Evelyn Pringle October 2004
Bush and his cronies in the drug and insurance industries have a major problem. Although they developed and implemented a brilliant Medicare profiteering scheme by which they could funnel billions of tax dollars to themselves, they cannot get their hands on the money because they can't get enough seniors to sign up for the prescription drug discount card program.
They are in dire need of senior funnels.
The Centers for Medicare and Medicaid Services had projected that about 7 million senior citizens, out of the 41 million Medicare beneficiaries, would sign up for cards. However, much to the Bush gang's dismay, that has not happened.
In order to get Congress to pass the underlying bill that contains the scheme, Bush, the industry, and their allies in Congress went to great lengths. They lobbied, lied, coerced members of Congress, and threatened a Medicare Actuary with termination if he told Congress the true cost of the bill, before it passed. And in the end, the bill was passed.
That's why I think it's so funny that they now find themselves in desperate need of seniors willing to sign up for the program to act as funnels. I guess they really thought that elderly people were so gullible that they wouldn't figure out what they were up to, and that mistake is turning out to be their worst miscalculation.
Although the Bush gang will accept applications from all seniors, they are particularly interested in getting the poorest seniors into the program; because those seniors can get an automatic $1200 subsidy between now and 2006 that can be funneled back to the crooks with no questions asked.
The Lobbying, Lies, And Coercion
In order to ensure the passage of their favored version of the Medicare prescription drug bill, Bush said it would only cost $395 billion, because he was warned by Republicans that it would not pass a vote in Congress if it went over $400 billion.
As far back as 5 months before the vote, Bush knew that the top Medicare Actuary, Richard Foster, estimated it would cost as much as $551 billion. He knew that Foster said the bill would actually boost payments to private health plans by $46 billion, more than 3 times the $14 billion estimate given to Congress. He also knew that Foster determined that drugmakers would receive $100 billion more than the estimate provided to Congress while lawmakers were debating whether or not to pass the bill.
Plain and simple, Bush not only deceived seniors and members of Congress, he lied to the American tax payers and ripped off $170 billion.
Only after the bill was passed, did we find out that the thugs threatened to fire Foster, if he told lawmakers about the true cost of the bill. And only after it was passed, did tax payers find out about its $534 billion price tag.
On top of all that, this month we found out that the cost of the bill has gone up another $42 billion.
Bottom line. As a result of Bush's Medicare scam, the drug and insurance industries will receive an additional $139.2 billion in profits over the next eight years with 61% of it going for prescription drugs and $14 billion going to HMOs. (Alan Sager, Boston University School of Public Health, 4/12/04)
It's Not So Easy To Con Seniors
I can see why the Bush gang thought it could make a bundle off this scheme. About 7 million low-income Medicare beneficiaries are eligible to enroll in the prescription drug discount card program and receive the accompanying $600 annual subsidy, according to the AP/Omaha World-Herald, 9/23.
However, it looks like seniors have refused to be conned because very few signed up. While Bush stuck to his part of the bargain and spent millions of tax dollars to promote the new bill, attempts by insurance providers to lure low-income recipients into the trap with a cash subsidy even failed to increase enrollment.
So far, only 4.3 million seniors have enrolled in the program since enrollment began on June 1, according to Peter Ashkenaz of the Centers for Medicare and Medicaid Services (CMS). But even that number is deceiving because only 25% of those 4.3 million enrolled in the program voluntarily. A study by the Kaiser Family Foundation, determined that millions of people were automatically enrolled because they are participants in HMO-style Medicare plans or state pharmacy assistance programs.
Missouri Democratic candidate for Congress, Jim Newberry, says seniors aren't signing up because the program provides no savings and its too confusing. "Talk to seniors. They'll tell you," he said. "The drug companies don't have to negotiate or compete. Seniors have to choose a card. It's harder than choosing a cell-phone plan."
He calls the program "corporate welfare for pharmaceutical companies rather than financial help for seniors."
He's right, millions of seniors are confused, and for good reason. Peter Rost is my designated expert on the subject of prescription drugs (unbeknownst to him). He has 20 years of experience marketing drugs.
Rost told Independent Media why the program is not working, "the system we have today to provide discounted or free drugs to seniors and low-income families is a patch-work, that not even a highly educated person can easily master," he said.
Rost thinks the applications may be too difficult to fill out. "According to press reports some drug firms require applications that are longer than a tax return. And our government implements a system for discount cards that is so complex that very few sign up for this," he noted.
New York Congressman Joseph Crowley agrees. "Most people in my district are not signed up for a discount drug card because they do not see a value to the plan," he says.
"The (Medicare) reform bill has done zero to lower the cost of prescription drugs for American seniors and has in fact raised premiums and created a confusing system of Medicare drug discount cards," Crowly said. "This bill was passed by the pharmaceutical industry."
