IMPROVING THE MEDICARE PART D DRUG BENEFIT

WHEREAS, Medicare is the nation’s largest and most successful health insurance system serving the health needs of more than 40 million older and disabled beneficiaries; and

WHEREAS, Medicare, which has served as a safety net for millions of senior citizens and people with disabilities since its creation in 1965, should be strengthened by the addition of a comprehensive and uncomplicated national prescription drug benefit; and

WHEREAS, the 2003 Medicare law fails to provide universal, affordable, adequate and comprehensive prescription drug coverage and instead offers a confusing, complex and inconsistent benefit, as well as a massive subsidy to drug and insurance companies; and

WHEREAS, according to the U.S. Department of Health and Human Services, nearly 5 million of 16 million people without either Medicaid, military, Department of Veterans Affairs, state-provided or employer coverage had failed to voluntarily sign up for Medicare Part D coverage by this year’s May 15 deadline in spite of substantial penalties; and

WHEREAS, the law promotes privatization of Medicare by providing drug coverage through enrollment in expensive private insurance plans, giving even greater overpayments and special advantages to those private plans; and

WHEREAS, runaway healthcare and prescription drug costs are creating a
major crisis for this country’s healthcare consumers; and

WHEREAS, between 2003 and 2013, older Americans are projected to spend a total of $1.8 trillion on prescription drugs, with spending on drugs continuing to grow faster than any other personal health category; and

WHEREAS, the United States has the highest drug prices in the world and is the only industrialized country without some form of price controls on prescription
drugs; and

WHEREAS, drug company profits are among the highest of all major corporations; and

WHEREAS, the 2003 law expressly forbids creation of a national prescription drug program operated by Medicare, preventing the program from using the power of its more than 40 million participants to negotiate drug prices, and instead relies exclusively on private insurance companies and HMOs; and

WHEREAS, the nonpartisan Center for Economic and Policy Research projects Medicare would earn a surplus of $40 billion over the next seven years if the United States paid the same prices for drugs as countries such as Australia and Canada that negotiate directly with the pharmaceutical industry; and

WHEREAS, a 2005 congressional study of the 10 leading Part D drug plans found prescription drugs in these plans cost 80 percent more than drugs offered by programs such as the Department of Veterans Affairs, whose prices are negotiated by the federal government, and over 60 percent more than prescription drugs available to Canadian consumers; and

WHEREAS, the standard Medicare Part D drug plan would leave retirees with a potential out-of-pocket financial liability of nearly $3,000 in 2007, with the prospect
of ever-growing premiums and coverage gaps in future years; and

WHEREAS, older Americans, who make up 13 percent of the U.S. population, account for 42 percent of spending on prescription drugs; and

WHEREAS, the new federal subsidy for employers providing prescription drug coverage to retirees is inadequate, making it more and more likely that employers will reduce or eliminate their drug coverage for retirees; and

WHEREAS, employers continue to shift a growing portion of healthcare costs to employees and retirees in the form of higher premiums and co-payments:

RESOLVED, that the American Federation of Teachers, working with the AFL-CIO, the Alliance for Retired Americans and other like-minded groups, continue to fight t amend the 2003 Medicare law to make a voluntary prescription drug plan available and affordable for all who qualify; close the coverage gap in Part D plan drug costs (informally known as the doughnut hole); increase and equalize the subsidy for employers who provide retiree drug coverage; establish a national prescription drug plan operated by Medicare offering the same drugs to all beneficiaries; grant Medicare the right to negotiate prescription drug prices; permit Americans to re-import U.S.-made and licensed drugs safely from Canada, Europe and other advanced industrial nations; and end preferential subsidies for private plans competing with Medicare; and

RESOLVED, that the AFT continue to educate members of issues that affect access to affordable prescription drugs and provide information on how rising drug prices are driving up the costs of employer-sponsored healthcare plans for workers and retirees; and

RESOLVED, that the AFT reject any attempt to privatize Medicare and strongly support efforts to expand the prescription drug benefit under Medicare and make it available and affordable for every senior and disabled person.