Drug Prescription Plan Might Not Save Seniors Much
By John Toscano

Democrats in the United States Senate seeking to write a drug prescription program for seniors as part of Medicare reform are finding there isn’t enough government funding to underwrite a plan that would meet the expectation of seniors who have been clamoring for government help with burdensome drug costs.

The small amount of money for the drug prescription plan is being blamed on President George W. Bush’s lavish $1.35 trillion, 10-year tax cut, which primarily benefits high-income persons and was funded out of the government’s former huge monetary surplus.

As a result of spending most of the surplus for tax relief for those in the high tax bracket, the prescription drug program has been allotted just $300 billion in the next 10 years--and some of that will have to be spent on Medicare changes as well.

Under the prescription drug plan to be funded with the $300 billion, a Medicare member who decides to enroll in the program would have to pay a $54-a-month premium, pay the first $250 of drug costs each year, then 50 percent of every prescription until $3,500 is met, and then 25 percent of each prescription until a total of $4,000 in out-of-pocket costs is reached. At this point the government would pay all drug costs for the rest of the year.

The program would be available to all 40 million members of Medicare, but about 27 million have some drug coverage, so about 13 million would probably consider it seriously.

The toughest critics of the proposal would like to see the monthly premium cut to $30 or $35 per month, but this would increase the other costs and possibly the overall out-of-pocket outlay. In either case, the cost for the member would be about the same. In either case, it would reduce the costs that most average seniors already incur for prescription drugs.

BUSH’S DISCOUNT PLAN: Meanwhile, Bush released his drug discount card plan to a generally lukewarm reception, mainly from Republicans and Democrats but the drug industry and pharmacists don’t like it either. Under the plan’s provisions, a senior could buy a discount card for $25 to get into the program. Projected discounts range from 10 to 40 percent. But there’s no assurance the pharmaceutical industry won’t raise prices or that drug stores won’t raise prices, thus reducing the value of the discount.

REPORT FROM BUSH’S SOCIAL SECURITY PANEL: Bush strongly favors allowing Social Security recipients to invest part of their weekly payments in stock and bonds. He has appointed a commission to look over the future of the nation’s retirement plan, and lo and behold, his appointed commission members agree--it’s a good idea, as the president said, to allow for personal investment accounts.

The problem facing the system is that starting in 2016, just 15 years away, many Baby Boomers will be reaching retirement age, and revenue from payroll taxes will for the first time in the program’s 66-year history be unable to cover full benefit payments. But the president’s opponents say the crisis point won’t arrive until 2038.

The next step for the president’s Social Security Commission is to draw up a detailed plan to implement its personal investment accounts idea. This will have a tough time getting through Congress.

GUIDE TO HEALTH CARE IN FOREIGN LANGUAGES: City Department for the Aging (DFTA) Commissioner Herbert Stupp announces that his agency has produced the brochure "A Complete Guide to Health Care Coverage for Older New Yorkers" in Korean, Chinese, Russian and Spanish. To receive a copy in any of these languages, call DFTA at (212) 442-1111 during business hours, or write to the agency at 2 Lafayette St., 7th Floor, New York, NY 10007.

PREDATORY LENDING COSTS $9.1B YEARLY: Practices by the mortgage industry known as predatory lending are costing consumers $9.1 billion a year, according to a report issued by the Coalition for Responsible Lending in Durham, North Carolina. The practices target seniors and low-income consumers.

Mortgage companies victimize mortgage seekers by charging for single-premium credit insurance up front and then charge interest on it by adding it to the mortgage. Another gimmick is to charge exorbitant mortgage fees.

The Assembly has passed a bill to control these practices and action is pending in the state Senate.