In December 2003, Bush signed the new Medicare Prescription Drug and Modernization Act into law. Many seniors expected it to provide much needed relief from escalating health care costs. That has not happened and it will not happen until we get Bush and his cronies in the health care industry out of the White House.
The new law was supposed to be a boost for Bush's reelection campaign. However, it is now being criticized by Democrats and Republicans alike, and by just about every senior citizen advocacy group in the country.
Bush tries to portray the law with its prescription drug benefit as a windfall for seniors; when in fact it is nothing but a scam that benefits insurance companies, drug makers and health care providers.
Largest Premium Increase In History Of Medicare
According to a September 4, 2004 article by the Associated Press, Medicare premiums for Part A, which covers doctor visits and other non-hospital expenses will rise by 17% in 2005. It will be the largest increase is the program's 40-year-history. Monthly payments will jump to $78.20, up from $66.60.
Mark McClellan, administrator for the federal Centers for Medicare and Medical Services, said the increase reflects rapidly rising health costs and last year's Medicare overhaul.
Well Bush and his allies in Congress can take full credit for the increase that resulted from the "overhaul" because they are the ones responsible for pushing through the health care industry's favored version of the bill that got seniors into this mess to begin with.
This latest rise should come as no surprise anyways. Medicare premiums have skyrocketed ever since Bush took office. They rose by 8.7% in 2003, and 13.5% in 2004.
In addition to the rise in premiums, the deductible for Medicare Part A will also rise to $912 in 2005, up from $876; and the deductible for Part B will rise to $110.
Bush chose an odd time to release this news. According to the NYTs, "In years past, the premium increases have been announced in October at the same time that cost-of-living increases to Social Security checks are announced. The twin announcements allow the elderly to calculate how much they will be receiving the following year."
I wonder why Bush didn't wait until October to make this announcement? Or better yet, why didn't he give senior citizens the good news during his convention speech while he was bragging about his efforts to help the elderly cope with increased medical costs?
True to form, Bush released the bad news in his usual manner, on a Friday afternoon, and this time with the added benefit of a holiday weekend and a news cycle dominated by stories about a hurricane. "This is a cynical attempt to bury bad news by leaking it out when you hope no one is watching," said Rep Pete Stark, D-Calif. "This administration has had four years to improve Medicare and instead have made it worse. Today's news reflects the reality, not rhetoric, of this administration's bad record on Medicare."
Robert Hayes, president of Medicare Rights Center, called the increase "a body blow to millions of older Americans living on fixed incomes," and said the increase will be especially painful because Social Security payments are expected to rise by less than 3%.
Every dime counts for people on fixed incomes. The median annual income for senior citizens aged 65 and older was only $23,048 in 2003, or less than $2,000 a month, according to an August 26, 2004 report by the US Census Bureau.
According to the Washington Post, when the new Medicare law is fully implemented in 2006, the typical retiree who purchases traditional Medicare coverage and the drug benefit will pay more than $115 in monthly premiums, a $110 annual deductible for outpatient care, and co-payments for physician visits and medications.
McClellan claims that most of the increase will cover the program's new prescription drug coverage and preventive services, including an initial physical exam and other tests. And Bush spokesman, Scott Stanzel said "President Bush has worked to increase health care access and affordability, including guaranteeing Medicare recipients prescription drugs."
Wait a minute here. If the money is going to pay for the new prescription drug benefit, how are seniors saving any money? Let me get this straight, seniors are supposed to get a discount on drugs, but now Bush says that Medicare will pay for the discount with a rise in their monthly premiums.
Will somebody please explain the new "prescription drug benefit" to me because just like with so many of Bush's helpful policies, I don't get it.
On Top Of Rising Prescription Drugs Prices
The 17% increase in premiums comes on top of the escalating cost of prescription drugs. Experts say the elderly cannot withstand such a large increase on top of rising drug costs.
According to President of Medicare Rights Center, Robert Hayes, "Older Americans already are staggering under the relentless increases in the cost of prescription drugs," he said. "More older Americans will face harsh choices in meeting basic human needs--health, food and housing."
