July 6, 2009

• Update on Healthcare Reform
• Senate Panel Questions Private Insurers' Credibility
• Employers' Healthcare Costs Expected To Rise 9 Percent in 2010
• CEO Pay at Drug Companies: A Bitter Pill for Seniors
• Drug Industry Pledges To Cut Costs in Part D Coverage Gap
• Save on Dental Care with AFT +
• Remember the Peace Corps?
• Quote of Note
• Web site of the Week

UPDATE ON HEALTHCARE REFORM
As Congress returns from its July 4 recess, a snapshot of the ever-changing situation on healthcare reform reveals:

• Democrats on the key Senate Health, Education, Pensions and Labor Committee are readying a plan that includes a government-run insurance option and a $750-per-worker annual fee on companies of 25 or more that do not offer coverage to their employees. The Congressional Budget Office puts the cost of the proposal at $611.4 billion over 10 years, down from $1.6 trillion two weeks ago, but this bill does not include other items such as an expansion of Medicaid, which do not fall within this committee's jurisdiction.
• Senate Finance Committee members are working on a separate bill, likely to include co-operatives instead of a government-run plan, taxation of benefits and much less generous subsidies for middle- and low-income people. Both Senate plans would require insurance companies to sell coverage to any applicant without charging higher premiums for pre-existing medical conditions. The Finance package is expected to include more than $300 billion in new taxes on working families' health insurance benefits that millions receive from their employers. The leading proposal would tax as income any premiums exceeding about $17,000 a year, starting in 2013.
• House Democratic leaders unveiled a sweeping 852-page draft health reform plan June 19 that would require most individuals to obtain health insurance, require employers to offer health insurance or contribute funds on workers' behalf, expand Medicaid eligibility, and create a new public health insurance option. The plan would require insurance companies to accept all applicants regardless of health condition, end overpayments to Medicare Advantage plans, eliminate or greatly reduce the coverage gap in the Part D drug program and end co-payments for Medicare preventive services. This is the strongest congressional effort to protect and help working families and aligns with President Obama's health priorities.
• A new poll conducted by CNN and the Opinion Research Corporation, released July 1, found that 51 percent of people favor the president's health reform plan while 45 percent oppose it. The poll also found that 55 percent think the healthcare system needs "a great deal of reform," while 40 percent say only some reform is needed.

SENATE PANEL QUESTIONS PRIVATE INSURERS' CREDIBILITY
As the public health plan option, adamantly opposed by insurers, is considered in the Senate, the Senate Commerce Committee released a report in late June exposing greedy and dishonest acts by insurance companies. The committee also heard testimony last week from three healthcare specialists, including the former vice president of communications of big insurer Cigna. The witnesses stated that insurers sell "junk" policies that do not cover needed care and the companies have bilked consumers by systematically underestimating the cost of for out-of-network care. The tactic forces many patients to pay more to use doctors and hospitals outside their insurer's network. As a result, consumers have paid billions of dollars in medical bills that were supposed to be paid by insurers.

EMPLOYERS' HEALTHCARE COSTS EXPECTED TO RISE 9 PERCENT IN 2010
Healthcare costs for U.S. employers are expected to increase by 9 percent in 2010, significantly outpacing inflation and wage increases, according to a report released June 18 by PricewaterhouseCoopers' Health Research Institute. A key cause of increased medical costs in 2010 will be workers accelerating their use of healthcare in anticipation of losing their jobs and their health insurance coverage. To cope with the increases, 42 percent of employers said that they will push more of their healthcare costs on to employees in 2010 and that they expect greater responsibility by workers for their personal health. A similar percentage said they expect to increase medical cost sharing through plan design changes.

CEO PAY AT DRUG COMPANIES: A BITTER PILL FOR SENIORS
Struggling to afford your medicines? Wondering where your prescription money goes? The AFL-CIO's new Executive PayWatch Web site reports that much of it goes straight into the CEOs' wallets. A few examples of annual pay: Johnson & Johnson $29.1 million, Abbott Laboratories $28.3 million, Merck $25.1 million, and Wyeth $24.2 million. The 2003 Medicare Part D drug law has proven to be a financial windfall larger than even the most optimistic Wall Street analysts have predicted. The law prohibits Medicare from negotiating volume discounts with drug manufacturers, and as a result retirees in the now-privatized Part D plans pay 58 percent more than under plans administered by the Department of Veterans Affairs, which is allowed to negotiate price discounts. The AFT supports S. 330 and H.R. 684 to create a public Part D plan that uses the government's bulk purchasing power to obtain lower prices.

DRUG INDUSTRY PLEDGES TO CUT COSTS IN PART D COVERAGE GAP
The Pharmaceutical Research and Manufacturers of America (PhRMA) announced June 20 an agreement to discount drugs for enrollees in the Medicare Part D drug benefit whose expenses have caused them to enter the coverage gap or doughnut hole. The pharmaceutical companies offered to provide a 50 percent discount to most beneficiaries on brand-name medicines covered by a patient's Part D plan when purchased in the donut hole. The agreement would allow the entire negotiated price of the Part D covered medicine purchased in the coverage gap to count toward the beneficiary's out-of-pocket costs, thus lowering their total out-of-pocket spending. The new Medicare Prescription Drug Discount Program is scheduled to begin July 1, 2010. Cautioning that the "devil is in the details," the Medicare Rights Center, a New York-based consumer organization, said that the discount will mean that more older adults and people with disabilities will be able to continue taking their medicine as prescribed by their doctor instead of choosing which drug they can afford to take. Other groups said that they preferred the discount be written into law rather than relying on voluntary compliance.

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REMEMBER THE PEACE CORPS?
Coming from all walks of life and representing the rich diversity of the American people, volunteers range in age from college students to retirees. Every Peace Corps volunteer's experience is different. From teaching English to elementary schoolchildren in Zambia to launching a computer learning center in Moldova to promoting HIV/AIDS awareness in South Africa to working on soil conservation in Panama, volunteers bring their skills and life experiences where they are needed most. Volunteers receive full medical and dental care, a monthly living allowance and an accrued re-adjustment allowance that is payable when service is complete. Normally, living allowances will not interfere with Social Security benefits. Volunteer housing is modest but comfortable. Find out more: http://www.peacecorps.gov/index.cfm?shell=learn.whovol.older

QUOTE OF NOTE

"The ‘chicken little' letter from the big insurance companies [opposing a public plan in healthcare] shows that their true agenda is to hold onto their record profits and bonuses by preventing Americans from being able to choose between private insurance and a quality public health insurance option."

John Sweeney, President
AFL-CIO
June 23, 2009

WEB SITE OF THE WEEK: www.aarp.org/doughnuthole
Reached the Medicare Part D coverage gap (doughnut hole)? This site shows you if and when you fall into the doughnut hole, identifies up to three different medications that are less expensive for each drug you're taking and recalculates your costs if you switch to less expensive similar prescription medicines.

Contributors and sources: Bill Cunningham, Lauren Luchi, New York Times, Associated Press, CQ Politics, Roll Call, CNN, BNA Healthcare Daily Report, Alliance for Retired Americans Friday Alert, AARP Web site, Kaiser Health Policy Report. Frank Stella, editor; Mary Boyd, copy editor; Janelle Bowe, design.