• Enrollment in Medicare Rx Drug Benefit Stirs Confusion
• Medicare Rx Benefit Costs More than VA, Canada, Costco
• New Year To See Hard Cap on Medicare
  Outpatient Therapy
• Medicare Drug Coverage Could Hurt
  Low-Income Seniors
• House Reconciliation Bill a 'Shame and a Sham'
• President Bush Threatens To Veto Medicare
  Private Plan Subsidy Eliminated in Budget Reconciliation Bill
• Union's Disaster Relief Fund Nearing $700,000
• Employer Cost of Worker Health Benefits Slows as Employers Reduce Choice, Shift Costs to Employees
• One in Five California Healthcare Dollars Goes to Insurance Paperwork
• Wal-Mart Conference Reports Say Company Increases Medicaid Spending, Decreases Wages
• On the Lighter Side: Irish Nursing Home Keeps Spirits up with Own Pub
• Save Time and Money on Budget Car Rentals
• Quote of Note: Medicare Part D
• Web site of the Week: http://www.workingamerica.org/jobtracker/

ENROLLMENT IN MEDICARE RX DRUG BENEFIT STIRS CONFUSION
Enrollment in the Medicare prescription drug benefit began Nov. 15, amid both praise and criticism for the new coverage, which will cost an estimated $724 billion over 10 years. Medicare beneficiaries can enroll in Part D between now and May 15, and coverage is scheduled to begin on Jan. 1, 2006, or after that date, the first of the month following enrollment. According to the Washington Times, the average beneficiary will be able to choose from 45 different plans. An October survey by the Kaiser Family Foundation and the Harvard School of Public Health found that 61 percent of seniors say they don’t understand the new benefit. Forty-nine percent of seniors say they do not think the drug benefit will help them personally, compared with 39 percent who say it will. Forty-three percent of seniors say they have not yet decided whether to sign up for the benefit, while 37 percent say they will not enroll and 20 percent say they will, according to the survey. In general, AFT is encouraging retirees with employer coverage as good as or better than Part D not to enroll in the new Medicare benefit. The union recommends you visit the Medicare Web site, the joint AFT-Medicare Rights Center Web site and the AFT Web site for additional information. You can also call Medicare at 1-800/MEDICARE (633-4227) or contact your local union or health benefits administrator.

MEDICARE Rx BENEFIT COSTS MORE THAN VA, CANADA, COSTCO
The Medicare prescription drug benefit does not offer medications at the lower prices available through the Department of Veterans Affairs, Canadian pharmacies or high-volume U.S. pharmacies such as Costco or Drugstore.com, according to a report by the Democratic staff of the House Government Reform Committee. The report, released Nov. 23, compares the average prices of 10 popular drugs offered to Medicare beneficiaries through 10 well-known insurance plans. The average Medicare prices were 80 percent higher than VA prices, 60 percent higher than Canadian average prices and 3 percent higher than prices at major U.S. pharmacies. CMS spokesperson Gary Karr called the report "selective and misleading."

NEW YEAR TO SEE HARD CAP ON MEDICARE OUTPATIENT THERAPY
Starting Jan. 1, 2006, people with Medicare will be limited to $1,750 in outpatient physical and speech therapy combined, and $1,750 of outpatient occupational therapy. These caps will apply without regard to the gravity of the person’s condition, and Medicare will cover only one initial evaluation. Today, if you need physical, occupational or speech therapy, Medicare will pay for as much as a doctor or therapist deems medically necessary. In addition, your doctor or therapist has to set up your plan of treatment; the doctor must review it periodically; and the therapy must improve your condition or prevent further deterioration. Therapy caps were first established in 1997, but advocates were able to delay their implementation resulting in multiple moratoria. Concerned groups are again working to eliminate this ceiling on rehabilitation therapy before it drops for good. Those held in limbo by the pending cap on therapy services can keep abreast of the caps, or any changes in Medicare coverage, by logging on to Medicare Interactive at AFT’s Web site at http://www.medicareinteractive.org/aft. 

MEDICARE DRUG COVERAGE COULD HURT LOW-INCOME SENIORS
Last year, the pharmaceutical industry donated $4.1 billion wholesale value in prescription drugs through tax-deductible charities. A decision in mid-November by the HHS Office of Inspector General, however, could cause Medicare beneficiaries who enroll in the new prescription drug benefit to forfeit eligibility as of on Jan. 1, 2006, for the medications donated through the charities. An estimated 3 million to 4 million Medicare beneficiaries nationwide will be affected. Some pharmaceutical companies -- such as Pfizer, Bristol-Myers Squibb and Merck -- have said that they will allow Medicare beneficiaries to decide whether to enroll in the prescription drug benefit or continue to receive medications through their charitable programs. Other pharmaceutical companies, including AstraZeneca, Wyeth and GlaxoSmithKline, have said that they will eliminate their charitable programs for Medicare beneficiaries whether they enroll in the prescription drug benefit or not. Title II Community Aids National Network, a coalition of HIV/AIDS groups, has called on federal officials to revise the HHS OIG decision. In addition, the Pharmaceutical Research and Manufacturers of America has asked the Centers for Medicare and Medicaid Services to clarify the decision to allow Medicare beneficiaries who enroll in the prescription drug benefit to retain access to medications under their charitable programs when their expenses hit the donut hole, when annual prescription drug costs reach between $2,250 and $5,100 and the individual becomes responsible for the entire cost of prescription drugs.

