• Most Medicare Beneficiaries Do Not Understand 'Donut Hole' Coverage Gap
• Obama Administration Likely To Reduce Payments to MA Plans
• Spending on Direct-To-Consumer Rx Drug Ads Drops
• Senate Leaders Discuss Healthcare Overhaul Legislation
• AARP Hires Outside Investigator To Review Sales of Limited-Coverage Plans
• AFL-CIO Ad Campaign Urges Passage of Employee Free Choice Act
• Quote of Note: Medicare Donut Hole
• Web Site of the Week

 Most Medicare Beneficiaries Do Not Understand 'Donut Hole' Coverage Gap
Sixty-two percent of Medicare beneficiaries do not fully understand the so-called "donut hole" in the prescription drug benefit, and 28 percent do not understand the coverage gap at all or are not aware of the gap, according to a survey released Nov. 17 by Medco Health Solutions. The telephone survey of 1,000 randomly selected Medicare beneficiaries nationwide also found that two-thirds of respondents in the coverage gap are unable to identify what spending counts toward the gap. In 2008, once a patient's drug costs reach $2,510, he/she must pay full cost for their medications until their out-of-pocket spending reaches $3,850. At that point, coverage resumes. Many people do not understand that the spending of both the patient and the health plan count toward the gap, causing them to fall into the hole months before they anticipate. Help in understanding Medicare Part D coverage—and Medicare in general—is available to AFT members at a special Web site sponsored by AFT and NYSUT and administered by the Medicare Rights Center. This is especially important now until Dec. 31 when the open enrollment period for switching plans ends.

 Obama Administration Likely To Reduce Payments to MA Plans
The incoming Obama administration and Democratic-led Congress likely will cut payments to private Medicare Advantage plans in 2009, an aide to Senate Democrats said Nov. 24 during a Capitol Hill briefing. Federal payments to MA plans cost the government $94 billion annually. Democrats say that $15 billion of that amount is excessive and the so-called overpayments could be used for other things, such as overhauling the U.S. healthcare system. Private MA plans on average are paid an estimated 13 percent more per beneficiary than traditional Medicare, according to the Medicare Payment Advisory Commission, the official government watchdog of Medicare costs.

 Spending on Direct-To-Consumer Rx Drug Ads Drops
Spending on direct-to-consumer advertisements for medications has decreased for the second consecutive year, according to a study released in November by TNS Media Intelligence, a leading advertising industry research firm. The report states that spending on such ads reached a high of $5.43 billion in 2006 and decreased by 3 percent to $5.26 billion in 2007. For the first eight months of 2008, spending on the ads totaled $3.18 billion, a 6.3 percent decrease from the same period in 2007. Spending on ads for established medications increased by 5.2 percent in 2007, while spending on ads for new medications decreased by 6.5 percent. Researchers attributed the decrease in part to fewer new medications that target a broad population. In addition, pharmaceutical companies have begun to wait longer before they begin to advertise new medications. Ads for new medications began as long as 12 months after their approval in 2008, compared with 10 months in 2007 and between six and seven months from 2004 through 2006. Erik Gordon, associate dean and head of biomedical industry programs at Stevens Institute of Technology, attributed the decrease in spending on DTC ads largely to efforts by pharmaceutical companies to reduce costs and to criticism from lawmakers and others that such ads overstate benefits and understate risks.

 Senate Leaders Discuss Healthcare Overhaul Legislation
Senate Health, Education, Labor and Pensions Committee Chair Edward Kennedy (D-Mass.) and Finance Committee Chair Max Baucus (D-Mont.) met Nov. 19 with other Senate leaders to discuss plans for healthcare overhaul legislation to be proposed next year. Baucus, who in early November announced details of his universal healthcare proposal, said that Congress should move very quickly to build momentum for a comprehensive overhaul. He added that a healthcare system overhaul must be part of any successful economic recovery plan. Kennedy, who announced plans for drafting healthcare legislation in mid-November, did not speak with reporters. Both Kennedy and Baucus have said that a healthcare overhaul bill likely would not include offsets for its full cost. Sen. Charles Grassley (R-Iowa), the ranking Republican on the Finance Committee, said recently that full funding for any reforms would be the big issue. House Majority Leader Steny Hoyer (D-Md.) on Nov. 19 said that while a healthcare system overhaul could increase the national deficit in the short-term, in the long-term it would stop adding to the deficit. Hoyer's comments are notable because he is considered the chief advocate of the Blue Dog Coalition, a group of Democratic budget hawks, and the pay-as-you-go policy in the House Democratic leadership. "Our objective," Hoyer said, is going to be [to] have a pay-go-compliant policy over the longer term, [but that] may not be possible in the short term."

 AARP Hires Outside Investigator To Review Sales of Limited-Coverage Plans
AARP has hired an outside investigator to look into sales of its limited-benefit health insurance plans after a Senate inquiry found evidence of deceptive marketing. AARP said in mid-November that it would suspend marketing and sales of the plans after Sen. Chuck Grassley (R-Iowa) said the plans are misleading and do not work in typical situations. Offered by UnitedHealth Group, the AARP plans are aimed at people ages 50 to 64 and have about one million members. The plans cap the amount that UnitedHealth pays for medical services and do not provide catastrophic coverage. Grassley, ranking member of the Senate Finance Committee, said marketing of the plans was misleading because it suggested that the plans offered comprehensive coverage. He also asked AARP to disclose profits made from sales of the plans.

 AFL-CIO Ad Campaign Urges Passage of Employee Free Choice Act
A new nationwide TV ad campaign launched on Nov. 16 is intended to build momentum behind efforts to pass the Employee Free Choice Act when the new Congress convenes in January. Sponsored by the workers' advocacy group, American Rights at Work, the ad and other new videos are available on the group's Web site. The Employee Free Choice Act would help level the playing field for workers by giving them a fair and direct path to form unions, help employees secure a contract in a reasonable period of time and toughen penalties against employers who violate the law. President-elect Barack Obama and Vice President-elect Joe Biden both co-sponsored the bill in the U.S. Senate, and a majority of the incoming Congress solidly backs the measure. Join the more than 1 million people who already have signed a petition that calls on the new Congress to immediately pass the legislation, and the new president to sign it, when they take office in 2009.

 Quote of Note: Medicare Donut Hole
"At this point the majority of [Medicare Part D] members do know that there's a gap in their coverage, but they don't understand how they arrive there. People know there's a gap but there's still lots of confusion about how they get there."
Woody Eisenberg, Chief Medical Officer, Medco Health Solutions, Nov. 18, 2008

 Web Site of the Week: https://unionshop.aflcio.org/For_Union_Kids_C23.cfm?Link_ID=7&
Looking for something fun and educational to get for your grandchildren this holiday season? The AFL-CIO's Union Shop Online has lots of great children's items. You can help teach a child about the importance of the labor movement with a Rosie the Riveter jigsaw puzzle or the Community of Workers Coloring Book displaying the diverse range of work and workers. Or check out the great selection of books for children of all ages. Start with Don Brown's classic tale, Kids Blink Beats the World, about a group of powerless kids who confront some of the world's most powerful adults—and win. Best of all, buying at The Union Shop Online is a way to support America's workers and share your values with family and friends.

Contributors and sources:New York Times, Seattle Post-Intelligencer, Albany Times Union, Associated Press, Congress Daily, The Hill, CQ HealthBeat, AFL-CIO Now, Inside AFT, Alliance for Retired Americans Friday Alert, Kaiser Health Policy Report. Frank Stella, editor; Mary Boyd, copy editor; Francene Foote, design.