Medicare change spells bad news

In late December, U.S. Rep. Timothy Bishop (D-NY) and PEF President Roger Benson told a standing-room-only crowd of 75 members of PEF Retirees Long Island Chapter in Hauppauge how the new federal Medicare Prescription Drug Law, which PEF and Bishop opposed, may affect them. 

“It’s a bad law and a bad deal,” Bishop said. “Instead of really helping Medicare recipients … (President George W. Bush and others who supported the legislation ) helped insurance companies and pharmaceutical companies. Corporate welfare’ is the phrase that comes to mind.”

The congressman described a provision in the new law that privatizes delivery of the new drug benefit, requiring it be provided by insurance companies and HMOs. 

“This is generally regarded as the most costly, least effective way to go,” Bishop said. 
Jane Bryant Quinn, a columnist for Newsweek magazine, made the same point in her December column: “Contrary to myth, private insurers add to the cost of Medicare.”

Quinn said the new law steers seniors into private plans, which “just hastens the day Medicare goes broke.”

Bishop said the new law also prohibits efforts to negotiate cost savings for drugs. 
Benson said the changes in Medicare may encourage the state and other employers to cut or eliminate their health benefits for retirees.

“Even before these changes to Medicare, the governor tried to cut your post-retirement health benefits last year,” Benson said. “That was one of his vetoes we (successfully) fought to override. And, if we have to do it again this year, we will. You can count on PEF to oppose attempts to reduce post-retirement health benefits in the Legislature, as well as at the bargaining table."