Sen Edward Kennedy has weighed in with his opinion of the Bush discount card scam. "Only in this administration would the words `discount card' mean seniors get the card while corporations get the discounts,'' he said.
This Escalating Cost Of Drugs
Two separate reports from Families USA and AARP, have determined that price increases for prescription drugs over the past year have offset any savings that may have been gained from drug card program.
Seniors had better not count on saving money by signing up for the program. A report released by Crowley, called "Medicare Prescription Drug Cards," analyzed the 33 discount cards available in his district in mid-August, 2004 and the prices charged for the 10 top brand-name drugs used by seniors.
The report's findings were detailed in the Howard Beach Times.com on 9/23/04. The study calculated the cost of 10 drugs using the cards and then compared it with the prices of the same drugs from three other sources: a popular online pharmacy Web site, the market rate in Canada and the price negotiated by the US Department of Veterans' Affairs.
According to the report, card prices "are significantly higher than prices for the same drugs in Canada." In fact, the average prices were 62% higher using the cards than if they were purchased in Canada. For example, a 30-day supply of the arthritis drug Celebrex was $38.69 in Canada, but $74.14 or more with a card.
The report also found card prices much higher than the prices negotiated by the Dept for Veterans Affairs. In comparison, drugs with the cards were 64% higher.
And the card prices were nearly identical to prices charged by the internet pharmacy Drugstore.com. The report even found that some prices with the cards were comparable to the prices offered to Medicare beneficiaries without the cards.
Bush Decides To Force Seniors To Enter The Program
As it gets closer to the election, Bush knows he needs to get this show on the road. So due to his dire need of funnels, he apparently has decided to try and force low-income seniors into the program.
On Sepember 23, 2004, HHS Secretary Tommy Thompson announced that federal officials will mail Medicare prescription drug discount cards to about 1.8 million low-income seniors who already receive some government assistance with Medicare expenses, the New York Times reports.
The NYTs says beneficiaries who receive the cards will be assigned to one of the 17 companies that have agreed to issue drug discount cards to low-income beneficiaries.
I wonder which companies agreed to "help" these poor soles. Let's see now, for starters, how much is 1.8 million times $1,200? And then we have to divide that amount by 17. So how much money can each company count on from the get-go?
Another funny story is that card providers initially planned to charge seniors $30 for a card as part of the scam. How much is 7 million times $30? That money's lost. They tried to make mega bucks off our elderly from every angle. Too bad their house of cards is collapsing (no pun intended). When I think about it, this is just too funny.
Besides, there is still another little problem with trying to force low-income seniors into the program. To receive the subsidy, seniors must call a toll-free number and confirm their eligibility by answering questions about existing prescription drug coverage and annual income levels, according to the New York Times.
I know that this may be incomprehensible to the profiteers in this scheme, but some seniors not only do not have phones, many can't even use one due to any number of health problems. I wonder if Bush will sit there himself waiting for calls from seniors?
In this instance, I love being the bearer of bad news. I don't think the Bush gang is going to get enough funnels signed up for the card program before Bush is hit with an eviction notice at the White House on November 2.
Industry Was Drooling Over Long Term Profits
The primary groups that offer the cards are HMOs, pharmaceutical benefits managers (PBMs), insurance companies, and groups of insurers and drug companies combined.
According to a July 5, 2004 article in Business Week, players of every description are scrambling to get a foothold in the new business created when the prescription drug law was passed. "Insurance companies, drugstores, drugmakers, and distribution middlemen called pharmacy benefit managers (PBMs) have all jumped in."
Business Week points out that the focus is on 2006, when the card is due to expire. At that point, it will be replaced by the more lucrative drug insurance that Congress agreed to fund, which will pay a set proportion of seniors' drug costs. "The key is for card sponsors to position themselves for '06," says Vicki Gottlisch, a lawyer at the nonprofit Center for Medicare Advocacy.
Business Week, says companies are aiming at 2006 and beyond. It details how "First Health Services Corp ... runs six state programs that already provide discount drugs for low-income people. Because Congress agreed to pay for $600 in free drugs through the Medicare card for many of these same seniors, First Health is offering its card to more than 250,000 elderly in three of those states -- Michigan, New York, and Pennsylvania.
"The payoff: The Medicare law allows these low-income seniors to be automatically enrolled in a card -- and First Health has negotiated to sponsor it. That will help position First Health with these customers for 2006," says First Health CEO Teresa DiMarco.
When Kerry takes over the White House the industry won't have to worry about what will happen in 2006, because I suspect that one of his first moves in office will be to find a way to dismantle Bush's Medicare profiteering scheme.
What Are Lawmakers Doing To Help?
