Thursday, November 29, 2007

New Report Finds Drug Plan Premiums Up Almost 25%

A new issue brief from the Center for Economic and Policy Research confirms the bad news that seniors who get their prescriptions under Part D already feared...their costs for drugs are skyrocketing.

According to "Changes in the Costs of Medicare Prescription Drug Plans, 2007-2008" , the average Part D premium will rise by 24.5 percent from 2007-08 meaning an average premium price of $293 per year, or $57.70 more than last year.

The report also finds that an average of 20% of the private plans offering doughnut hole coverage last year are dropping that coverage in 2008...leaving more seniors vulnerable to huge out-of-pocket costs. Combine all of this with increases in co-pays, ever-changing formularies, and pricing tiers and it’s easy to understand why seniors find the Part D morass so hard to navigate.

And without fundamental reforms to the prescription drug program, these problems will only get worse over time.

Wow...

What a difference a week makes! There has been more discussion and debate about this administration’s phony Social Security crisis in the past 9 days than we’ve seen since 2005.

Thank goodness.

We’ve been talking about it for years (although it felt more like a monologue sometimes than a dialogue) including most recently here, here and here. Dean Baker at the Center for Economic and Policy Research has also written many good pieces on the administration’s phony “entitlement crisis” propaganda.

Even so, the Washington Post continues its Social Security obsession. As we sat down to write another composite of this week’s debate we found this wonderful post at The Economist’s View which sums it all up wonderfully.

Tuesday, November 20, 2007

More of the Same

And in the same vein, Presidential candidate Fred Thompson has been winning praise from the media for “doing something” on Social Security. Doesn’t anyone care about what his plan actually does?

Here are some of the basics of Thompson’s Social Security proposal:

· Divert money out of Social Security and into private accounts.
· Make huge cuts in Social Security benefits.
· Increase the public debt by billions of dollars.
· Shift risk to individual retirees.

Thompson’s plan would even go beyond the President’s failed Social Security proposal by:

· Making larger reductions in Social Security benefits by completely indexing benefits to prices rather than using a combination of wages and prices
· Raise the Social Security retirement age for those with private accounts, effectively reducing their Social Security benefits further.
· Require workers, through an automatic but reversible wage reduction, to contribute 2 percent of their wages to a private investment account.

We’ve posted a full analysis of the Thompson plan on the National Committee’s website.

A Counterfeit Crisis

Finally, we’re no longer feeling like a voice in the wilderness.

It’s certainly not popular in Washington to buck the administration’s well publicized and financed “entitlement crisis” propaganda campaign. Over the years, the Bush administration has created a mythology of impending doom for Social Security that just doesn’t exist. Their script casts anyone who doesn’t buy their bull as gutless or afraid to make “tough choices”. Anyone who doesn’t pledge allegiance to this doomsday scenario is deemed a political coward. In this world of black hat villains and white hat heroes, only politicians willing to slash entitlements are tough enough to be sheriff.

However, over the past few weeks there have been growing signs of independent analysis and critical thinking by some in the mainstream media (certainly NOT the Washington Post or Tim Russert) and even some presidential candidates.

Here are links to some of the best conversations on the counterfeit “entitlement” crisis:















Thursday, November 15, 2007

Higher premiums, Growing Out of Pocket Costs & Doughnut Holes

It’s Medicare Open enrollment time again. A painful annual ritual for American seniors who, in order to receive prescription drug coverage under Medicare’s privatized Part D program, must wade through pounds of statistics, charts and cost analyses just to determine if their current plan will even serve their needs next year.

Why, is this so complicated? Welcome to the world of privatized Medicare where each year most of these private insurers switch their formularies (in other words, drop drugs), require generics and increase premiums and co-payments. 75% of seniors will face a premium increase this year if they don’t switch plans.

However, it truly could be hazardous to beneficiaries’ fiscal and physical health if they don't shop around rather than stick with their current plan out of loyalty, confusion or fear of the unknown.

According to the National Seniors Law Center, the premium for the least expensive plan in New York will go up 167%, 90% in Florida and 44% in Pennsylvania. More than 2.5 million low-income seniors must switch plans this year to avoid having to pay out-of-pocket costs for the first time.

A survey by the consulting firm, Avalere Health, reports that in many states Part D premiums are doubling for the second year in a row. The popular Humana PDP Standard Plan charged $6.44 a month in Maryland when it first marketed its plan to seniors, two years ago. Last year’s premium doubled to $13 and now the premium will more than double again to $27.20. More than 80% of Part D enrollees are in the top ten drug plans and all but two have raised their premiums. AARP’s Medicare RX Plan-Saver is the most popular plan and, according to Avalere’s research, will increase its premium an average of 65% in 2008.

