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Is Bush Abusing Seniors with Medicare Rx Benefit?

A liberal group's ad gets a couple facts right, but leaves out the good stuff.

January 9, 2004

Modified: January 9, 2004

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Summary

 

In its latest attack ad, the liberal group MoveOn.org shows a cowboy-booted figure physically tripping up elderly couples by jerking on a rug, while a narrator says President Bush “is pulling the rug out from under Medicare” and “sided with the drug companies who've given him huge contributions.” The ad accurately cites two features of the new prescription drug bill that critics cite as defects, but fails to mention that most seniors will be financially better off when the new law takes effect in 2006.

Analysis

 

This ad gets two details right but overall leaves a wrong impression.

What's Right

First, what it gets right. It says “the bill forbids Medicare from negotiating lower prescription drug prices,” which is true. Pharmaceutical companies pushed for that measure so they would not have to face downward pressure on their prices. The ad also says the bill “prevents getting lower priced prescriptions from Canada, ” which is also true. Drug prices are lower in Canada because the government there controls them.

What's Wrong

MoveOn.org ad

“Rug”

Announcer: Seniors who thought the Bush prescription drug bill would really help them are in for a big surprise.

Because instead of standing up for seniors, George Bush sided with the drug companies who've given him huge contributions.

So the bill forbids Medicare from negotiating lower prescription drug prices. Forbids it. And prevents getting lower priced prescriptions from Canada .

George Bush. He's pulling the rug out from under Medicare.

 

But as for “huge” political contributions, the fact is that the pharmaceutical industry doesn’t even rank among Bush’s top 30 supporters. According to the Center for Responsive Politics, Bush has received $891,383 so far from pharmaceutical and health products companies and their employees for his 2000 and 2004 campaigns combined. That’s a little over one-half of one percent of Bush’s total. The industry is a much bigger player on Capitol Hill, where it does give more to Republicans than the Democrats overall. The industry gave more than $29 million in the 2002 congressional election campaign, of which 74 percent went to Republicans.

What’s most misleading about this ad is that it omits any mention of the nearly $400 billion in benefits contained in the bill -- the largest expansion of the Medicare program since its inception in Lyndon Johnson’s administration.

Indeed, most seniors stand to gain a good deal financially from the measure. According to the nonpartisan Kaiser Family Foundation, the average drug bill for seniors is expected to be $3,160 in the year 2006, when the new drug benefit will go into effect. The new benefit will pay more than half of that, and even after deducting an estimated $35 per month in premiums to purchase the coverage, seniors with that average drug bill will be $1,080 ahead.

For those with very large drug bills the new benefit provides catastrophic coverage that pays 95% of all drug costs above $5,100. To see exactly how much the measure would be worth to a beneficiary with any given drug bill, the Kaiser Family Foundation has provided a nifty calculator here .

For low-income seniors the new measure is even more generous. Lower premiums, deductibles and co-pays apply for those with few assets and income below 150% of the official poverty level (or currently $18,180 for a married couple). For those with few assets and income below 135% of poverty (or currently $16,362 for a married couple) there will be no premiums or deductibles, and co-payments will be $2 for each generic prescription and $5 for brand-name drugs.

To be sure, the bill has been criticized by many as not being generous enough, and on other counts. For those with roughly $800 or less in drug costs the benefit won’t equal the costs of premiums, deductibles and co-payments, though seniors will still have the comfort of being protected should their drug costs unexpectedly rise. And an unknown number of low-income persons who now get prescription drug benefits through the state-federal Medicaid program may end up paying more when they are shifted to the new Medicare benefit.

But even so, to characterize the new benefit as a physical assault on senior citizens is not accurate.

(For those wishing to learn more about what the new benefit does and doesn’t do, there is a wealth of unbiased information available at the Kaiser Foundation website here .)

Sources

 

"Prescription Drug Coverage for Medicare Beneficiaries: A Summary of the Medicare Prescription Drug,Improvement, and Modernization Act of 2003" Henry J. Kaiser Family Foundation 10 Dec 2003.

Medicare Drug Benefit Calculator, Henry J. Kaiser Family Foundation website.

Center for Responsive Politics website:

  Top Industries donating to George W. Bush (all cycles)

  Pharmaceuticals/Health Products: Long-term Contribution Trends