The Kerry campaign is blasting Bush. "After doing nothing about the record increases in the cost of healthcare over the last four years, George Bush is presiding over a Medicare system that is socking seniors with the largest premium hike in the program's 40-year history," said spokesman Phil Singer.
In the Salt Lake Tribune, Darrell Butler, manager with Salt Lake County Aging Services, said "if it was a 5 to 8% rise, it wouldn't have surprised me as much," he said. "But 17% is overwhelming. What it will end up doing is force a lot more people into making tough decisions about whether to buy food or spend their money on prescription drugs.
"They'll take their medications every other day or cut them in half to try to make ends meet," Butler said. "This is terrible news."
Kerry spokesman Singer says, "When it comes to helping seniors, George Bush has proven that he's taking us in the wrong direction by giving billions to the drug industry while keeping seniors from accessing cheaper prescription drugs."
Astronomical Increases In Prescription Drug Prices
Seniors will not see cheaper prescription prices when the full bill goes into effect in 2006, because it does nothing to control the rising cost of drugs. In fact, according to Consumers Union, "most beneficiaries will face higher out-of-pocket costs for prescription drugs after full implementation, despite the benefit." (Consumers Union, 11/17/03)
In June 2004, the advocacy group, "Families USA" released the results of a study that tracked price changes for the top 30 brand name drugs prescribed to seniors, in a report called: "Sticker Shock: Rising Prescription Drug Prices For Seniors. The study concluded that, "Like used car buyers drawn by the promise of a rebate—only to find that the base price has risen dramatically—seniors purchasing a new drug discount card may succumb to “sticker shock.”
In determining the most frequently used drugs, the study used data from the Pennsylvania Pharmaceutical Assistance Contract for the Elderly (PACE) program, the largest prescription drug program for senior citizens in the country. Price histories were obtained from MDDB Select, a Medi-Span database.
Since 1999, Families has continuously monitored price increases of the 50 most popular drugs used by seniors. All of the 30 brand-name drugs selected for its Sticker Shock study were in the top 50. Its report provides a framework for determining whether the discounts cards make prescription drugs more affordable.
According to the report, between January 2001 and January 2004, the prices of the top 30 drugs increased by nearly 22%. On average, the cost of the drugs increased by 6.5%, while the overall rate of inflation, excluding energy, was only 1.5% for the same period.
Of these 30 drugs, 28 increased in price by 2 or more times the rate of inflation; 21 increased by three or more times the rate, and 14 increased in price by more than 5 times the rate of inflation.
With some drugs the rate of increase was even higher. For instance, the cost of Combivent, used to treat respiratory conditions, increased by 13.2 times the rate of inflation. Alphagan P, used to treat glaucoma, and Evista, an osteoporosis treatment, each increased by 10.3 times the rate. Diovan, used to treat high blood pressure, increased by 8.6 times the rate. Detrol LA, a treatment for overactive bladder, increased in price by 8.5 times the rate. Xalatan, used to treat glaucoma, increased in price by 6.8 times the rate.
The cost of the following 8 drugs went up by more than 5 times the rate of inflation: Lipitor, used to lower cholesterol; Plavix, used to prevent blood clots; Norvasc, used to treat high blood pressure; Celebrex, used for arthritis and joint pain; Protonix, used for gastric reflux; Cozaar, used for high blood pressure; and Celexa, used to treat depression.
Prices of the drugs also increased often. Fifteen of the 30 had more than one price increase in the 1 year period from January 2003 to January 2004. Two-thirds of the drugs increased in price more than 3 times. The price of Toprol XL increased 7 times, Combivent 6 times; and Celexa 5 times.
Bush claims that by using Medicare's new prescription discount cards, seniors would receive a discount of 10 to 25%. That's bull. The truth is that after combining the 22% increase in drug costs over the past 3 years with the steady rise in premiums (8.7% in 2003, 13.5% in 2004, and 17% in 2005), seniors will get a minus % discount.
0% Discount - Card Prices Verses Non-Card Prices
Because the new Medicare bill contains provisions that bar the importation of drugs from other countries and bans Medicare from negotiating lower prices like the Veteran's Administration does for vets, seniors who use a prescription drug discount card will save little, if any, money on the cost of drugs.