HOUSE RECONCILIATION BILL IS A ‘SHAME
AND A SHAM’
By a vote of 217 to 215, House Republicans whipped their base into line and passed a $50 billion budget reconciliation bill in the early morning hours of Nov. 18. All Democrats—and the 14 Republicans defying their leadership—voted against the bill that House Democratic leader Nancy Pelosi characterized as "a shame and a sham." The bill makes cuts to mandatory spending programs such as Medicaid, food stamps and student loan subsidies, with the goal of reducing the federal deficit by $50 billion by 2010. In the next few weeks, the House is expected to steam through a $70 billion tax bill benefiting the wealthiest Americans, a move that will engulf the "savings" generated by the reconciliation bill and would add $20 billion in additional federal debt. In the weeks before the vote, AFT member activists swarmed the union's online legislative action center and registered their opposition. This generated almost 9,000 letters and hundreds of phone calls to more than 300 Capitol Hill offices. The House bill made $15 billion in cuts beyond those passed in the Senate budget reconciliation bill. The wide differences in the two bills must be settled through negotiations, expected to begin soon. Earlier in the day, the House rejected a Labor-HHS appropriations conference bill that would shortchange a number of important programs, including Medicaid, the No Child Left Behind Act, the Individuals with Disabilities Education Act and the Pell Grant program. This marks the first time in a decade that a GOP priority spending bill has been brought to the House floor and rejected by a bipartisan majority. The bill's 224-209 defeat should "serve as a wake-up call for Congress to redraft a better appropriations bill," says AFT president Edward J. McElroy.

PRESIDENT BUSH THREATENS VETO MEDICARE PRIVATE PLAN SUBSIDY ELIMINATED IN BUDGET RECONCILIATION BILL
Ideology trumped efficiency as President Bush threatened to veto a Senate version of the budget reconciliation spending bill if it eliminates additional subsidies for Medicare managed care plans. The Medicare Act of 2003 provides $10 billion to be used between 2007 and 2013 to encourage people with Medicare to join these plans and help the plans keep them. This law also provides additional subsidies in 2010 for such plans as part of pilot program to move up to 5 million Medicare beneficiaries into HMOs and preferred-provider networks. On average, Medicare paid 107 percent more per head for people in Medicare private plans than in original Medicare fee-for-service in 2004, according to the Medicare Payment Advisory Commission. In additional to administrative costs of up to 25 percent (v. 2 percent for Medicare) private plans are less successful at cost containment: Per enrollee, Medicare spending grew by 9.6 percent per year from 1970 to 2000, private plan per-enrollee spending grew by 11.1 percent per year.

UNION'S DISASTER RELIEF FUND NEARING $700,000
The AFT Disaster Relief Fund has grown to more than $674,000 toward helping thousands of AFT members affected by the recent hurricanes in the Gulf Coast region, reports AFT vice president Herb Magidson, who is chairing the fundraising effort. Although there is still a long way to go to surpass the $3 million mark, "we are gaining momentum, thanks to recent contributions of more than $175,000,” he noted in his weekly update to state federations. Special thanks to Gary, Indiana, the Massachusetts Federation of Teachers and the Overseas Federation of Teachers for contributing more than 100 percent of their minimum goals. Also noteworthy is the pledge of Local 1274 in Illinois, a local of some 1,600 members, in collecting $100,000. All contributions made to the fund since Hurricane Katrina's landfall Aug. 28 are now tax deductible to the extent permissible by the law. To make a donation online, go to http://www.aft.org/katrina. Note that the online donation form provides a field to indicate your local/affiliate, so that your donation will count toward your local or state campaign.

EMPLOYER COST OF WORKER HEALTH BENEFITS SLOWS AS EMPLOYERS REDUCE CHOICE, SHIFT COSTS TO EMPLOYEES
U.S. employers' healthcare costs in 2005 increased at the slowest rate since 1998, in large part because of a shift of costs onto employees, according to a nationwide survey by Mercer Health & Benefits. According to the survey of 2,999 employers nationwide, employers' healthcare costs rose 6.1 percent in 2005, compared with 7.5 percent in 2004, 10.1 percent in 2003 and 14.7 percent in 2002. The average cost of company health plans increased from $6,679 per employee in 2004 to $7,089 per employee in 2005, the survey found. Employer spending on health coverage would have increased 10 percent in 2005 without the shift in cost to employees and changes to health plans, according to the survey. Many employers increased deductibles and co-payments for medical services and prescription drugs instead of raising premiums, increasing costs for those who use health benefits most. Overall, 63 percent of employers offered health insurance, compared with 66 percent in 2004. Employers also are trying to cut health benefit costs by eliminating the number of higher-priced plan options offered to employees. According to the survey, 8 percent of all large employers and 31 percent of those with 20,000 or more employees reduced the number of plan choices.

