Fixing the Medicare Part D Sellout
February 11, 2009 at 16:36:59
Fixing the Medicare Part D Sellout
- By Scot Kamins
©2009 SeasonedSpender.com
2006 saw the advent of what at first blush looked like a real blessing for Medicare recipients -- a subsidized prescription drug program. Members pay a monthly premium to the private companies administering the program for the government (unless you're extremely poor in which case costs can be waived or further subsidized) and, depending on which program you join (a choice of nearly 50 in my county -- it differs from county to county across the country), you get substantial discounts on prescriptions. There are deductibles, limits, and conditions; generally the more you pay, the more flexible is the plan and the more you get for your dough.
See the Government's prescription drug coverage main page. For another perspective, read the Wikipedia article on Medicare Part D.
How We Got Scammed
Ah, there's the rub -- how much you get for your dough. In this case, I'm talking about the money you actually end up paying for your prescriptions through the program, and the money you and every other American pays in unnecessary taxes shelled out to prescription drug companies. This windfall -- to the tune of BILLIONS of dollars a year in taxes and in the extra money you pay every time you get a prescription filled -- was created by a section of the Medicare law that specifically prohibits the government from negotiating drug prices on behalf of the private plans that administer Part D.
Here's the section (or read the entire section on Part D):
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Section 1860D-11 of the Social Security Act (42 U.S.C. 1395w-111) subsection i:
(i) Noninterference.—In order to promote competition under this part and in carrying out this part, the Secretary—
(1) may not interfere with the negotiations between drug manufacturers and pharmacies and PDP sponsors; and
(2) may not require a particular formulary or institute a price structure for the reimbursement of covered part D drugs. |
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Well, maybe NOT so weird when you consider how this negotiation ban got into the law in the first place: The law was essentially written by the prescription drug lobby. Click here to read the 60 Minutes report about the sleazy way the law was drafted and voted on at 3 o'clock in the morning. Also interesting to note is that the bill's main mover, Representative Billy Tauzin (R-La) left congress shortly after the bill became law to take a job as -- SURPRISE -- the president of Pharmaceutical Research and Manufacturers of America, the prescription drug industry's main lobbyist organization. (Click here to read an article about this amazing coincidence. You can't make this stuff up.)
Previous Attempts At Change
Attempts to change the law were filed in 2007 and 2008; the proposed modifications ended up in committee where they they just died for lack of action, or Republicans on the Senate floor refused to end debate on the issue and thus prevented it from being voted on. It wouldn't have made any difference anyway because President Bush would have vetoed the change. (See House OKs letting Medicare negotiate lower drug prices -- Bill faces rough road in Senate and threat of presidential veto and Senate Republicans Reject Cloture to Proceed to Medicare Drug Price Bill.)
Great Leaders Making Mighty Promises ...
President Obama was quite specific about wanting to change the law. The Obama/Biden election campaign site had this to say:
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Our seniors pay the highest prices in the world for brand-name drugs. To lower drug costs, Obama and Biden will allow the federal government to negotiate for lower drug prices for the Medicare program, just as it does to lower prices for our veterans. -- From change.gov, Seniors and Social Security Agenda
and
Allow Medicare to negotiate for cheaper drug prices. The 2003 Medicare Prescription Drug Improvement and Modernization Act bans the government from negotiating down the prices of prescription drugs, even though the Department of Veterans Affairs’ negotiation of prescription drug
prices with drug companies has garnered significant savings for taxpayers. Barack Obama and Joe
Biden will repeal the ban on direct negotiation with drug companies and use the resulting savings, which
could be as high as $30 billion,33 to further invest in improving health care coverage and quality. -- From barackobama.com, section on the Health Care Plan (a .pdf file) |
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Congressional democrats have long touted the idea. As recently as February 5 of this year, Senate Finance Committee Chairman Max Baucus (D. Montana) and Health Education and Labor Committee Chairman Edward Kennedy (D. Massachusetts) said this in a letter to the new president bemoaning the withdrawal of Tom Daschlel from his bid to be Health Care chief:
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We are writing to affirm our continuing commitment to enacting comprehensive health care reform this year, and to express our confidence that you will swiftly choose an exceptionally qualified and dedicated alternate nominee for secretary of health and human services to assist in our efforts... -- Reuters article reporting the letter
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Both senators strongly favor giving the government the ability to negotiate drug prices.
But will they actually do anything about it?
Holding Their Feet to the Fire -- A Call to Action
History has shown that members of Congress have short memories, especially as concerns promises they make on the campaign trail. ("Suppose you were an idiot, and suppose you were a member of Congress; but I repeat myself. -- Mark Twain) But they are extremely sensitive to direct contact from their constituency -- the folks who re-elect them (or DON'T re-elect them) and feed their campaign treasure chests.
If you believe as I do that the law needs to be changed to allow price negotiations, you need to speak up. You need to contact them and let you know how you feel. You pay these guys to represent you -- make them do it.
To contact your members of congress, click here to go to the online database Contacting the Congress. Just enter your 9-digit Zip code, then click Submit it -- you'll quickly see contact info for your senators and representative. You can send an e-mail or you can call.
Calling is best! You can call their local office or their Washington office. Long distance calls are cheap, and well worth the few cents it costs. It shows them that you're serious.You probably won't be able to speak directly with your congressperson/senator, but you will reach the proper office where you can leave a message.
Keep the call brief -- state your name, the issue you're calling about, and your four or five sentence opinion in the matter.This brevity makes it easy for the congressional staffer handling the call to note accurately your concerns. Here's what I said when I called (I actually wrote it in advance):
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Hi, My name is Scot Kamins. I'm calling from South East Pine Street in Portland. I wanted to let the senator know that I want him to work to repeal the part of Medicare Part D that prevents the government from negotiating drug prices. Can I count on you letting the senator know how I feel? |
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Do it now, while it's fresh in your mind.
You can be certain that the senator or congressperson will know about your call. If the staffer asks for your address or phone number, provide it -- it reinforces the idea that you expect action.
~ Take Action Now -- It's The Only Thing That Works ~
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Archives Fixing the Medicare Part D Sellout
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Senior Scams & How To Avoid Them
Funding Retirement - Part II: Social Security
Funding Retirement - Part I: IRAs
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Reverse Mortgages: Loans of Last Resort
Property Tax Relief
Basic Principles
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