Mainers divided on Medicare bill AARP support of measure questioned

Members of Maine’s congressional delegation are split along party lines on a controversial Medicare prescription benefit bill likely to be voted on and passed by the U.S. House and Senate, possibly as early as this weekend.

The bill’s endorsement by AARP, the powerful senior citizens lobby, has triggered allegations of conflict of interest and a letter of protest signed by more than 80 members of Congress, including Democratic Rep. Tom Allen of Maine.

Republican Sens. Olympia Snowe and Susan Collins released statements Friday indicating they will vote for the measure that would provide drug coverage for all U.S. senior citizens.

Snowe has served on the conference committee that has attempted to hammer out a Medicare reform package that could win broad support from both Republicans and Democrats.

Snowe acknowledged the difficult process of reconciling the “multiplicity of goals” represented in the bill, but indicated that despite flaws in the final version, “America’s seniors … have waited too long for prescription drug coverage.”

Snowe said the version before Congress “provides the best available opportunity to secure, for the first time, a legislative foothold that ensures a universal, comprehensive and permanent drug benefit while also maintaining the security and stability of the traditional Medicare program.”

Beginning next year, seniors would be able to purchase discount drug cards that the Bush administration estimates would yield savings of between 15 percent and 25 percent. The card program would expire in 2006, when beneficiaries would gain access to a prescription drug benefit for the first time.

The bill also encourages private insurance companies to establish new managed care plans for seniors, either in the form of preferred provider organizations or HMOs. While Medicare currently includes an option for private coverage, most beneficiaries currently receive their health care in the form of a standard, government-defined benefit that does not vary from one region of the country to another.

For the first time, the legislation would also require seniors with annual incomes over $80,000 to pay higher premiums under Medicare Part B, which covers services outside the hospital. Additionally, it would establish new tax-preferred health accounts, open to individuals with high-deductible insurance policies.

Sen. Collins said the bill provides a needed update of the Medicare program, including the drug benefit, a measure to speed the availability of low-cost generic drugs, increased payments to rural hospitals and physicians, and greater accessibility to services for homebound elderly and disabled Americans.

“I agree with many, including AARP, that this bill, while not perfect, is worth supporting,” Collins said. “It is a good first step and an opportunity we cannot allow to pass.”

Opposition to the bill has centered on its reliance on private insurance companies to provide the drug benefit, an income-based sliding scale of co-payments and premiums, and a built-in prohibition against the government negotiating lower prices with drug manufacturers. Many Democrats allege the legislation will increase profits to private insurers and the pharmaceuticals industry while effectively dismantling traditional Medicare.

Democratic Rep. Michael Michaud of Maine’s 2nd District said in a telephone interview Friday that he cannot support the bill.

“I’ve heard from many senior citizens all across Maine,” Michaud said. “They don’t support any kind of privatization of Medicare or any cut in benefits. This bill does both.”

Michaud said an estimated 14,000 retirees in Maine stand to lose employer-provided drug coverage in exchange for a pricier option offered by the plan. He’s also concerned that the bill contains language that cuts funding for cancer treatment and phases in reductions in Medicare payments to providers.

“This bill is over 1,000 pages long,” Michaud said. “The full copy was just released at 1:20 this morning.” Michaud expressed concern that Republican drafters of the bill were hoping to push the vote through before skeptics had a chance to read it thoroughly. “We definitely need to add a prescription benefit to Medicare,” Michaud said. “But this is not the way to go.”

Rep. Allen rejects the argument that the bill should be passed despite its flaws and amended later to improve it.

“If we pass this bill now, we will not be able to take corrective action for years,” he said. “Once we take a step in the wrong direction, it’s very hard to turn around and come back.” The bill under consideration, he claimed, will effectively drain the Medicare program of its resources by 2016, opening the door for a major reduction in the public program.

Allen said the political will to create a workable drug benefit will still be present next year because the Bush administration cannot afford to let the issue die in an election year. “We should pass a bill next year that’s worked out with the Democrats,” Allen said, pointing out that the present legislation was drafted almost exclusively by Republican legislators.

Allen said seniors will lose choice in physicians and hospitals, will be forced to pay high private insurance premiums, and will be subjected to a bewildering and ever-changing system of payments and benefits that many elders are ill-equipped to deal with. “I like to think I’ll be just as alert and capable when I’m 80 as I am now,” he said, “but I know it’s not true.”

AARP endorsed the Medicare bill last week, drawing criticism from legislators, consumer advocates, and its own membership. A letter dated Nov 19 and signed by 87 legislators, including Allen, accused AARP of endorsing “a proposal that we believe will cause irrevocable harm to our constituents and seniors across the nation.” Signing legislators who were members in the organization withdrew their memberships, and nonmembers vowed not to join.

A USA Today article published Friday described accusations that the organization has a conflict of interest because it collects millions of dollars in royalties and advertising fees from insurance companies. According to the story, “AARP’s annual reports show it has received about $608 million in insurance-related income over the four most recent years for which data are available. That’s 30 percent of its total income, roughly equal to what it collects in membership dues.”

AARP denies it has a conflict of interest and said the bill represents the best interest of its membership.

There are about 200,000 AARP members in Maine. Stephen Jennings, director of the Maine AARP office, said his office had received a number of calls from members upset with the organization’s endorsement. “People are under the impression that this privatizes Medicare or forces them to join HMOs,” said Jennings. “We think this is a good bill, a good beginning. It would be irresponsible to say it’s less than perfect and just walk away.”

The head of another senior citizen advocacy group disagrees. John Carr, director of the Maine Council for Senior Citizens, said he is “astonished” at AARP’s support for the Medicare bill. “We need a bill that lowers the price of drugs,” he said. “There’s no reason to take Medicare and turn it upside down.”