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Plan D and our broken political system

March 26, 2006|By Barry Kissin

The Medicare Prescription Drug Act (Plan D) that went into effect on Jan. 1 tragically demonstrates how broken our political system is. In this blatant example of choosing power and profits over people, it is our senior citizens who are most directly victimized so that the already immensely profitable pharmaceutical companies and the private health-insurance companies can be further enriched. The cruel and unnecessary complexity of Plan D serves only to conceal how so much expense manages to deliver so little benefit.

Fact: Unlike other Medicare benefits, Part D is modeled on the country's dysfunctional commercial health insurance system. With Medicare Parts A and B, which cover hospital services and doctor visits, the government pays providers directly. Under Part D, the government pays billions to some 260 private insurers to administer the coverage.

Fact: Without the overhead of profits and executives' salaries and marketing campaigns, Medicare Parts A and B manage to spend 97 cents of every dollar of revenue on medical costs. If the real objective was to help seniors pay for prescription drugs, all Congress had to do was to expand Medicare's Plan B to cover prescription drugs.

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Fact: It is this Plan D legislation that explicitly bars Medicare from using its buying power to negotiate discount prices from drug manufacturers. Government buyers such as the Veterans Administration and state-federal Medicaid programs negotiate for discounts. Drug prices for the VA are on average 48 percent lower than under Plan D.

Fact: The Plan D legislation also explicitly bars importation of lower-cost prescription drugs from Canada, where, because of the existence of a national health-care system, drugs are up to 75 percent cheaper than in the U.S.

Fact: An analysis by Consumer Reports magazine calculates that the average out-of-pocket spending on prescription drugs by Medicare beneficiaries will actually go up under Plan D, taking into account increasing drug prices, premiums, deductibles and co-payments.

Fact: Up to the moment Congress enacted Plan D in November 2003, the Bush administration consistently maintained that Plan D would cost an estimated $395 billion over 10 years. Meanwhile, the chief actuary for the Center for Medicare and Medicaid Services, Richard Foster, estimated the cost of Plan D to be about $550 billion. This estimate was provided to the White House in the summer of 2003.

Fact: After Plan D was enacted, this chief actuary testified that he had been repeatedly threatened by his superior in the Bush administration with being fired if he revealed his estimates to any member of Congress.

Fact: The superior who threatened the chief actuary is named Thomas Scully. About one week after Plan D was signed into law by President Bush, Scully resigned his position as Center for Medicare administrator and went to work as a lobbyist for major health-care companies.

Fact: One congressman who played a leading role in drafting Plan D, Billy Tauzin of Louisiana, is now the president and CEO of Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry lobby, at a multi-million-dollar salary.

Fact: The pharmaceutical industry is among the heaviest spenders on Washington lobbying. In the year that Plan D was passed, it reported paying a record $91.4 million for 675 lobbyists, including 26 former members of Congress. In 2002, drugmakers contributed $20 million directly to the campaigns of favored members of Congress.

Fact: After Plan D was enacted, the Bush administration proceeded to hire National Media Inc. at taxpayers' expense to produce ads that rebut criticism of and promote Plan D. National Media Inc. is also the Bush-Cheney campaign's media firm as well as the primary media firm for the drug industry.

Fact: In February 2005, the White House released a budget report indicating that Plan D would cost more than $1.2 trillion in the coming decade! The same report warned that Medicare would pose a far more serious budgetary problem in the coming decade than Social Security.

Rep. Roscoe Bartlett voted for Plan D, just as he has supported so many other pieces of legislation deliberately crafted to reward campaign donors and lobbyists at great expense to the American people. This is purely government by the wealthy and for the wealthy.

Barry Kissin is a candidate for Congress from Maryland's 6th District.

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