Currently, between 1 and 2 million Americans are breaking the law by using the Internet to buy drugs from Canadian pharmacies, and many more would like to. According to a poll done by the Kaiser Family Foundation and Harvard University School of Public Health, about 80% of Americans support importing drugs from Canada.
And who can blame them? In 2002, Americans paid 67% more than Canadians for prescription drugs and in 2004, it's estimated that US consumers will spend $210 billion.
John Kerry has said that under his health care proposal, "all Americans will be able to buy less expensive prescription drugs from countries like Canada."
Under pressure from voters, many governors and state officials are ignoring Bush's ban on importing drugs, and are creating websites that link consumers to Canadian pharmacies. For instance, New Hampshire has a link to Canadadrugs.com on its website, which is supported by its Republican Governor Craig Benson. The FDA has not moved to shut the sites down so far.
Minnesota Republican Gov Tim Pawlenty, also set up a state web site and explained, "We search the world market for the best deal for American consumers and I don't think we should carve out and make an exception for prescription drugs."
Illinois and Wisconsin recently launched "I-Saverk," the first state-sponsored program to help people buy cheaper drugs from both Europe and Canada. Some 24 other states are said to be considering legislation that would permit importation from other countries. Connecticut, West Virginia and Vermont have already enacted pro-importation laws.
However, I've always known that drug makers wouldn't sit back and allow this to go on for too long. They are already starting to cut shipments sent to Canada when the orders appear to exceed local needs.
When asked about this situation, Pawlenty said, "We'll have to look at other opportunities in the United Kingdom, Switzerland, Germany, and other countries we know are potential safe providers of prescription medicines. In the end they (U.S. drug makers ) can't suffocate the supply to the rest of the developed world."
I really like Gov Pawlenty's attitude (even if he is a Republican).
Peter Rost blames most of the problem on politics. "The objective does not appear to be to provide drugs, but to score political and public relations victories," he says. "We need comprehensive healthcare reform. Reimportation of drugs is a first step on the right way."
Along with importation, some lawmakers are trying to pass legislation that would allow the government to negotiate for lower prices like the Dept of Veteran's Affairs does. Rost believes a law should be enacted immediately.
He told Independent Media: "I'm very concerned about the fact that Medicare will not be allowed to negotiate drug prices. I think this is Un-American. This is the country in which we believe we have a God given right to clip coupons and get low grocery prices, haggle with car dealers and buy clothes only on sale," he noted.
"To forbid us from negotiating drug prices will raise taxes which is even more Un-American. And this is done to us by a Republican president! I'm shocked," he said.
For whatever its worth, I agree with Rost 100%.
Cut To The Chase - How Much Will Seniors Have To Pay In 2006?
In January 2006, Medicare Part D will offer seniors enrolled in a managed care program prescription drug coverage that will include premiums, co-payments, and a donut hole, or a gap in coverage between certain levels of drug expenses.
How much will seniors have to pay in 2006? To begin with, they will pay a premium of $35 a month ($420 a year), and for the first $250 in drug costs. For the next $2,000 in costs they will pay 25% and Medicare will cover the other 75%.
Once the drug costs reach $2,250, coverage will completely stop. Seniors then have to pay for the next $2,850 in drug expenses on their own (the doughnut hole). Coverage does not begin again until the total costs reach $5,100. Once drug expenses reach that level, Medicare will pay for 95% of the cost for the rest of the year.
Then in 2007, the process begins all over again, but with the likely possibility that both the deductible and the gap in coverage will increase, depending on how much the price of drugs go up. That is not good news because we all know how fast drug prices can rise in 12 months.
For example, Families USA did a study and found that, "Among the top 30 brand-name drugs, prices, on average, rose by 4.3 times the rate of inflation from January 2003 to January 2004," ("Sticker Shock" June, 2004)
In light of this report, I think we can safely assume that the rising drug prices will probably negate any savings that may result from the prescription drug bill in 2007.
I agree with Sen Kennedy, and I think as president, Kerry should follow his advice. "The Bush administration's drug discount card program has been a monumental failure," said Kennedy. "It's time to scrap and replace the administration's whole flawed Medicare bill with a program designed to meet the needs of seniors instead of designed to fatten the profits of drug companies and HMOs."
Seniors Will Give Bush The Boot
The group of voters with the highest prescription drug costs is made up of Americans over the age of 65. Seniors make up 13% of the population. This group also happens have the best record for voter participation. 72% of its members cast ballots in
Although its more than obvious that Bush is not the sharpest tool in the shed, one of his many minions should have forced him to at least consider these statistics before he tried to con the elderly. Mark my word, pay-backs are hell. On Nov 2, seniors are going to show up to vote in record numbers and cause Bush to lose the election.