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Medicare Drug Program News
AARP Starts Media Campaign Urging Lawmakers to Allow
Negotiations for Medicare Drugs
New bill also introduced to do away with late enrollment
penalty
March 26, 2007 – AARP, a giant broker of insurance
to senior citizens and other adults, was a strong supporter of the
original Medicare drug program but has now decided it needs a major
change. AARP is launching a media campaign aimed at getting lawmakers to
allow Medicare to negotiate drug prices with the pharmaceutical
companies, according to a report today by KaiserNetwork.org.
AARP Launches Ad Campaign
Urging Lawmakers to Allow Medicare Prescription Drug Price Negotiations
AARP is launching a
newspaper and radio advertisement campaign in 10 states and Washington,
D.C., urging the Senate to approve legislation (S
250) that would allow the federal government to negotiate
Medicare prescription drug prices with pharmaceutical companies,
USA Today reports.
A provision in the 2003 Medicare law specifically
bars the government from negotiating prices under the drug benefit. The
House in January
approved a bill (HR
4) similar to the Senate proposal.
AARP has selected certain states for the ads "in an
effort to influence senators whose votes could make a difference" -- in
most cases undecided Republicans -- USA Today reports.
Sen. Ron Wyden (D-Ore.), an author of the bill,
said he has the support of about 58 of the 60 senators needed to allow a
vote on the proposal.
A two-thirds majority ultimately would be needed to
override an expected presidential veto if the bill were approved. The
ads will "clash on the airwaves" with the
Pharmaceutical Research and
Manufacturers of America's advertising campaign in opposition
to the proposal.
AARP Director of Advocacy Management Fred Griesbach
said that "the drug companies are going absolutely crazy trying to stop
this from happening."
PhRMA Senior Vice President Ken Johnson said the
Medicare drug benefit can be improved, but not by allowing government
price negotiations.
The
Congressional Budget Office
has said that government price negotiations would have little effect on
drug prices in the absence of drug formularies, which are not included
in either the Senate or House bill (Wolf, USA Today, 3/26).
Enrollment Penalties
In other Medicare news, Reps. Jason Altmire (D-Pa.)
and Steve Kagen (D-Wis.) have proposed a bill (HR
1310) that would nullify the late-enrollment penalty for the
Medicare drug benefit (Sherman,
Pittsburgh Post-Gazette,
3/25).
Under the current rules, beneficiaries who were
eligible to enroll in the drug benefit last year but did not do so
before May 15, 2006, had to pay a penalty of a 1% premium increase for
each month of delayed enrollment. Because the next enrollment period
began Nov. 15, 2006, affected beneficiaries had to pay a minimum
late-enrollment penalty of 7% (Kaiser
Daily Health Policy Report, 5/15/06).
Going forward, people who are turning 65 must
enroll during the period starting three months before their birthday and
ending four months after their birthday. Altmire said he has spoken to
many individuals who "missed the deadline and are in the penalty phase."
Altmire said House Democratic leaders have promised to hold a vote on
the bill (Pittsburgh Post-Gazette, 3/25).
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