The Medicare Index

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The Medicare Index

By Sherrod Brown and Stephen Doyle, the New York Times

January 28, 2004

Last month, President Bush signed into law Republican-sponsored legislation that adds a prescription drug benefit to Medicare and invests billions of dollars in an effort to lure the elderly away from the government program and into private health insurance plans. Last week, in his State of the Union address, President Bush said the new measure "kept a basic commitment to our seniors." By approving the legislation, the president may have fulfilled a commitment or two, but not to the nation's elderly. Here are some key details omitted from President Bush's speech (with apologies to Harper's):

Estimated cost of the Medicare drug bill over 10 years: $400 billion

Estimated increase in drug industry profits: $139 billion

Additional payments from government to insurance industry to participate in Medicare: $14.2 billion

Members of the United States Senate: 100

Members of the House of Representatives: 435

Washington lobbyists who work for the drug industry: 675

Political contributions from the drug industry to Republicans (2002): $21.7 million (74 percent of total)

Political contributions from the drug industry to Democrats (2002): $7.6 million (26 percent of total)

Average elderly American's drug costs in 2002: $2,400

Portion of his drug costs covered by the new Medicare drug benefit: 45 percent

Average markup on United States drug prices relative to Canadian drug prices: 45 percent

Average profit margin of Fortune 500 firms (2002): 3.1 percent

Average profit margin of the top 10 drug companies (2002): 17 percent

Increase in elderly Americans' Social Security checks (2002): 2.6 percent

Average price increase in the 50 prescription drugs elderly Americans used most (2002): 6 percent

Retirees with health insurance before Medicare was signed into law: 50 percent

Retirees with health insurance today: 96 percent

Medicare administrative costs: 2 percent

Average administrative costs of H.M.O.'s: 15 percent

Compensation package, including stock options, for the chief executive of one Medicare H.M.O. in 2002: $529 million

Number of elderly Americans dropped by an H.M.O. (1999 to 2003): 2.4 million

Political contributions from the insurance industry to Republicans (2002): $25.9 million (69 percent of total)

Political contributions from the insurance industry to Democrats (2002): $11.7 million (31 percent of total)

Number of months after President Bush signed the Medicare bill that H.M.O.'s will receive more money from the government to participate in Medicare: 3

Number of months after President Bush signed the bill that elderly Americans will receive a drug benefit: 25

Sherrod Brown, a Democratic representative from Ohio, is the author of "Congress From the Inside."