New Medicare Law and How
It Defrauds the Elderly


Medicare Prescription Drug Improvement and Modernization Act of 2003

Drug cards may trigger headaches

Medicare system will be complex
By Judith Graham
Tribune staff reporter

March 8, 2004

As the government prepares to roll out a vast new Medicare drug plan in June, consumer groups are warning that the program is so complicated that it promises to confuse many of the vulnerable older people who need it the most.

Seniors may also find that the first products available under the program--Medicare drug discount cards--fail to deliver the savings on prescriptions they are hoping for, consumer advocates and health care analysts caution.

Although the Medicare cards are intended to offer discounts of 10 percent to 25 percent, nobody knows what the savings will actually be. That's because private companies issuing the cards--insurance firms, HMOs and others--will be able to raise or lower discounts on a weekly basis.

Although the companies can make changes, seniors won't have that privilege: Once they sign up, they'll be required to stick with a single Medicare card for a full year.

"There are real questions about whether older people will get the discounts they are expecting," said Gail Shearer, director of health policy analysis for Consumers Union.

Government officials are hoping the card-issuing companies won't change benefits frequently, but they cannot rule out the possibility.

"I suspect it may [happen] but I hope not often," said Leslie Norwalk, acting director of the Center for Medicare & Medicaid Services, who is the lead official overseeing the prescription drug program. Competition between companies issuing the cards should serve as a deterrent, she said.

Beryl Clemens, 72, who lives in Chicago's Lincoln Park neighborhood, doesn't like the uncertainties associated with the new Medicare program.

"I don't think [these cards] are going to do most people any good," said Clemens, who belongs to Illinois' Circuit Breaker pharmaceutical assistance program.

Already, fraudulent marketing activities preying on seniors have begun. In some parts of the country, including Alabama, Georgia, Idaho, Nebraska, New York and Rhode Island, unscrupulous salespeople have been peddling unauthorized Medicare cards, according to government officials.


BERNARD KERIK SHILLS FOR THE DRUG INDUSTRY: In April, the Washington Post reported that Kerik opened a high-priced consulting firm to sell his New York City police credentials to wealthy corporate bidders. The firm was promptly hired by the pharmaceutical industry's chief lobbying group to build opposition to letting American seniors purchase lower-priced, FDA-approved medicines from Canada. Without any evidence, Kerik claimed reimportation could "invite terrorists to launch a biological attack under the guise of a legal purchase."


According U.S. Congressman Max Sandlin, the new Medicare cards are, in fact, cards, but not Medicare.

“This is just one of the many, many shamefully misleading pieces of information associated with this national disgrace,” declared Rep. Sandlin on a recent tour of East Texas. “The entire thing is nothing short of a sham, and as a member of the United States Congress I am absolutely ashamed of what is called the ‘Medicare card’ and the legislation that was passed bringing it into being.”


Bush ally's firm vies for Medicare cards

By Wayne Washington and Susan Milligan, Globe Staff, 12/12/2003

WASHINGTON -- A Texas company owned by a campaign contributor and former business associate of President Bush could profit if Medicare endorses its drug card program under guidelines set by legislation the president signed into law on Monday, according to a report released yesterday by a research group run by a former Clinton administration official.

The Center for American Progress, whose president is John Podesta, Clinton's former chief of staff, pointed out that David Halbert, a longtime friend and contributor to several of Bush's campaigns, helped craft the portion of the Medicare bill that allows seniors to buy discount drug cards they can use to purchase medicine from May of 2004 until 2006, when prescription drugs will begin to be covered by Medicare.

Halbert's company, Irving, Texas-based AdvancePCS, is one of the nation's largest pharmacy benefit management companies and would be well-positioned to compete for Medicare's endorsement to issue the discount cards.

Medicare officials will decide in April which companies can issue the discount cards. By then, AdvancePCS could be owned by Caremark Rx, which in September announced its intention to buy the company. That sale could be approved by the Federal Trade Commission in January. The Fort Worth Star-Telegram has reported that the sale could net Halbert as much as $200 million.

