News Release

* Bogus Benefits? * Medicare’s Death Spiral? * AARP Betrayal?


Shearer is senior health policy analyst for Consumers Union and author of the just-released report “Medicare Prescription Drugs: Conference Committee Agreement Asks Beneficiaries to Pay Too High a Price for Modest Benefit.” Among the report’s findings:

* “The funds set aside for this ‘benefit’ — $400 billion over 10 years — cover just 22 percent of the anticipated drug costs, leaving consumers to foot the rest of the bill.”

* “Medicare is being moved down the road to privatization by requiring competition between private health plans and Medicare….”

* “Private Pharmacy Benefit Managers get to pick what drugs are covered under the plan, with no transparency, methodology or public accountability. This means patients who are sensitive to the choice of drug will be out of luck if their needed drug is not on the plan….”

* The deal “actually prohibits the government from negotiating deep prescription drug discounts for consumers, meaning the average Medicare beneficiary will pay more out-of-pocket for drugs in 2007 when the benefit begins, than what they currently pay now without the ‘benefit.'”

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President of Physicians for a National Health Program, Dr. McCanne said today: “As a stand-alone component, the prescription drug benefit fails miserably on its alleged purpose: making drugs affordable for seniors. It provides a blank check for pharmaceutical firms to continue to gouge seniors, and introduces the Pharmacy Benefit Manager middlemen who profit by taking away our choices in drug access. Worse, the legislation provides financial incentives for the healthy and wealthy to exit the traditional Medicare program and enroll in private PPO plans. This concentrates high-cost, chronically ill patients in the traditional program, driving up program costs. When forced to compete with the private HMOs, which will be subsidized, the higher costs will be shifted to Medicare beneficiaries in the form of unaffordable premiums. This ‘death spiral’ of ever-higher Medicare premiums will force patients into the private plan marketplace. To keep premiums affordable, the plans will strip out benefits and require unaffordable cost sharing. Then Medicare will no longer ensure either health security or financial security for our seniors.”
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Hess has written extensively on issues relating to the elderly. He said today: “Once again, the AARP has stabbed America’s elderly in the back. For more than 30 years now, it’s been held up as a scarecrow — a monster representing 35 million greedy geezers…. Briefly, the AARP is not a league of the elderly, but a marketing agency with a shady past. It peddles insurance, travel, advertising, and anything else it can get its hands on. It has a mailing list — not a membership — of 35 million customers. If you turn 50, they’ll try to get your name on it. It calls itself an ‘association’ and goes through the motions in an effort to dodge taxes and commercial mailing rates, and it’s been in constant trouble with the IRS and the Postal Service.” Hess recalled that the AARP similarly “sold out seniors with the Social Security cuts of ’78 and ’83 and the catastrophic medical scam of ’88.” Hess, a former New York Times reporter, has written the just-published book My Times: A Memoir of Dissent.
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For more information, contact at the Institute for Public Accuracy:
Sam Husseini, (202) 347-0020; or David Zupan, (541) 484-9167