• Part D Deadline Passes, Administration Declares ‘Mission Accomplished’
• Medicare Says Low-Income People Overcharged
  for Drugs
• Social Security and Medicare Financial Picture Darkens
• AFT Helps Turn Back Bill To Weaken Health Insurance Coverage for Seniors, Disabled
• Energy Dept. To Favor Contractors Offering Fewer Benefits
• Deficits Up, Poll Numbers Down
• Drug Makers Pay Doctors To Criticize Generic Drugs
• Drug Company Ads Often False, Misleading
• NYSUT Delegates Approve Merger with NEA-New York
• Have Fun for Less Money with AFT PLUS
• Quote of Note: Part D Coverage
• Web site of the Week: http://www.americanprogress.org/

PART D DEADLINE PASSES, ADMINSITRATION DECLARES ‘MISSION ACCCOMPLISHED’
In spite of a last-minute rush to sign up, between 5 million and 7 million eligible seniors (of some 16 million who otherwise lacked drug coverage) failed to enroll in the Medicare Part D program. HHS secretary Mike Leavitt wasted no time in claiming victory, touting a figure of some 38 million enrollees a day after the May 15 deadline. Leavitt’s number includes those automatically enrolled in Part D as well as seniors covered by the military, Veterans Administration, unions, employers, other plans and HMOs. Only 30 percent of seniors think the plan is working, but, in the end, fear of the sign-up penalty drove many to enroll. In the final week before the deadline, the Centers for Medicare and Medicaid Services (CMS) eliminated the late-enrollment penalty for low-income seniors, but much work remains to be done to overhaul the drug program. A recent Families USA report shows that only 24 percent of the 7.2 million people eligible for low-income subsidies have been approved, partially due to an asset test and insufficient information about the benefit. Other seniors who had no drug coverage and failed to sign up will now be subject to a 1 percent per month penalty for every month that passes until they do enroll. The next enrollment period opens in November, so the minimum penalty for those eligible this year will be 7 percent. President Bush and Congress steadfastly refuse to give most beneficiaries more time to enroll. A New York Times/CBS poll shows that 81 percent of those 65 and older support a deadline extension.

"Congress should recognize that more has to be done to reach those most in need, so they do not suffer any more as a result of this flawed drug program," said George Kourpias, president of the Alliance for Retired Americans. "The deadline must be extended." AFT retiree activists and staff joined some 250 seniors and Democratic congressional leaders in a Capitol Hill rally to extend the deadline May 10 in Washington, D.C. A recent Government Accountability Office report says one-third of calls made to Medicare help line operators are answered inaccurately or with inadequate information. In recent weeks, there has been a "growing rebellion" by both Democratic and Republican lawmakers against President Bush on the issue. "I think it's fair and reasonable to eliminate the penalty" for 2006, said Rep. Nancy Johnson (R-Conn.), a leading supporter of the law who heads the House Ways and Means subcommittee on health. On May 11, 47 senators, 44 Democrats and three Republicans, signed a letter by Sen. Bill Nelson (D-Fla.) urging the administration to extend the deadline and lift the penalties for the rest of the year. The chances for change improved dramatically last week when Sens. Charles Grassley (R.-Iowa) and Max Baucus (D-Mont.), introduced legislation to waive the penalty for everyone. They are chair and ranking minority member, respectively, of the Senate Finance Committee, which has jurisdiction over Medicare.

MEDICARE SAYS LOW-INCOME PEOPLE OVERCHARGED FOR DRUGS
As President Bush made a final push for enrollment, Medicare officials reported that some low-income beneficiaries were being overcharged at pharmacies, while others were assigned in error to drug plans different from the ones they had chosen. In a recent memorandum to insurers, the Bush administration said it had received numerous complaints that poor people eligible for both Medicare and Medicaid were being charged incorrect co-payments at the pharmacy. In general, the co-payment for such beneficiaries is not supposed to exceed $3 or $5 for a prescription, and poor people living in nursing homes are not supposed to have any co-payments. The administration said some beneficiaries had been charged too much because insurers had not updated their computer systems to show the correct co-payment amounts. On May 1, the CMS assigned hundreds of thousands of low-income people to Medicare drug plans chosen at random by the federal government. In some cases, these assignments prevailed over choices made by beneficiaries. Medicare officials also acknowledged problems and discrepancies in some of their enrollment records, listing membership in various drug plans. In January, California, like many other states, set up an emergency program to help low-income people having difficulties filling prescriptions under the new Medicare law. Stan Rosenstein, the Medicaid director in California, said last week, "We are spending a half-million dollars a day on our program because a number of people are still having problems." Because of continuing problems with Medicare, the California legislature this week extended the drug program through Jan. 31, 2007. Beatrice Disman, a Social Security official, said her agency had disqualified many people because their assets exceeded federal limits ($11,500 for an individual, not counting the value of a home and a car).

