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JUNE 30, 2003
A Drug Benefit Few Seniors Need Dear Moms and Dads and Grandmas and Grandpas of America: At the risk of offending you whom we love, we need to have an honest discussion about the proposed Medicare drug benefit. To get seniors' votes in the next election, Republicans and Democrats in Congress are about to pass a bill to help pay for drugs. We know you depend on pharmaceuticals for your health and comfort. We know they take a larger and larger share of your savings. We also know that the overwhelming majority of seniors can afford to pay for their own drugs without this new Medicare entitlement. This is one benefit most of you don't need -- whereas the money your children and grandchildren will pay in taxes to fund it is something they could really use in these tough times. So please call off AARP and your powerful lobbyists in Washington. Only you can stop the politicians. As you know, between two-thirds and three-quarters of seniors are already covered on drugs by existing Medigap insurance, Medicaid, Medicare choice, and public and corporate retirement plans. The downturn is making these plans more limited and expensive, but they do work. Let's face it: While seniors make up 12% of the population, they own over half the financial and real estate assets in the U.S. Most seniors can pay for insurance to cover drugs, and many could easily buy them directly. The problem lies with poor seniors who can do neither. For this small group, a limited, means-tested Medicare drug benefit solves the problem. There are two options: a drug discount card subsidized by the government, or cheaper drugs available directly through Medicare. Republicans and Democrats may disagree, but either would work. There is actually a serious drawback to the Medicare drug benefit bill: Nearly one-third of all people receiving Medicare also have employer-sponsored retirement plans covering drugs. If Washington picks up the drug bill, many companies will end their coverage or scale it back. Corporate retirement drug plans tend to be more generous than the one proposed by Congress, so many seniors stand to see their benefits decline. In fact, the big winners in the Medicare drug bill may not be you at all but the auto, steel, and airline companies that have large retired workforces with generous benefits. They could save up to $600 per retiree per year by having taxpayers (your kids and grandkids) cover drug costs for which these companies are now paying. That's great for Corporate America, but it's not exactly your intention, is it? We know seniors spend a lot of time worrying about their families. One gift they can afford to give them is to stop the Medicare drug benefit bill. Mom and Dad, Grandma and Grandpa, call Congress now.  Get BusinessWeek directly on your desktop with our RSS feeds.  Add BusinessWeek news to your Web site with our headline feed. Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video. To subscribe online to BusinessWeek magazine, please click here. Learn more, go to the BusinessWeekOnline home page  | | |
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