Medicare drug plan: Nothing but a scam

The new Medicare Drug Plan is proving to be a mess—as predicted by its critics. Touted by the Bush administration as a “great” deal for the 42 million seniors and disabled people who receive Medicare benefits, it is instead a bonanza for the health insurance and pharmaceutical giants but a nightmare for many of the poorest and sickest.

Medicare recipients and their families, plus pharmacists, doctors, city and state officials have raised a hue and cry against this disastrous plan. Mass anger is building. In fact, over half of eligible seniors say they won’t enroll in the plan at all.

The blame game has begun. State and local authorities who feel the heat and pressure don’t want to be blamed for this debacle. They are criticizing the federal government, the Republican leadership and particularly President George W. Bush for promoting and pushing this through. Faced with spiraling medical emergencies, governors in at least 24 states have been forced to implement emergency measures: their states are temporarily paying for prescriptions for low-income beneficiaries.

And now there’s buck-passing over who will repay the states. Medicare officials are refusing to do so and are telling the states to haggle it out with insurance companies. Angry lawmakers from both big parties are threatening legislation to require Medicare to reimburse the states.

President Bush during his last election campaign called this scam the “most significant advance in Medicare in 40 years” and promised it would help the elderly. Now he is on the hot seat. Trying to squirm out of it, he has thrown out a few crumbs. He told private Medicare drug-plan insurers they should pay for prescription refills for 30 days and not ask the poorest recipients for co-pays above $5.

This is just a stopgap measure; it will not fix the national health emergency created by Bush, his entire administration, Con gress and the big insurance and drug corporations.

The so-called Medicare Modernization Bill of 2003 was not really meant to help the 42 million Medicare recipients. Bush, the best friend the drug companies ever had, sold the public a bill of goods. He and his cronies in the Republican Party colluded with the insurance and drug industries to get it passed in Congress, which was all too willing to do so despite warnings and opposition from many quarters.

They got what they wanted: the creation of a largely government-funded program that puts money directly in the hands of private corporations, amounting to a $728 billion gold-mine for the insurance and pharmaceutical industries, and a giant step toward whittling down Medicare.

How it works

Under this scheme drug benefits are not administered by Medicare, the way it directly handles doctors’ visits and hospital stays—but through hundreds of plans held by private companies contracted by Medicare, which pays them to buy medicines. Each company has its own premiums, coverage and multi-tier co-payments, which can be raised with little notice.

In this way the drug corporations have acquired a new buyer for their products—the federal government. But built into this plan is a ban on the government negotiating prices with the drug companies. The health insurance companies, which are unnecessary middlemen in this operation, get mega-profits, too.

Because this is all about profits and not helping anyone, problems have been rampant since the plan went into effect on Jan. 1. Horror stories abound. This debacle has been a minefield for hundreds of thousands to navigate; many have lost out.

Among the hardest-hit have been the 6.4 million “dual eligibles”: those on Medicaid and Medicare. They are the poorest elderly as well as the physically and mentally disabled. Previously, they received free medications from state Medicaid programs. Since being arbitrarily switched to private plans, many are going without. Their lives may be at risk.

Many have been turned away by pharmacies because the plans they are in don’t cover their drugs or have expensive co-payments. Some of those formerly covered by Medicaid have been told they had to pay a $250 deductible, even though that should not apply to them. Tens of thousands have left drug stores empty-handed, without life-saving medicines, even cancer drugs. Medical and psychiatric hospitalizations have increased as people have gotten sicker without crucial medications.

Predicting this, the Medicare Rights Center had gone to federal court in 2005 to protect “dual eligibles,” but was turned down flat. The court said it had no power to order further drug benefits for Medicaid recipients. The lower-income elderly and the disabled should deal with this individually—an impossible task.

Other non-Medicaid low-income Medi care recipients were duped, too. Though Bush guaranteed they would get drug subsidies, the government has approved the applications of only 1 million out of up to 6.6 million people.

This system was devised as a deliberate scheme to transfer more money from Medicare—which is funded by taxes from working people and beneficiaries’ payments—to the health insurance and pharmaceutical industries, i.e., to siphon off more money from the people and get it into the coffers of big business.

Boston University professors Alan Sager and Deborah Socolar in 2003 calculated that 61 percent of the Medicare money spent on medications would wind up as profits for the drug corporations.

Excited over the profit potential in the Medicare Drug Plan, Wall Street went wild. Pharmaceutical stocks soared when it passed. Drug companies then callously raised prices of popular medications before it went into effect. (PBS, April 30, 2004)

The U.S. pharmaceutical industry charges the highest prices in the world. In 2004, the top 15 U.S. drug companies took in $273 billion in revenues, but their hunger for super-profits never ends.

It is no surprise, then, that the pharmaceutical industry has spent a scandalous $800 million over the last seven years on lobbying and campaign contributions. In that period, only the insurance industry spent more on buying favor among lawmakers. Their success has translated into billions more in drug profits. (Center for Public Integrity)

In 2003, the year Medicare Part D passed, the drug lobby spent $116 million, mainly aimed at Congress.

In fact, columnist Paul Krugman reveals that the Medicare drug bill was authored by two politicians who are now health industry lobbyists: Thomas Scully, who Bush named to run Medicare, and Rep. Billy Tauzin, the bill’s “point man on Capitol Hill,” who, having left Congress after the bill passed, now heads up the Pharmaceutical Research and Manu facturers of America. (New York Times, Jan. 20)

The drug industry also gave millions of dollars to the election campaigns of senators and congresspeople, both Repub licans and Democrats, including Sen. John Kerry. Bush, however, received the most—over $1 million—in the last election period.

No wonder the Medicare Drug Plan passed in Congress relatively unopposed.

Seniors are now discovering that “stand-alone” insurance plans provide NO coverage for drug expenses between $2,250 and $5,100 a year—the so-called “doughnut hole.” Before getting “catastrophic coverage,” the sickest must pay $3,600 out of pocket for medications—on top of a monthly premium and a $250 deductible.

Seniors and the disabled can use up their life savings and be bankrupted by drug expenses, if, in fact, they can afford the coverage to begin with.

The American Association of Retired Persons cannot be let off the hook for this fiasco. The AARP, which is supposed to advocate for its 35 million elderly members, went all out to get the Medicare Drug Plan enacted in Congress. It spent millions of dollars on advertising and public appeals, using its magazine and bulletin to promote it.

Like the proverbial fox guarding the chicken coop, the AARP is now raking in millions of dollars selling health and other insurance to its members.

Dr. David Himelstein of Harvard Medical School and Physicians for a National Health Program was outraged when AARP came out for Medicare “reform.” He said it had “shamefully agreed to sell out its members in exchange for the organization’s financial gain.” (Boston Globe, Dec. 8, 2003)

Instead of fighting the plan, the latest AARP bulletin warns its members that purchases of cheaper drugs in Canada won’t count for out-of-pocket costs here towards “catastrophic coverage” and that it is illegal to import drugs from Canada.

What seniors need is an organization that strongly defends their rights and benefits.

Quality health care must be viewed as a right, free and accessible to all—like the library system.

For this to happen, the profits must be taken out of ALL health care. This latest catastrophe points out the crying need for socialized medicine—the only way the masses of people can have quality, humane, accessible and available health care, including life-saving medications. It’s possible. In Cuba everyone has free quality health care, from the cradle to the grave. Why not here?