SOCIAL SECURITY AND MEDICARE FINANCIAL PICTURE DARKENS
The financial condition of Social Security and Medicare worsened over the year, according to the report released May 1 by the trustees who monitor the fiscal health of the Medicare and Social Security programs. Three of the trustees are Cabinet secretaries of the Bush administration. The annual report predicts the Medicare hospital insurance trust fund will be depleted by 2018, two years earlier than reported last year. Social Security will reportedly see its trust fund depleted by 2040, one year earlier than previously stated. The new predictions are attributed to the skyrocketing costs of healthcare. However, political motives to cut Medicare benefits and revive the privatization debate can safely be assumed to have a role in how the new data is being framed. The 2006 report was delayed a month because of a dispute between administration officials and congressional leaders over the renomination of Thomas Saving and John Palmer, the two independent trustees whom the president recently gave recess appointments, breaking precedent by reappointing them and bypassing congressional approval.

Manufactured Crisis

The most disturbing news in the report is not that the Medicare hospital trust fund will run out of money in 2018 but that the report itself has begun a process that will allow the White House and Congress to take a meat ax to the program, should the slide continue. The 2003 Medicare law includes a provision that requires Congress to consider ways to lower the percentage of Medicare funding that comes from general revenues if trustees two years in a row predict that the threshold will exceed 45 percent. This year’s trustees projected that the 45 percent level would be reached in fiscal year 2012. Marilyn Moon, a healthcare economist and former Medicare trustee, said that the legislative trigger "could give the president a good rationale for having a major Medicare reform proposal in next year's budget" but added that the 45 percent indicator is "a very phony crisis." The AFT, AFL-CIO and Alliance for Retired Americans back an approach that that would rein in underlying healthcare costs, reform Medicare and bolster its finances. In addition the President’s budget seeks a $36 billion cut in Medicare and $14 billon cut in Medicaid. Ultimately, the solution to Medicare’s problems will have to come within an effective national healthcare program.

AFT HELPS TURN BACK BILL TO WEAKEN HEALTH INSURANCE COVERAGE FOR SENIORS, DISABLED
The AFT and 22 other members of the Leadership Council of Aging Organizations called on the Senate to reject a bill (S. 1955) that would allow insurers to effectively exclude older people with chronic health problems such as diabetes and cancer, people with disabilities and other hard-to-insure individuals. The so-called Health Insurance Marketplace Modernization and Affordability Act of 2005, sponsored by Sens. Mike Enzi (R-Wyo.) and Ben Nelson (D.-Neb.) would affect the more than 86 million people in state-regulated insurance markets. The bill, opposed by insurance commissioners in 39 states, would allow the federal government to preempt stronger state benefit protections, rationing plans by price. According to the LCAO, “While the bill’s proponents tout the benefits of bare bones plans for young and healthy individuals, any gains under this legislation will come at the expense of those individuals who need healthcare the most.” The AFT lobbied successfully against a motion to cut off debate, forcing the Republican leadership to withdraw the dangerous legislation.

ENERGY DEPT. TO FAVOR CONTRACTORS OFFERING FEWER BENEFITS
The U.S. Department of Energy has announced that it will not reimburse contractors if their pension and medical benefits exceed "market-based benchmarks." Although DOE in its April 27 announcement said it will continue to reimburse contractors for costs for current and retired contractor employees' defined-benefit pension plans and medical benefit plans under existing contract requirements, for new contractor employees, DOE will only reimburse the costs of their "market-based defined-contribution pension plans [similar to 401(k)s] and market-based medical benefit plans." As an added incentive, the department will reimburse "contractor costs to provide a one-time option to employees currently in defined-benefit pension plans who may wish to transfer to a new market-based defined-contribution plan." In other words, employers with a good medical or pension plan are at a disadvantage when competing for contracts from the Department of Energy—even if their overall bid is more economical to the government. "It's an absolute outrage for the federal government to serve as the model for policies that betray the public trust by hurting hard-working Americans and threaten their futures," said AFT president Edward J. McElroy. After the AFT alerted key lawmakers in Congress about the issue, senior Democrats in both the House and Senate sent letters to President Bush demanding that he rescind the policy and drafted legislation to stop the DOE from going forward with the regulation

DEFICITS UP, POLL NUMBERS DOWN
Public confidence in the president and Republican Congress has plunged to the lowest levels of the Bush presidency, according to a new Washington Post-ABC News poll. Dissatisfaction with the administration's policies in Iraq has overwhelmed other issues as the source of problems for President Bush and the Republicans, but voters prefer Democrats in nine other categories—including fighting terrorism. The survey suggests deep pessimism about the direction of the country—69 percent said the nation is now off track. The president’s job approval rating now stands at 33 percent, a new low for him in Post-ABC polls. According to the report, the president’s disapproval rating among Republicans has nearly doubled in the past month, from 16 percent to 30 percent. Nearly nine in 10 Democrats and seven in 10 Independents do not like the job Bush is doing as president. His fading popularity is matched by waning popular support for the Republican-held Congress. Only a third of the country approves of the job Congress is doing—identical to the president's poor job performance rating—and a 10-year low. Even Republicans are divided over the performance of the Republican-controlled Congress: 49 percent approved while 47 disapproved. Seven in 10 Democrats and political Independents shared the negative view. A USAToday/Gallup poll released last week showed President Bush's overall approval rating at 31 percent, the lowest of his presidency in that poll. Despite surging deficits, the Senate doled out additional tax cuts for millionaires. The extension of these tax benefits for the wealthy was the cornerstone of a $70 billion package of tax cuts the Senate adopted, 54-44, on May 11. The House had voted, 244-185, for the $70 billion in tax cuts the day before.

