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Retirees fear drug coverage will suffer Susan Jaffe, Cleveland.com
In the month since Congress
agreed to add drug coverage to Medicare beginning in 2006, supporters of
the measure have tried to reassure retirees over 65 that their
employer-sponsored prescription plans won't be replaced by less-generous
Medicare coverage. Private and public employers
can get an incentive - about $87 billion - to maintain coverage for their
retired workers, Sen. George Voinovich told representatives from seniors
organizations in “Some people say, 'I'm
worried about this. I'm only paying $12 for a generic and $18 for a
name-brand drug - what's going to happen to me?” he said after the
meeting. Voinovich, who voted for the
bill, added that he hopes a “generous subsidy” will persuade employers
to continue their retiree coverage. Employers across The federal government would
pay the employers 28 percent of the drug costs for a retiree in an
employer-sponsored plan, up to $1,330 per retiree in 2006, said Peter
Ashkenaz, a Medicare spokesman in But there's a catch: While the
employer must offer drug coverage that is equal to or better than
Medicare's, it could still accept the money and then cut benefits to match
what Medicare offers. AARP, the nation's largest
seniors group, bought full-page newspaper ads at the beginning of December
to explain its controversial support of the bill. The ads promised that
“the legislation provides incentives [both public and private] so that
people who already have good private coverage won't lose it.” Similar
assurances appear on the AARP Web site. However, AARP policy director
John Rother said the group never intended to tell seniors that the subsidy
would keep their employer-sponsored drug coverage intact. “There's no way to freeze
current benefits,” he said. The Congressional Budget Office
has estimated that 2.7 million retirees could lose their
employer-sponsored drug benefits when the new Medicare benefit kicks in. Unless retirees' drug coverage
is part of a union contract, it is a voluntary benefit that companies can
cancel entirely any time, said Gerry Smolka, a researcher in AARP's Public
Policy Institute. In the past decade, employer-sponsored health coverage
for retirees has declined dramatically. "We did our best to get
incentives to keep them volunteering," she said. But State Sen. Eric Fingerhut,
a Cleveland Democrat who is challenging Voinovich for the U.S. Senate,
said the incentive could backfire and instead encourage employers to
reduce their coverage to the Medicare level. Many local employers who still
offer their retirees drug coverage are now reviewing the Medicare offer,
including the Cleveland Clinic Health System, which has 2,066 retired
employees. Michael Domanick, in the However, thousands of Ford
Motor Co. retirees will not see any changes in drug coverage that was
negotiated with the United Auto Workers, said Anne Marie Gattari, a Ford
spokeswoman. The 160,000 retirees and
dependents covered by the Ohio Public Employees Retirement System also
need not worry. “We don't have any intention
of changing or eliminating the drug coverage because of the Medicare
prescription drug benefit,” said Dan Drake, PERS benefits director. In one alternative under
consideration, retirees would be transferred into the Medicare drug plan
and PERS would pay the drug costs not covered by Medicare. In that case,
PERS would not be eligible for the federal subsidy. Drake said if PERS chooses this
option and pays the costs Medicare doesn't, the system could save as much
as $50 million a year. PERS beneficiaries like Jack
Climaco, 70, would not notice a change. His wife, a breast-cancer
survivor, takes five prescription drugs. “We only
pay $10 for a three-month prescription, no matter what,” said Climaco,
who lives in Copyright © 2002
Global Action on Aging |