"The White House is supposed to be the people's house, not the drug industry's corporate headquarters," said David Sirota, author of the Progress Report, which conducted the AdvancePCS review for the Center on American Progress. "The president needs to explain why he allowed his longtime Texas crony and benefactor to help write key pieces of Medicare legislation that guarantees nothing for seniors but billions for his friend's business."

Bush had been an investor in a Halbert-owned predecessor company to AdvancePCS, called Advance Paradigm, the center reported. Bush's trust sold his shares in 1998. Halbert contributed to Bush campaigns from his 1994 gubernatorial race through his White House bid in 2000.

White House spokesman Trent Duffy said the administration consulted a wide range of experts in putting together the drug bill.

"I'm not going to be able to say anything about specific conversations the White House had in crafting this legislation," said Duffy, pointing out that no decision has been made on which companies will distribute the discount cards. "I will say the president designed this bill with 40 million special interests in mind -- the seniors of the United States of America."

Halbert could not be reached for comment, but AdvancePCS spokesman Dale Thomas said: "AdvancePCS is not going to dignify this with a response."

Democrats have been highly critical of the discount drug cards, complaining that they won't benefit seniors.

"Only in this administration would the words `discount card' mean seniors get the card while corporations get the discounts," said US Senator Edward M. Kennedy, Democrat of Massachusetts.

The drug discount card is meant as a stopgap measure to ease the burden of prescription drug costs for seniors until 2006. Senior citizens would pay a maximum of $30 a year for the card.

All Medicare recipients would be eligible for the card. However, the companies, called prescription benefit managers, would not be required to pass on all the saving that they might be able to negotiate from drug manufacturers. Instead, the law allows firms to pocket much of the discount themselves, passing a smaller amount on to consumers.

Phil Blando, a spokesman for the Pharmaceutical Care Management Association, said seniors were likely to get healthy discounts. An analysis in March by researchers at Brandeis University found that drug discount cards administered by pharmacy benefit management companies provide average discounts of 25 percent for generic drugs and 14 percent for brand-name prescriptions.

Blando called the report "ludicrous," and said many firms might not even compete for Medicare's endorsement to offer discount cards, since costs might exceed revenues from enrollment fees.

"This is a red herring, a diversionary tactic, but we're not going to be swayed by it," he said.
© Copyright 2003 Globe Newspaper Company.

Bush Takes
Seniors For a Ride:
Bush promised seniors that the new
drug discount card would save them
10 to 25% off the cost of all drugs.
Experts say the cards don't guarantee
seniors anything and may cost them more!

Articles on the New Medicare Law and How
It Defrauds the Elderly and How AARP
Helped it All Happen

Contempt for Congress:
Medicare Bill Fraud

The Washington Post in an historical
editorial exposes the Medicare fraud
and its cost to America's seniors.

Survey Finds Elderly
Nix New Medicare Law
A new
survey suggests that the number of
Medicare beneficiaries with negative
views of the new prescription drug law
far exceeds the number with positive views.

Medicare Premiums to Jump
a Record 17%
By Johanna Neuman
In the largest increase in the history of Medicare,
insurance premiums paid by elderly and disabled
patients for routine care will rise 17% next year,
the Bush administration said Friday.

Prescription Drugs
The Medicare Savings Mirage

Drug Cards Dissected
The potential for "Bait and Switch" is enormous.

GAO Rules Medicare Videos
Were Illegal

An investigative arm of Congress ruled that
Bush administration violated federal law by
producing and disseminating television news
segments that portray the new Medicare
law as a boon to the elderly.

The Medicare Bait and Switch:
Seniors Pay More While Pharmaceutical
and Insurance Company Profits Soar:
Outstanding analysis of the new
prescription drug deal
that threatens seniors.

Two More Reports Reveal
the tragedy of the new Medicare Law.
BU's Health Reform Program reveals 61
percent of Medicare's subsidy is windfall
profit to drug makers. Consumers Union
reveals seniors will have to pay too much
for too little in a program that gives more
to Drug companies than to elderly.

From BuzzFlash: Retired
says new Medicare law will
mean suffering and even death for our







<Back to Court Page>