Dozens of angry senior citizens, protesting a prescription drug bill they say will undermine the entire Medicare program, were ejected from a House Ways and Means Committee hearing, June 17. Meanwhile, a few miles across town at the White House, President Bush was brushing off his tuxedo for the next day’s gala fundraiser where drug giant GlaxoSmithKline would make a quarter million dollar donation to his re-election campaign.

“Don’t privatize Medicare!” the activists from the Alliance for Retired Americans (ARA) chanted. They claim that prescription drug proposals in both houses of Congress move to privatize the popular 40-year-old program that provides health care to 41 million Americans.

Because benefits don’t kick in until 2006, passage of the bills would allow President Bush and the Republican Congress to coast through the 2004 election campaign before its defects are exposed, appearing to have fulfilled their promise of a Medicare prescription drug program, critics say.

The bills are a sham, opponents say. Besides opening the door to Medicare’s demise and putting seniors at the mercy of private insurers, they do nothing to slow down the skyrocketing cost of prescription drugs, are impossibly complex, and, perhaps most damning, offer no help at all to the majority of seniors.

Pedro Ramos and his wife Gloria are healthy, active seniors, but the bill for the prescription drugs that help keep them that way could make you sick. The Ramoses, who live in the Irondale neighborhood on Chicago’s southeast side, desperately want prescription drug coverage to be added to the Medicare they depend on. The $200 to $300 a month the couple together spends on drugs for common conditions like high blood pressure and cholesterol, as well as a back injury Mr. Ramos suffered at work years ago, eats up a big chunk of their modest income.

“I have to be really careful with the budget because of medicine and gas for heating,” said the retired switchman from the now-closed Wisconsin Steel Works. Under the Senate plan, they would have to pay nearly $500 a year each to a private insurance company, and fulfill a $275 deductible every year before becoming eligible for 50 percent of the cost of medicines up to $4,500. Beneficiaries get no coverage for expenditures between $4,500 and $5,950. After that, they are covered for 90 percent of their bills.

Sitting on the sofa in their sunny living room, the Ramoses did the math with this reporter and a pocket calculator. “Something’s wrong somewhere,” said Mrs. Ramos, disappointed to find out that they would still be shelling out the same $200 to $300 a month. “They won’t leave you nothing to live on,” her husband added, grimly. The Ramos family, like more than half of all Medicare recipients, would not benefit from buying into the proposed prescription drug program. Drug costs that are big enough to put a substantial dent in most retirees’ budgets aren’t big enough to qualify for any meaningful benefit.

The Ramoses say they like the way the Medicare system has worked for them. Critics warn that both the House and Senate drug bills abandon the single-payer style under which Medicare directly reimburses the medical provider. It introduces a third party – private insurance companies – which would receive government subsidies. Attacking Medicare head-on, the House bill would allow private HMOs to skim off the healthier recipients while raising the premiums for older and sicker patients who stay with the traditional plan.

Predicting that employers would be encouraged to drop existing retiree prescription drug coverage, the AFL-CIO calls the Senate plan a “sham proposal that puts benefits at risk” for the one in three Medicare beneficiaries who now have retiree prescription drug coverage sponsored by an employer. The Congressional Budget Office estimates that 37 percent of retired employees with employer-sponsored coverage would lose it under the bill.

ARA Executive Director Ed Coyle charges the White House and Republican leadership are rushing through “a very complicated bill because they don’t want public debate.” Neither bill, he says, addresses the underlying issue of cost containment. “Eighteen percent of the pharmaceutical companies’ income went to profit,” says Coyle, “more than the next nine Fortune 500 companies combined.” The drug industry is worried that a plan to make the drug benefit part of Medicare could lower its profits.

The GOP took in $30 million at its June 19 Washington fundraiser. Donations came from Pfizer, Bayer AG, Eli Lilly and Merck & Co. PhRMA, a drug industry trade group that is helping pay for a TV ad campaign promoting the Republican prescription drug plan, gave Bush an additional $250,000.

The ARA plans a rally in Washington, D.C., on June 25 to demand that Congress not privatize Medicare. The Ramoses, who have already traveled to Springfield, their state capital, to demand prescription drug relief, say this time they might be going to Washington.

Barbara Russum contributed to this story.
The author can be reached at rwood@pww.org

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