ONE IN FIVE CALIFORNIA HEALTHCARE DOLLARS GOES TO INSURANCE PAPERWORK
Billing and insurance paperwork consume at least one-fifth of California’s privately insured health spending (currently estimated $26 billion), according to a new study published Nov. 10 in Health Affairs. If the state adopted a universal single-payer insurance system, California would save from $18 billion to $21 billion per year by eliminating this paperwork, the author estimates. Projected nationally, these figures indicate that approximately $230 billion of health spending was devoted to insurance administration in 2005, with estimated savings of between $161 billion and $184 billion from reduced billing, marketing and other insurance paperwork tasks. Researchers led by University of California, San Francisco professor James G. Kahn analyzed administrative expenses at hospitals, doctors’ offices and private insurance companies, separating billing and insurance costs from other administrative tasks such as quality improvement efforts. Using conservative estimates, they found that: private insurers spent 8 percent of their premiums on billing, marketing and other financial activities; physician offices spent 14 percent of revenues and hospitals 7 to 11 percent of revenues on these activities. Overall, 21 percent of private health spending went to billing-related tasks, and an additional 13 percent of spending went to non-billing administrative functions. Only 66 percent went to medical care.

WAL-MART CONFERENCE REPORTS SAY COMPANY INCREASES MEDICAID SPENDING, DECREASES WAGES
Before you do your Christmas shopping this year, you may want to think about what some low prices are costing you. According to a study commissioned by Wal-Mart, the retailing giant, the company increased Medicaid expenditures by an average of $898 per employee. Presented at a Nov. 4 conference commissioned by Wal-Mart to examine its impact on the U.S. economy, the Medicaid study, conducted by economist Michael Hicks, a professor at the Air Force Institute of Technology, examined the impact of Wal-Mart on government aid programs. Hicks found that Medicaid expenditures increase by 1.5 percent for every 1 percent increase in market share for Wal-Mart. The study also determined that government cash aid to families decreases by 3.3 percent for every 1 percent that the market share of Wal-Mart increases in a state. Other studies at the conference indicate that Wal-Mart decreases wages in the communities in which it operates.

ON THE LIGHTER SIDE: IRISH NURSING HOME KEEPS SPIRITS UP WITH OWN PUB
A nursing home in Ireland has hit on a cheery way to keep up the spirits of its elderly patients -- by providing its own pub. St Mary's Hospital in County Monaghan, near the Irish border with Northern Ireland, believes ready access to a good pint may help its patients -- average age 85 -- live longer. "We would say the whole social aspect of life does extend the years -- it means the patients aren't bored to death," Rose Mooney, assistant director of nursing told Reuters. The pub, which opens at 11 a.m. and closes at 9 p.m. and charges normal bar prices, had also led to an increase in the number of visitors, she said. Having its own bar made the hospital, which has around 140 patients, unique in Ireland, she added.

SAVE TIME AND MONEY ON BUDGET CAR RENTALS
As an AFT member, you’re already entitled to special discounts on Budget Car Rentals. Visit the AFT Web site http://www.aft.org. Now renting a car for a weekend getaway or holiday travel is even easier. By joining Fastbreak, Budget’s express service, you can skip the line and go directly to your car. Enrolling in Fastbreak is easy, and, once you enroll, you will receive a personal identification number (BCN) that you can use immediately on your next reservation. On your first Fastbreak rental, just stop at the counter to present your driver's license and the credit card listed on your enrollment form. After that, you won't have to stop again. On all your future rentals, your paperwork will be ready when you arrive so you can proceed quickly to your car. To sign up, call 800/455-2848 or visit http://www.cendantcarrental.com/budget/assoc/index.html?T544500.

QUOTE OF NOTE: MEDICARE PART D
"Why do they make it so difficult for old people [to choose a Medicare drug plan]? The government is supposed to make it easier for us. Instead they make it impossible."

Serafina Paolino, 82
New York Daily News
Nov. 16, 2005

WEB SITE OF THE WEEK: http://www.workingamerica.org/jobtracker/
Job Tracker, Working America’s online database, helps you find the companies in your area that are exporting jobs, endangering workers' health or involved in cases of violations of workers' rights under the National Labor Relations Act. The AFL-CIO community affiliate’s database contains information on more than 60,000 companies nationwide. Just enter your Zip code or state and you’re on your way.