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New drug benefit legislation creates firestorm from critics

Charles Ramm, 82, Gautier, says the AARP will no longer have his dues to lobby with. He is resigning his membership in protest of the AARP`s support of the recently passed Medicare prescription drug bill.

“Hillary Clinton and the Democrats introduced a bill that would have reduced the profits of the drug industry and the insurance industry,” Ramm said. “It failed. The GOP brings in a bill, which increases the profits of the drug industry and the insurance industry, and it passes. Guess who loses? Anything that is going to increase the profits of the drug companies can`t be good for us.”

Ramm has concerns about the high cost of providing the coverage and believes the country is making a big mistake with so much deficit spending.

“You know where the money comes from,” Ramm said, who is retired from the U.S. Air Force and Ingalls Shipbuilding. “It comes from the taxpayers.”

Military retirees such as Ramm have been told by U.S. Sen. Bill Nelson of Florida that the military insurance program TriCare for Life won`t be affected.

“None of us seem to really trust the idea that we aren`t going to be affected by it because TriCare depends totally on Medicare,” Ramm said. “More and more over the years, I have come to distrust our government. They have lied to us about so many things.”

Changes coming — in 2006

The Medicare drug program that goes into effect in 2006 requires a monthly premium of $35 and starts with a $250 annual deductible, increasing to a $450 deductible by 2013. After the deductible is paid, coverage would pay 70% of their bills between $250 and $2,250.

Then there is a gap where no bills are paid until yearly drug bills reach $5,100. After that point, the insurance would pay about 95% of the cost.

The Congressional Budget Office projects that the deductible and coverage gap would increase 10% the first year, and 78% by the eighth year of the program, 2013. At that point seniors would have a $445 deductible and those with the largest drug bills would be responsible for about $5,000 in drug costs.

Walter Howell, AARP associate state director for Mississippi, has worked on advocating some type of prescription drug benefit for seniors for several years now. Although there has been some backlash against AARP for supporting the bill, Howell believes it will be beneficial overall — particularly here in Mississippi where there are large numbers of low-income elderly residents.

Howell said his office hasn`t received a single call from a member upset about AARP`s support of the legislation.

“I think the general situation is that people don`t understand the bill because of its complexities, and they have concerns about something they don`t understand,” Howell said. “As soon as the President signs the bill, the AARP will begin an education program.”

Howell said that many low-income elderly residents of Mississippi will qualify for low-income protections.

Mississippi has 213,000 Medicare beneficiaries who are enrolled in Medicaid or who have incomes up to 135% of poverty and assets of no more than $6,000 ($9,000 for couples). Howell said these are eligible for Medicare`s most generous low-income protections. which include:

• No premium, no deductible and no gap in coverage.

• $1 or $2 generic\$3-$5 brand co-payments.

• No cost sharing once out-of-pocket drug spending reaches $3,600.

• No cost sharing for beneficiaries living in nursing homes.

Howell said for 19,000 Medicare beneficiaries with incomes up to 150% of poverty and assets of no more than $10,000 per person or $20,000 for couples, there are no premiums or sliding scale premiums, a $50 deductible, no gap in coverage, 15% co-insurance and $2 generic and $5 brand, once out-of-pocket drug spending reaches $3,600.

According to the Center for Medicare and Medicaid Services, of the 480,000 Medicare beneficiaries in Mississippi, 104,000 currently lack any sort of prescription drug benefit at all.

Lott casts critical vote

U.S. Sen. Trent Lott (R-Miss.) of Pascagoula was a vocal opponent of the proposed prescription drug benefit, stating that he supported such a benefit for the most needy citizens, but didn`t think the country could afford to provide drug coverage to everyone over 65 in the country regardless of their ability to pay. Lott was in the limelight when he was the swing vote on the closure motion to allow the bill to be voted on.

Lott voted for the closure motion, but then broke ranks to vote primarily with Democrats opposing the bill.

Howell said he believes Democrats didn`t support the bill because AARP supported the issue and not them.

“We have told both parties we don`t support parties or candidates,” Howell said. “This is one issue very important to us. If we waited for a perfect bill, we would never get anything.”

Lee Youngblood, press secretary for Lott, said in addition to the lack of a means test for the benefit, the senator also opposed the bill because there are many companies around the country who have indicated they will drop their prescription drug coverage for retirees after the government starts offering a drug program.

“The end effect in 2006 is seniors could lose their prescription drug coverage that has been provided by their former employers,” Youngblood said. “That is an issue. The cost overall was a major issue as well. The Congressional Budget Office estimates an annual cost of $400 billion. Sen. Lott believes it is going to cost much, much more than that if considering Baby Boomers are coming into the system. He believes the cost will be about $1 trillion per year. He thinks it is going to be bad for the country in the long term.

“Sen. Lott`s concern is you will have some seniors who will lose drug coverage when this is supposed to be a bill that does the opposite. He is also concerned that this could be a precursor to more socialized medicine of the type that Hillary Clinton and Teddy Kennedy would love to have.”

However, there were some provisions of the bill that Lott favored including a discount drug card for seniors, improvements to medical savings accounts, and some assistance for rural hospitals in

Mississippi.

“In Mississippi, when you get outside of our cities, we depend on rural hospitals for a lot of the health care needs in the state,” Youngblood said. “Sen. Lott has worked hard to make sure those operations stay in business and are available to their population.”

Wait and see

The furor over the passage of the bill is largely over for now. It won`t be until 2006 that the nation actually sees the results of the legislation.

“We won`t get to see how bad it is until 2006,” Youngblood said. “It could become a bigger issue at that point. More and more people will realize that it was a really bad plan. There could have been some things done much better. Sen. Lott likes to pass legislation that will stand the test of time.”

Although the AARP supported the bill, it wasn`t happy that it didn`t include measures to hold down drug costs. AARP, which has 35 million members, proposed allowing importation of cheaper drugs from Canada and giving Medicare the authority to negotiate drug prices.

“This is a key issue we`ll be coming back to,” said AARP official David Certner.

The prescription drug bill was AARP`s biggest controversy since the 1980s. The organization estimates that about 10,000 to 15,000 members resigned in protest of the organization supporting the legislation.

The bill, which is expected to cover 40 million older and disabled Americans, is considered the biggest change in Medicare since it was created in 1965.

Contact MBJ contributing writer Becky Gillette at bgillette@bellsouth.net.

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