But as the insurance industry knows very well, it’s human nature is to stick with what you know. So far, that has been true for Medicare beneficiaries even to their detriment. The increasingly daunting task of analyzing a myriad of private drug plans’ (52 drug-only plans nationwide in 2008) formularies, co-payment, and premium schedules each and every year is an absurd burden which benefits insurers not seniors.

It didn’t have to be this way. Seniors want and need a prescription drug benefit under Medicare which would provide stable and consistent coverage which manages costs with no gaps in coverage like the so-called “doughnut hole”. What they’ve gotten with this privatized program is an overly complicated process that puts insurers’ bottom lines ahead of seniors’ needs.

For more information on how to navigate the Part D enrollment maze here is a link to our Frequently Asked Questions guide.

You can also find out more about the privatization of Medicare and Part D on our website.

Monday, November 12, 2007

Political Gamesmanship Threatens SSA

by Maria Freese, NCPSSM Government Relations& Policy Director

Congress and the President are beginning the final stages of a high-stakes political game of poker as the year winds down. With no compromise in sight on funding levels for any of our government agencies, this is the first time in recent memory that a President has categorically refused to negotiate on the total amount of spending by the federal government. His Administration picked a top-line number and he’s sticking to it no matter what – a tactic the American public has become all too familiar with during the past 7 years.

Included in this game of chicken is funding essential to operate the Social Security Administration. SSA is one of the few agencies that raises money for its own operations. A small portion of every dollar of payroll taxes covers administrative costs.

But because SSA funding is mixed together with funds for other agencies such as National Institutes of Health, SSA must compete for a limited pot of money. The result is that since 2001, SSA has suffered a $1 billion cut from its budget requests, leaving it without enough money to replace employees as they leave. This despite the new responsibilities Congress and the President have placed on the Agency, including verifying eligibility for the low-income subsidies in the Medicare Part D prescription drug program – and at a time when the agency is facing the beginning of benefit claims by the baby boom generation.

The result? Offices around the country are closing, and Americans are facing increasingly long waiting times for everything from getting a question answered to having an application for disability payments reviewed. The disability issue is especially critical, as the average wait for a hearing now stretches 18 months.

Congress added $275 million to the President’s request for the Agency’s funding in the 2008 Labor-HHS Appropriations bill, for a total of $9.9 billion. This amount would help SSA tread water – it’s by no means enough to reverse the shortfalls of the past. But the President has threatened to veto this bill, and it’s not clear Congress will have the votes to override the veto. If Congress is forced to start cutting programs in order to meet the President’s demands, SSA funds are at risk just like any other agency’s – despite the program’s $190 billion surplus.

As the President pushes Congress into this game of political brinksmanship, we hope he will consider that more is at stake here than an arbitrary set of budget numbers. For seniors and the disabled who count on Social Security, their very survival may be at risk.

Friday, November 2, 2007

"Entitlement " Commission Hearing in Senate

Entitlement hysteria is in full view on Capitol Hill this week as the Senate Budget committee held its first hearing on legislation proposed to create yet another bipartisan commission. We’ve already expressed our position on this commission, see here and here . Unfortunately, this first hearing proceeded down exactly the path we’ve expressed concern about before.

During this hearing there was virtually no acknowledgement that the challenges facing Social Security and Medicare are very different. A one-size-fits-all discussion of "entitlements" ignores the unique challenges facing Medicare (a healthcare program) and Social Security (a retirement and social insurance program). Lumping these programs together in search of policy solutions makes no sense. There was also little discussion of national healthcare reform and its role in this debate, even though skyrocketing healthcare costs are what is jeopardizing Medicare’s solvency.
Curiously missing from the Budget Committee’s table of experts was CBO Director Peter Orszag who has said,

“We do a disservice by uniting the health care issue with the aging issue"

He has testified many times to other Congressional committees that the rising cost of healthcare represents a far more serious fiscal danger than aging baby boomers. Medicare, not Social Security, is what is driving up the costs of entitlements. Medicare costs are increasing so dramatically because of overall increases in the cost of health care, not because of our aging population.

Coincidentally two new studies also came out this week detailing just how critical the healthcare debate is for seniors and Americans of all ages. The Kaiser Family Foundation reports that between 1997 and 2003, median out-of-pocket health spending increased by 50% while individual income rose by just 15%. Insurance premiums where the largest chunk of that increase. The Commonwealth Fund surveyed patients in seven industrialized nations and found Americans spend double what people in the other countries do on health care, but have more trouble seeing doctors, are the victims of more errors and go without treatment more often.


Focusing so much attention on "entitlements" while glossing over underlying issues such as healthcare reform is a fatal flaw in this commission approach.