'I'm from the government and I'm here to help'

by Don Kuehn

Back in the 1980s, Congress passed a bill that offered catastrophic health insurance to senior citizens. When seniors rebelled at the high cost of premiums, the law was quickly repealed.

This year the government is again trying to "help" seniors by reforming Medicare and adding a prescription drug benefit to the health program depended upon by 40 million Americans. Critics believe that the strategies both houses of Congress are pursuing will only weaken (and perhaps doom) the 38-year-old program.

Before Medicare was created in 1965, typical senior citizens spent about 19 percent of their income on healthcare. The law cut that cost about in half. Last year, those Medicare recipients who are not in HMOs spent, on average, 22.3 percent of their incomes on healthcare ($3,757), and that figure is projected to rise to almost one-third by 2005, according to the Urban Institute.

The House and Senate reform schemes differ radically. A conference committee will iron out the differences before a final draft can be voted on.

Both bills call for a monthly premium of about $35. In the Senate version, the deductible is $275. Beyond that, the co-pay is 50 percent up to $4,500 per year. In the House bill, there is a $250 deductible and a co-pay of 20 percent for costs up to $2,000 a year. Low-income individuals would have lower (or no) premiums, deductibles and co-pays.

Costs like these trigger recollections of the catastrophic care insurance fiasco in the 1980s: The people who need it the most can afford it the least.

Dividing the negotiators on the conference committee are ideological and philosophical issues over the role of government and privatization in healthcare. Both bills give beneficiaries the option of staying in Medicare to get a drug benefit, or getting out in favor of a private plan or HMO.

Medicare patients know firsthand the unsettling role that privatization can have on their benefits. Since 1999, HMOs have dumped more than 2 million seniors nationwide. Doctors and local hospitals also have withdrawn from Medicare HMOs after the government scaled back its reimbursements to providers.

The Republican-written House plan would give private insurance plans a much larger role in Medicare through a system of "premium support." This is politician-speak for a financial subsidy to privatize Medicare.

The Senate plan is more bipartisan. It proposes a government-run "fallback" system that would kick in a drug benefit in areas where there is only one, or no, private plan available. Both versions would leave seniors with major coverage gaps and would fail to provide adequate incentives for employers to continue drug coverage for retirees.

The lines in the sand were drawn before the conferees even took their seats. A cabal of 41 House Republicans vowed to oppose any conference report that does not include "premium support." On the other side are 36 lawmakers, mostly Democrats, who have pledged to defeat any proposal that includes premium support or omits the "fallback" provision.

A poll by the Pew Research Center for the People and the Press indicates that fully half of those polled said the proposed benefits would not go far enough, while only 21 percent said the proposed plans would be "just right."

The AFT, most labor unions and the Alliance for Retired Americans opposed the final bills in both houses. Many retirees fear that any federal plan would undermine prescription benefits they already have from their employers or under private policies.

Today, medications have become the health management option of choice for most Americans, but they are expensive. Many of us are familiar with Zocor and Celebrex from their ubiquitous television advertising. Zocor costs more than $1,600 a year and Celebrex costs more than $2,000 a year, according to a study by Families USA.

Drug prices have risen by more than the general rate of inflation and more than 10 million seniors have no drug coverage of any kind. By 2006, the out-of-pocket expense for the typical senior will be more than $1,454.

On Sept. 10, the conferees passed a stopgap measure to approve government-subsidized prescription cards offered by pharmacies.

The Government Accounting Office (GAO) estimates savings on medicines under the plan at 10 percent to 15 percent. Unfortunately, the conference committee program only requires that a "substantial" share--not all--of the discounts negotiated with drug companies be passed on to the cardholder.

The cost to seniors would be up to $25 a year. These annual fees would reduce potential savings even more. There is, however, a provision that would grant low-income seniors (below $12,123 per year) a subsidy of $600 to further defray drug costs.

If it's signed into law, this program would begin within six months and expire when long-term drug benefits in the Medicare bill begin in 2006.
 

What can seniors do now?

While conferees wrangle over prescription drug benefits and their fiscal and political ramifications on Medicare, there is something seniors can do on their own to save money on medications. They can enroll in Together Rx, a program created in 2002 by a consortium of eight drug manufacturers. It provides discounts on more than 170 drugs, and joining is free.

The sponsoring companies claim that about 920,000 cardholders (you sign up and receive a wallet card to show at your participating pharmacy) have saved more than $127 million since the program was launched.

What the future of this industry-led program will be with the announcement of the conferees' drug card is uncertain. The discounts from the pharmaceutical companies are higher than those promised under the government plan. Savings vary depending on the drug and the pharmacy's policy, but are projected to be between 15 percent and 40 percent. Some pharmacies will even cut prices on generic substitutes for cardholders. Your physician also may be able to substitute covered medications for ones you are currently taking if they are not on the list.

Participating pharmacies include Eckerd, Genovese, Rite Aid, Bi-Lo, Bruno's Supermarkets, Familymeds, Giant Food Stores, Navarro, Stop & Shop, Tops Markets and USA Drug chains.

To qualify for Together Rx, you need meet only three criteria:

• You must be a Medicare beneficiary;

• Your annual income must be less than $28,000 for singles or $38,000 for couples (higher in Alaska and Hawaii); and

• You cannot have any form of prescription drug insurance, public or private.

You can enroll, or perhaps enroll your parents as I did, by going online at http://www.together-rx.com/ or by calling 800/865-7211 for enrollment instructions.

There is no assurance that the program will continue if Congress ever gets its act together and passes a permanent plan, but taking action on your own to save on drug costs until a bill is signed into law makes good sense. After all, as we like to say around these parts, it's your money.