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Resolutions & Amendments

38th International Convention - San Francisco, CA (2008)

Fix the Medicare Part D Prescription Drug Program

Resolution No. 62
38th International Convention
Moscone West
July 28 - August 1, 2008
San Francisco, CA

AFSCME has been a long-time advocate of a prescription drug benefit in Medicare, recognizing that older Americans use prescription drugs more than any other age group and are often least able to afford high drug prices; and

Our union, nevertheless, opposed the Part D drug benefit in the Medicare Modernization Act (MMA) of 2003 because it had big gaps in coverage, barred Medicare from negotiating directly with drug companies for lower prices, and could be acquired only from private insurers rather than the Medicare program itself; and

The MMA’s drug benefit was enacted largely along party lines and with the strong support of President Bush, as a profit-making vehicle for drug and insurance companies, rather than an affordable, comprehensive benefit for seniors; and

Due to a lack of cost-containment measures, Part D’s out-of-pocket costs have gone up each year since 2006, when insurance companies began marketing the benefit to seniors; and

In 2006, Part D plans provided initial drug coverage with reasonable cost-sharing for the first $2,250 in annual drug costs, but required seniors to pay 100 percent of the next $2,850 before coverage resumed; and

This huge coverage gap, known as the “doughnut hole,” grew to $3,216 in 2008 and is projected to exceed $6,000 by 2016; and

Average cost-sharing for a 30-day supply of prescription drugs increased by 11 percent for preferred brands and 29 percent for non-preferred brands between 2006 and 2008; and

The Department of Veterans Affairs negotiates with drug companies on behalf of the nation’s veterans and pays the lowest drug prices in the U.S.--a median price 58% lower than Part D insurers--while Medicare is barred from doing the same on behalf of seniors and the disabled; and

More than 1,800 private insurance plans now offer Part D coverage--with a bewildering variety of co-pay schedules and drug formularies; and

More than 50 Part D plans compete for business in most geographic regions--confusing Medicare beneficiaries and making it extremely difficult for them to figure out which plan is best suited to their needs; and

Part D allows private drug plans to change their formularies at will, a practice that can result in people being locked into a plan that no longer covers the drugs they take.

That AFSCME support legislation to fix Part D--such as the Medicare Prescription Drug Savings and Choice Act--that would establish a new public plan option operated by traditional Medicare that would be more cost-effective and less confusing for beneficiaries than the current array of private plans and require Medicare to use the buying power of its 44 million beneficiaries to negotiate directly with the drug companies for lower prices; and

That the savings derived from these changes to Part D be used to close up the infamous “doughnut hole” so Medicare can finally provide affordable, comprehensive drug coverage to beneficiaries.
SUBMITTED BY: Danny Homan, President and Delegate
Kay Gill, Secretary Treasurer and Delegate
AFSCME Council 61