DRUG MAKERS PAY DOCTORS TO CRITICIZE
GENERIC DRUGS
The makers of sleeping pills are now paying doctors to criticize competing drugs, according to Daniel Carlat, a professor at the Tufts University School of Medicine. Carlat says widespread advertising for brand-name sleeping pills, such as Sepracor's Lunesta and Sanofi Aventis' Ambien, have made the medications household names, but most people have never heard of trazodone, a widely prescribed generic drug that psychiatrists frequently prescribe as a sleep aid. Trazodone carries no risk of addiction, is effective as a sleep aid, has a long safety record and costs as little as 10 cents per pill, Carlat writes in a May 9 op-ed piece in the New York Times. In recent years, several articles written by physicians have appeared in professional journals that criticize trazodone, using rhetoric that minimizes its advantages and emphasizes its drawbacks, he notes. Carlat says that the articles, which claim to present balanced reviews of the scientific literature on sleeping pills, were sponsored by companies such as Sanofi-Aventis, Sepracor and Takeda Drugs, firms that stand to gain from trazodone's downfall. He suggests discouraging negative marketing disguised as scientific commentary by mandating fuller disclosure of links between drug companies and authors. Carlat recommends that companies be required to disclose the exact nature of a doctor's involvement in preparing a sponsored article, as well as the dollar amount of his or her fee.

DRUG COMPANY ADS OFTEN FALSE, MISLEADING
Drug companies often overstate the benefits of their medications, understate risks and promote unapproved uses in advertisements to physicians and consumers, according to a report released on May 3 by the New Jersey Public Interest Research Group. The study was also sharply critical of the U.S. Food and Drug Administration for failing to regulate the ads. According to the report, about 62 percent of the false or misleading ads targeted physicians, understating or misrepresenting the risks of medications in one-third of those cases. In addition, NJPIRG said that drug companies in a number of cases concealed negative clinical trial results or misreported results; and one-third of drug companies that received letters from FDA received more than one letter for the same problem. The report recommends that states establish comprehensive, searchable databases of clinical trials and require drug companies to register all trials. In addition, NJPIRG suggests giving individuals the right to file lawsuits over false or misleading drug ads. "Vioxx may be the poster child [for the problem],” said Abigail Caplovitz, one of the authors. “But this is not a matter of a single bad apple—85 companies [received letters from the FDA]." She added that lot of drug marketing isn't being monitored at all.

NYSUT DELEGATES APPROVE MERGER WITH NEA-
NEW YORK
Delegates to the annual convention of the New York State United Teachers completed an eight-year effort to unite with NEA-New York in a May 5 vote to create a powerful merged statewide union. "This is a historic day," NYSUT president Richard Iannuzzi told the 2,000 delegates meeting in Rochester. "Uniting with NEA/NY gives us a stronger, more credible voice for our professions, our students, our patients and the working families of New York." The merger brings together the 535,000 members of NYSUT with NEA/NY's 35,000 members. NEA/NY delegates approved the agreement in April. The merger is effective Sept. 1, 2006. The new, united organization will maintain New York State United Teachers as its name and will be headquartered in Latham, N.Y. New York joins Florida, Minnesota and Montana as the other states with merged AFT-NEA state organizations.

HAVE FUN FOR LESS MONEY WITH AFT PLUS
The AFT PLUS Entertainment Discount Program makes going out more affordable than ever for AFT members. Entertainment PLUS Discounts help you and your family save money when you want to enjoy movie rentals, live theatre, museums, sporting events, theme parks, aquariums, ski lift tickets and much more. Check out local entertainment, and when planning family travel, your destination city. When you sign up for the program, you earn 100 "Advantage Points" to use for your future entertainment. You earn one additional point for every dollar you spend through the program. To find out more, call 800/565-3712 and use ID #744387769, Mon. - Fri., 9 a.m. - 6 p.m. (EDT) or visit www.unionplus.org/entertainment.

QUOTE OF NOTE: Part D coverage
"No amount of exaggeration can disguise two central facts: over 80 percent of impoverished people with Medicare eligible for a comprehensive drug benefit have not enrolled; nearly 51 percent of the people with Medicare who had no drug coverage on Jan. 1 still have no coverage."

Robert Hayes, President
Medicare Rights Center
May 10, 2006

WEB SITE OF THE WEEK: http://www.americanprogress.org
Not for policy wonks only! Stretch your horizon with the Center for American Progress’s thought-provoking positions on issues like immigration, trade, taxes and Medicare Part D. A challenging alternative to the conventional wisdom in Washington.