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Scamming Seniors and Keeping Millions Owed the Poor…is this the Magic of the Market?

What a day it has been for private insurers reaping the profits of the Medicare Privatization…oops, we mean…Modernization Act. A new GAO report released to the Senate Finance Committee today confirms what many had already suspected. The privatization of Medicare might be good for business but it’s not serving seniors' needs. CMS got an earful from Senators on the Senate Finance Committee today, including Chairman Max Baucus:
I don’t get the feeling that CMS is looking out for seniors. I don’t get that feeling at all. These are basically renegade plans…my personal view is more needs to be done.

The GAO reports that, not only are taxpayers overpaying private insurers (at 111%) to do what Medicare already does, it’s now clear that millions of dollars paid to insurers to cover Medicare’s poorest beneficiaries was never even offered to the people these funds were earmarked for. Medicare paid insurers $100 million last year to provide retroactive coverage for poor seniors who qualify as “dual-eligibles”. However, the GAO says more than 400,000 beneficiaries who qualify for this money weren’t told it exists until after CMS saw a draft copy of this GAO report just over a month ago. $100 million to insurers…$0 to seniors.

Acting CMS administrator, Leslie Norwalk, objects to the “overwhelmingly negative tone” of the GAO report. We’re not quite sure what the positive side of this news would be.

Now, to the scamming seniors part of today’s news. The New York Times has followed up on Robert Pear’s excellent article on marketing scams being perpetrated nationwide by agents sellingMedicare Advantage plans to seniors. Today’s editorial focuses on the abusive sales tactics being used to push these privatized plans on beneficiaries who don’t want to leave their Medicare plans. Only to find out, after the fact, their doctors or treatment might not be covered under the new MA plan.

At some point don’t we all have to ask…why is our government pushing a privatized Medicare system designed to profit private industry, cost taxpayers more than what already exists and inflicts harm on the same beneficiaries the program was originally designed to serve?

Should I take Social Security benefits early?

Ask Mary Jane. NCPSSM Contributor: Mary Jane Yarrington, Senior Policy Analyst

It seems like such a simple question but a quick Google search this morning gave me 17 million links with answers to this single question. It’s a complicated topic to deal with -- even for the experts.

Generally, I don’t suggest applying for Social Security early in order to maximize lifetime benefits because that is betting against your own longevity. For some, that might be the right course but all too often taking benefits early will cost retirees who live longer than “average”.

The Motley Fool just posted an interesting discussion on this topic. Although the reference, “Its (Social Security) payouts are not guaranteed” was certainly arbitrary. As current retirees can attest, 401K and pension payouts these days are also far from “guaranteed.” In fact, I would argue benefits backed by the US government are far more reliable and predictable than struggling pension plans and the volatile Stock Market. I also think the number of years used in this discussion was too short. The starting point of benefits is only half the equation. The ending point (life expectancy) is equally important.

“Average” life expectancy from age 65 is about 19 years for women and 17 for men. The question is, where will you fall on a longevity continuum that runs from 62 or 65 to 100+? Live longer than “average” and you are on the losing side of that bet.

Applying early also bets against the longevity of your surviving spouse if you are the major wage earner. A surviving spouse inherits (or retains) whichever of their two Social Security benefit checks is the greater amount. You retire early and your widow(er)’s benefit is capped regardless of the age at which he or she begins a survivor benefit.

Early benefits might not look like such a great idea to a 90 year old widow struggling to get by on reduced Social Security benefits and, at best, half of your pension -- a pension that likely has not been cost-of-living adjusted since the day you retired.

The Social Security Administration lets you check the “break even” point for your own benefit. My best advice is do your homework and be skeptical of anyone who tells you taking benefits early is always the best way to go.

Got a question? Link to my Ask Mary Jane form, submit your question and I’ll be glad to help.

National Committee Reaction to Social Security & Medicare Trustees Report

Barbara B. Kennelly, NCPSSM President/CEO says:

“The Medicare funding warning included in this year’s Trustees Report is just the latest of many ticking time bombs hidden in the pages of the Medicare Modernization Act of 2003. This warning is arbitrary and completely ignores the real challenge facing Medicare, which is the sky-rocketing cost of our nation’s healthcare system.

Arbitrary budget cuts, privatized healthcare plans and industry slush funds are just a few of the MMA provisions which significantly weaken Medicare’s financial outlook. The financing problems Medicare faces can not be solved by dismantling the program. Mandating cuts based on an unrealistic target will hurt beneficiaries and ultimately destroy this vital program.”

The projected dates for when the Social Security and Medicare trust funds will be exhausted have also been pushed back one year. Here is the link for the Social Security Trustees Report.

Part D Drug Prices Soar and So Do Drug Maker Profits

It's really been a good week for drug makers. Not so great for seniors facing high prescription drug bills. Consider this interestesting pair of stories today.

A new report by Families USA shows the prices for drugs in the Part D program are rising at four times the inflation rate. This mirrors earlier findings on what seniors enrolled in Part D are really facing.

Not so coincidentally, the Associated Press reports that first quarter profits for three top pharmaceutical companies showed double-digit jumps. One analyst, Steve Brozac with WBB Securities says, "The demographics lean toward the pharmaceutical industry, no doubt about it."

After this week's Senate negotiation vote it's clear Washington does too.

How Much Money Does It Take To Kill A Bill? Just Ask Pharma…

By Maria Freese, NCPSSM Policy Director

The failure of the Senate to take up S.3 today is another clear sign that the drug lobby still carries a lot of weight in Washington.

So great is their fear of the power of negotiations, drug companies and their allies pulled out all the stops to deep-six a bill that barely scratched the surface of improvements that need to be made to the Part D drug program. Tens of millions of dollars have been spent on advertising and lobbying to kill a bill that does nothing more than repeal the current prohibition against Medicare negotiating with drug companies to get the best price for seniors. Since the Secretary has already said he will not exercise negotiating authority even if it is given to him, one has to wonder exactly why the drug companies are so afraid that they wouldn’t even allow the bill to come up for debate.

A profit-making enterprise doesn’t spend that kind of money unless a lot more is at stake – billions of dollars that come from the pockets of every single senior who has signed up for a drug plan. Seniors understand what’s at stake in this debate. They cast their votes in November against the status-quo, business as usual, business comes first thinking that says industry profits are more important than what’s best for American citizens and taxpayers.

A vast majority of voters want negotiation…a majority of the Senate does too. Unfortunately today, millions of dollars spent by the drug industry seemed to matter more.

Want to know how your Senator voted? Here’s a link to the final vote count. But don't be surprised to see Majority Leader Harry Reid's vote listed as "No" He switched his vote at the end as a procedural move to allow possible future consideration of S.3. Something our 4 million members and supporters will be working hard to ensure happens.



   

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