Medicare D(isaster): More Money…

Prior to Medicare D(isaster) taking effect, health insurance, health services and pharmaceutical companies contributed $96,370,907 to candidates w/71% going to Republicans.  The following individuals receieved varying amounts from the pharmaceutical industry.

[Billy] Tauzin got $274,500; Rep. Bill Thomas, R-Bakersfield, got more than $432,000; Sen. Orrin Hatch, R-Utah, took almost $427,000; Rep. Nancy Johnson, R-Conn., took $731,517; Sen. Max Baucus, D-Mont., received $271,649; and Sen. Charles Grassley, R-Iowa, took $296,429.

Bill Tauzin, R-La., now works for the drug industry’s top lobbying group, PhRMA.  Tom Scully is now the top healthcare lobbyist for law firm Alston & Bird.  Both reportedly negotiated their contracts while working on the so-called Medicare reform law from inside the US government, which appears to be a clear conflict of interest.

continued
The result of this behavior is that Medicare D(isaster) is unnecessarily confusing and favors the pharmeceutical industry, as opposed to the people that it was supposed to benefit.  The Center for Economic and Policy Research and the Institute for America’s Future issued a report detailing the exact costs of Republican corruption at about $80 billion per year, or $800 billion over the next 10 years.  

This $80 billion price-tag is based on two specific provisions where Republicans sold out seniors for their industry contributors. First, they created a confusing web of competing and inefficient private plans run by private insurers – who receive huge subsidies from the federal government – that beneficiaries must choose from, rather than a simple stand-alone benefit run by Medicare. The low overhead costs of a single administrating agency could save $4.8 billion annually.

    Second, they made it illegal for the federal government to negotiate the price of drugs with manufacturers, despite the fact every other industrialized nation negotiates these prices. When the government does negotiate lower prices for bulk drug purchases, as does the Veterans Administration, it saves more than 40 percent compared to the market cost. Applied to Medicare, this would save about $560 billion over the first eight years of the program. The cost of the disastrous Medicare plan is even greater when the subsidies given to insurance companies are factored in.

Apparently, Congress feels that it is more important to give corporate welfare to the rx industry, as the original Medicare system is being demolished, instead of reformed.  If the prohibition against negotiating for the best price was left out of the legislation, the insurance companies would also lose, as they would be unalble to compete w/Medicare when the government wasn’t prohibited from negotiating for the best price.

The insurance industry would almost certainly lose out if it was forced to compete with Medicare, which does not have massive marketing expenses, highly paid CEOs and shareholders who demand dividends.

    Similarly, the lower prices that Medicare could negotiate with the pharmaceutical industry would mean lower drug industry profits – an outcome that President Bush and the Republican Congress were not about to back.

The Medicare Guaranteed Prescription Drug Act, sponsored by Senators Edward Kennedy and Debbie Stabenow, would substantially reform Medicare D(isaster) as it

        *  Gives every Medicare beneficiary the choice of receiving their drug benefit through traditional Medicare, with a formulary that is not allowed to change from day to day or state to state.

        * Allows Medicare to negotiate the same good discounts on drug prices that the VA gets for veterans.

        * Establishes a consistent nationwide premium for Medicare drug coverage.

        * Reduces the annual deductible for drug coverage.

        * Increases the share of seniors’ drug costs that Medicare will pay.

        * Eliminates the so-called “doughnut hole” that will force seniors to bear the full costs of their drugs one a minimum is reached.

        * Provides true security against runaway costs by assuming the full costs of drug purchases once a maximum out of pocket spending limit is reached.

Many who are affected by this are angry and are not hesitating to voice their opinions about being taken by a sales pitch.  Fortunatley, there are some organizations that are willing to advocate for those who are unalbe to do so.  A partial list includes Americans United–a group that rose from the ashes of Americans United, Campaign for America’s Future is teaming up with Moveon.org, the Public Campaign Action Fund and USAction, to name a few.  

However, there is still an important point to consider:  Regardless of whatever else is going on in DC and other cites, the problems with Medicare D(isaster) MUST be kept front and center!!!

In Washington, there is a joke that the difference between Republicans and Democrats is that Republicans try to win elections. If the Democrats don’t make fixing the drug benefit a top election priority in 2006, then the joke is on them once again.