which will leave an additional $43 billion in unpaid costs. Public healthcare programs such as Medicaid will cover about one-third of the unpaid costs, and insured workers will cover the remainder through higher premiums. As a result, employer-sponsored insurance will cost about 8.5 percent more in 2005. U.S. families in 2005 will pay an average of $922 in additional health insurance premiums to cover the cost of treatment for the uninsured. Total premium costs for a family with employer-sponsored health insurance will average $10,979 in 2005.

SOARING DRUG COSTS OUTPACING HEALTHCARE SPENDING WORLDWIDE
Spending on pharmaceuticals has risen at astronomical rates across the world's industrialized countries over the past five years, with growth in drug spending outpacing the growth in total healthcare expenditures in most countries, according to a report released June 8 by the Organization for Economic Cooperation and Development. Pharmaceutical expenditures have risen by an annual average of 4.8 percent across the 30-member OECD since 1998, pushing the total cost of drugs used across the industrialized world above $450 billion in 2003, according to the report. The U.S. leads the world in per-capita drug spending, shelling out $728 per person on prescription and over-the-counter pharmaceuticals in 2003. France holds down the second spot, with per-capita expenditure of $606, followed by Canada ($507), Italy ($498) and Iceland ($453). Mexico and Turkey had the lowest per-capita annual pharmaceutical expenditure, spending respectively $125 and $112 in 2003, according to the report. The OECD average was $366. Spending on pharmaceuticals represented an average 17.8 percent of total healthcare spending across the OECD in 2003. But six wealthy European nations reported that drug spending comprised less than 12 percent of total healthcare spending. Drug spending in the United States represented 12.9 percent of total health spending in 2003. But the rate of increase here was 9.6 percent between 1998 and 2003, more than twice the 4.6 percent growth in total health expenditure. The U.S. devoted 15 percent of its gross domestic product (GDP) to health spending in 2003, followed by Switzerland and Germany, each at over 11 percent of GDP, according to the report.

SENATE MULLS PENSION CRISIS
The pension plans of millions of American workers and retirees are severely underfunded because of outdated legislation and corporate loopholes. Amidst the ongoing debate over the future of Social Security and spurred by United Airlines’ record $9 billion pension default, the Senate Finance Committee held hearings last week on how to shore up the beleaguered retirement system. Lawmakers criticized chief executives of Delta, Northwest and United, who appeared before the committee, for shortchanging pensions, hiding problems and protecting executive pensions while benefits for other employees were reduced. The federal Pension Benefit Guaranty Corporation (PBGC) has assumed financial responsibility for unfunded defined-benefit pension plans, mostly in the steel and airline industries. The Government Accountability Office suggests that many companies were misrepresenting pension funds and not contributing adequately. According to the PBGC, total underfunding in the traditional pension system may be as high as $450 billion. The agency is said to be running a $23.3 billion deficit, which fuels fears of a taxpayer bailout similar to the savings and loan crisis of the 1980s. Senators seem to agree that change is needed but had no common approach.

WILLIAM PATERSON RETIREES CHARTER
Local 1796 president Sue Tardi presented their brand-new charter to William Paterson University retirees on May 5 in Perth Amboy. Chapter president Reggie Grier and organizing committee members John Stimson, Don Fornuto and Stella Hyman led the organizing effort. Prof. Irwin Yellowitz, chair of the Professional Staff Congress retiree chapter, which represents faculty and professional retirees in the City University of New York system, represented the AFT. Thirty-four retired members appear on the charter. The William Paterson chapter is AFT’s 101st chartered chapter.

BOSTON RETIREES HAVE THEIR DAY ON THE HILL
Ignoring the unseasonably cold, blustery, rainy weather, three busloads of retirees from the Boston Teachers Union visited some 20 state senators and 30 representatives May 25 to lobby for better pensions. The main goal of the chapter’s first lobby day was upping the pension cost-of-living adjustment from the first $12,000 in pension to $18,000 and raising the minimum pension for those with 25 years of service or more from $10,000 to $20,000, a move targeted to aid the oldest and poorest retirees. BTU president Richard Stutman sent off the retirees with the thanks of working members, and Massachusetts Federation of Teachers legislative director Mike Canavan briefed the activists on lobbying strategy and answered questions. A debrief and postcard follow-up ended the session. BTU retiree activists are already planning a follow-up lobbying effort.

SAVE WITH AFT PLUS HEALTH CLUBS DISCOUNT
At one time or another, you probably promised yourself you’d start exercising, but somehow, like most of us, you never got around to it. To help you and your family take better care of yourselves and save money on monthly health club fees, AFT PLUS is offering 20 percent to 60 percent discounts on monthly fees at more than 1,500 health clubs nationwide. You can cancel your membership at any time or freeze it and activate it at a later date. The program also allows you to transfer membership between participating health clubs for just $10. To find out more, call 888/294-1500 or visit http://www.unionplus.org/healthclubs.

IN MEMORIAM: SOPHIE JAFFE BANASIAK
Sophie Jaffee Banasiak, a former AFT vice president and a longtime officer of the Connecticut AFT and the New Britain Federation of Teachers, died May 26 at age 91. She had Alzheimer's disease. Jaffee Banasiak was active in the AFT for 55 years and was a founding organizer of the New Britain local and its retiree chapter. She served as president of the Connecticut Federation of Teachers (now AFT Connecticut) in the 1970s and was active in the New Britain central labor council and the state AFL-CIO. She was an AFT vice president from 1958-1963. Sophie is survived by her husband John, a sister and a brother.

QUOTE OF NOTE: A Second Bill of Rights
"The right to a useful and remunerative job in the industries or shops or farms or mines of the nation.
"The right to earn enough to provide adequate food and clothing and recreation.
"The right of every farmer to raise and sell his products at a return that will give him and his family a decent living.
"The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.
"The right of every family to a decent home.
"The right to adequate medical care and the opportunity to achieve and enjoy good health.
"The right to adequate protection from the economic fears of old age, sickness, accident and unemployment.
"The right to a good education."

President Franklin Delano Roosevelt
State of the Union Address,
Jan.11, 1944

WEB SITE OF THE WEEK: http://www.wakeUpWalMart.com
The "Wake-Up Wal-Mart Campaign," backed by the United Food and Commercial Workers, is about Americans joining together in common purpose to reform Wal-Mart, the #1 Fortune 500 company in the world. So far, it has brought together some 50,000 grassroots leaders, community groups and activists to challenge Wal-Mart’s negative impact on America’s jobs, wages, healthcare and communities.