Lie or not, president bush's health care plan is a fucking joke...and so is Kerry's. Bush may say he is looking out for seniors but all he is really doing is protecting the profits of the big pharmaceutical companies and insuring increased profits for the insurance companies...
On December 8, 2003 Bush signed into law the Medicare Act of 2003, calling it "the greatest advance in health care coverage for America's seniors since the founding of Medicare." Promising prescription drug coverage, "better choices," and better access to diagnostic medicine, Bush concluded " Our nation has the best health care system in the world. And we want our seniors to share in the benefits of that system.... And today, by reforming and modernizing this vital program, we are honoring the commitments of Medicare to all our seniors."
... [T]he report is a Trojan Horse that looks like reform and looks like a benefit, but actually contains many provisions that threaten one of the most successful programs in our history.
The bill attempts to privatize Medicare, and at the same time, provides a poor benefit that is actually worse than the original House bill that we both opposed.
It contains an unreasonable deductible, makes no effort at lowering drug costs, has no guaranteed minimum drug benefit, and contains a huge doughnut hole that leaves many seniors without coverage.
Provisions|Problems
Level of funding: The bill is underfunded. The designated $400 billion over 10 years covers only 22 percent of the anticipated drug costs, leaving consumers to foot the rest of the bill.
Covered drugs: Private Pharmacy Benefit Managers (PBMs) can pick what drugs are covered under the plan, with no public accountability requirement. Under the new law they are allowed to cover as few as two drugs in each "therapeutic class." Medicaid recipients who need a drug that is not covered by their private plan will lose coverage unless they file an appeal and are granted an exception. This process will not be a viable alternative for many elderly with disabilities or cognitive impairments. Moreover, the new law prohibits physicians from filing appeals on behalf of their patients -- a departure from current medical practice.
Competition: The bill requires competition between private health plans and Medicare in up to six metro areas but does not require the private plans to demonstrate cost savings that result from efficiency. Instead, the proposal provides additional subsidies to these private plans and allows them to benefit financially by choosing to enroll the healthiest members.
The idea of introducing more competition into Medicare through the expanded use of private plans has been presented as a "reform" that would help limit rising Medicare costs. But the legislation actually increases Medicare costs by overpaying private plans in order to induce more beneficiaries to enroll in them. The legislation's supporters allowed their belief in the goal of privatizing more of Medicare to eliminate the stated goal of using "competition" to limit the rate of growth in Medicare costs.
Prohibition on negotiating prices for drugs: The bill prohibits the government from negotiating deep prescription drug discounts for consumers, which means that the average Medicare participant will pay more out-of-pocket for drugs in 2007 when the benefit begins, then they currently pay now without the so-called "benefit." Assuming current trends in increasing drug costs, the average Medicare recipient in 2003 who spends $2,318 a year for drugs without prescription drug coverage will pay $2,911 out-of-pocket in four years under the plan.
Prescription drug coverage:
-Starting in 2006, 75% of drug costs are covered up to a limit of $2,200 per year.
-From $2,200 until the participant has spend $3,600 out-of-pocket there is no benefit.
-After that, Medicare pays 95% of prescription drug expenses.
-Premiums for prescription drug coverage average $35/month with an average $275 deductible.
-For 2004 and 2005 a discount card will be made available which will reduce drug costs by approximately 15%. During this period an additional $600 subsidy is available for low-income seniors.
Private plans will likely be able to offer drug coverage in the coverage hole and lower beneficiary cost-sharing (as well as extra benefits in other areas) because of the billions in federal subsidies they will receive under the bill. The legislation thus tilts the playing field in favor of the private managed care plans. Beneficiaries who would otherwise want to remain in traditional Medicare so they can retain their choice of doctors are likely to switch to managed care plans in order receive the broader drug coverage. The nonpartisan Congressional Budget Office estimates that 2.7 million retired people will lose employer-sponsored drug coverage because of the Medicare benefit.
Demonstration projects for premium support: The bill creates so-called demonstration projects in six urban areas in which federal funds will be used to reduce premiums on private insurance for seniors as an alternative to Medicare. The premium support concept was developed in the 90s by Henry Aaron of the Brookings Institution and Bob Reischauer of the Urban Institute. Aaron and Reischauer warn that unless the it is regulated, premium support could lead to private insurance companies enrolling only healthier seniors, while the less healthy members of the population remain in traditional Medicare. Over time that could result in increased premiums for beneficiaries in the traditional Medicare program. The regulatory safeguards that Aaron and Reischauer recommend are not part of the current legislation.
Health savings accounts: The bill establishes accounts to which tax-deductible deposits can be made, and from which tax-free withdrawals can be made as long as the funds are used for medical expenses. This is the first time that tax-advantaged savings have offered a tax break when funds are both deposited and withdrawn. If political pressure leads to this kind of tax treatment being applied to other types of savings and retirement accounts it could produce even greater increases in federal deficits.
The health savings accounts could also undermine comprehensive health insurance if large numbers of healthy, affluent opt out of employer-based coverage in favor of the new programs. Studies by the RAND Institute and the American Academy of Actuaries referenced by the CBPP suggest that premiums for employer-based coverage could double.
Effect on those covered by Medicare and Medicaid Currently in most states, low-income people who qualify for Medicaid received prescription drugs free, or pay $1 or $2 per month per prescription. Under the new law, Medicaid recipients under the poverty line will pay $3 per month per brand name prescription, and $1 per month per generic prescription. Those above the poverty line will pay $5 and $2and the charges will increase at the same rate that drug costs rise, which, according to the CBO is at last 10% per year. Unfortunately, individuals in this category generally live on fixed incomes, such as Social Security payments, which are adjusted for inflation -- currently 2 or 3 percent a year. So over time prescriptions drugs may become unaffordable for people slightly above the poverty line who require a large number of prescriptions.
Cost containment The new law requires the executive branch of the federal government to estimate the portion of Medicare costs that will be financed with general revenues (e.g. income taxes as contrasted to payroll taxes). When that portion exceeds 45%, the President is required to submit legislation to modify Medicare programs to bring the share funded by general revenues back to 45%.
Medicare costs for hospital care are funded from payroll taxes, not general revenue. Outpatient services and prescription drug Medicare costs are funded from general revenue. Advances in medical care are enabling shorter hospital stays, which tends to increase costs of outpatient care and prescription drugs. So ironically, advances in medical science may lead over time to drastic cuts in Medicare, as the share of costs funded from general revenue continues to increase. Cuts may include lower provider reimbursement rates, reductions in benefits, or higher premiums and other forms of cost-sharing.
This provision gives preferential treatment to income tax, as contrasted to payroll tax, which in turn favors higher income people. (In general if you earn more your income tax rate increases, while payroll taxes take a larger percentage of the income of low-income people than high-income people.)
Effect on states The House version of the bill would have assumed responsibility from the states for drug coverage to low-income beneficiaries. The final legislation contains no such provision, and leaves the states responsible for 75% of the drug costs for low-income elderly and disabled people that they would have carried under Medicaid. Without relief such as that contained in the House bill states are likely to make deep cuts in Medicaid as drug costs increase and baby boomers retire. The legislation compounds the problem by imposing new costs on the states, such as the costs of determining eligibility for the new Medicare low-income drug subsidies.