In April 2004, the minority staff of the House Government Reform Committee, released a study that compared prices available to seniors who would pay the $30 to buy a card, against prices available to seniors who did not.
The study used prices from 3 card providers, ExpressScripts, Advance (Advance is owned by Bush-buddy Halbert who was allowed to craft major portions of the bill), and Walgreens. Prices of these companies were similar to all others. The drugs used in the study represent a month's supply of the top 10 brand-name drugs used by seniors.
The study compared the card prices to (1) prices in Canada; (2) prices negotiated by the Department of Veterans Affairs; and (3) prices charged by internet outlets Drugstore.com and Costco.com.
The study found card prices much higher than prices in Canada. A month's supply of the 10 drugs in Canada cost $596, while prices were $972 with Walgreens, $1,046 with Advance, and $1,061 with Express. The average card price was 72% higher than in Canada.
The Committee found that the difference for some drugs exceeded 100%. For instance, Celebrex, costs $81.28 at Walgreens, but only $38.69 in Canada; Prevacid was $129.68 with Express, but only $56.54 in Canada.
The comparison to drugs purchased by the VA, also found card prices much higher. With the VA the10 drugs cost $587, while the average price with the cards was $1,026, more than 75% higher.
A month's supply of the drugs even costs less on internet sights Drugstore.com and Costco.com. While the average card price is $1,026, the drugs would only cost $959 at Drugstore.com. Specific drugs like Lipitor, show Walgreens at $67.44, and Drugstore.com at $62.99; Prevacid costs $129.68 with Express, but only $122.57 at Costco.com.
Prices for generic prices were also spiked. The Wall Street Journal found pharmacies buying generic drugs for a few cents and marking them up nearly 200%. For example, a 90-day supply of generic Prozac costs only $4, and is sold for $14.94 at Costco.com. Yet the Medicare website showed one card sponsor charging $84.15.
The cold hard truth is that senior citizens were conned into believing that Bush wanted to help them, when in reality the much touted prescription discount card program is nothing but a scam. Why do I say this? For starters, multiply the $30 price per card by Medicare's 43 million members and see how much it comes to.
Seniors Forced To Pick Up Tab For Advertising
Increased spending for advertising is driving up drug costs and seniors are being forced to pick up the tab. AARP has been tracking how much drug companies spend advertising the drugs most used by seniors. It found dramatic increases in the price of drugs being advertised, a fact that ARRP says, "begs the question of who’s picking up the tab."
For a quick answer to that question, check out how much advertising was done right before the card program went into effect in June. In the first 5 months of 2004, Bristol-Myers Squibb spent about $35 million advertising the blood thinner Plavix, and the price for Plavix rose by 7.9%. Bristol-Myers also spent about $7.2 million to advertise the cholesterol drug Pravachol; its price rose 7%. Merck spent $42 million to advertise Zocor, another cholesterol drug, and the price to wholesalers rose 25.8%.
The drug Nexium (used to treat heartburn), is a good example of how well advertising pays off. Last year the drugmaker AstraZeneca spent $411 million promoting it. In return, Nexium sales reached $3.3 billion, making it the 7th largest selling brand name drug in the US, according to the trade publication Pharmaceutical Executive. Democratic Rep Henry Waxman recently released a study that showed that in one month between May 3 and June 3, 2004, the price of Nexium increased by 13%.
Make no mistake, the elderly are paying the advertising bills for drugmakers.
WAKE-UP CALL
The Kerry campaign is blasting Bush. "After doing nothing about the record increases in the cost of healthcare over the last four years, George Bush is presiding over a Medicare system that is socking seniors with the largest premium hike in the program's 40-year history," said Kerry spokesman Singer.
Bloomberg.com says Medicare patients have already paid $720 million more in out of pocket expenses for premium and deductible increases this year than in 2003, according to the annual report by Medicare's trustees. Enough is enough!
Seniors need a Wake-Up call before they head to the polls on November 2, 2004. If Bush gets reelected they better prepare for more assaults on their retirement nest eggs. Look at what his cronies in the health care industry managed pull off even while Bush was facing reelection. Who knows what new scams they have planned for the next 4 years.
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