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Keeping Medicare Affordable by Reforming Prescription Drug Policy

WHEREAS:

            For nearly 50 years, Medicare has given older Americans and retirees access to modern medicine no matter their health status or individual income; and

WHEREAS:

            Medicare has helped generations of Americans avoid impoverishment due to costly illness, enabling them to keep a foothold in the middle class as they age; and

WHEREAS:

            Because seniors need and use medical services more than younger populations, Medicare beneficiaries spend three times more out-of-pocket on health care, despite the fact that the average senior’s income is less than $22,000 a year; and

WHEREAS:

            The obsessive focus on reducing the federal deficit has led a number of policy makers to target Medicare, proposing to shift even more health care costs onto Medicare beneficiaries; and

WHEREAS:

            The U.S. House of Representatives passed a fiscal year 2015 budget that would alter Medicare radically, burden beneficiaries with additional out-of-pocket costs, and make health care more unaffordable; and

WHEREAS:

            Medicare advocates oppose increasing costs for beneficiaries, but do support efforts to save money for Medicare and seniors by reducing the astronomically high price of prescription drugs; and

WHEREAS:

            Medicare Part D coverage for prescription drugs is estimated to cost $80 billion in 2014 and is expected to double by 2022; and


 

WHEREAS:

A significant amount of federal dollars spent on Part D is for overpayments to drug manufacturers, who are no longer required to extend Medicaid’s deep discounts to “dual-eligibles,” who qualify for both Medicare and Medicaid; and

WHEREAS:

            Ending this sweetheart deal for drug companies and restoring the discounts for dual-eligibles would save Medicare $117 billion over 10 years; and

WHEREAS:

            Current law forbids Medicare from using the purchasing power of nearly 50 million Medicare beneficiaries to negotiate directly with drug companies for lower prices, which could save Medicare more than $200 billion over 10 years; and

WHEREAS:

            Australia, Germany and New Zealand have successfully used a review process to reduce spending on expensive new drugs that are no more effective than existing treatments, while encouraging pharmaceutical companies to invest in innovative drugs that improve health outcomes; and

WHEREAS:

            Many brand-name pharmaceutical manufacturers pay off generic-drug companies to delay introducing a less expensive generic drug, which keeps brand-name prices artificially high for Medicare and its beneficiaries; and

WHEREAS:

            Authorizing the Federal Trade Commission to stop these anti-competitive, pay-for-delay agreements would save Medicare $9.1 billion over 10 years; and

WHEREAS:

            The Affordable Care Act (ACA) has helped nearly eight million people with Medicare save $10 billion on their medications due to the law’s required prescription drug discounts; and

WHEREAS:

            The ACA ends the coverage gap for Medicare prescription drugs–known as the “donut hole”–by 2021; and


 

WHEREAS:

            Increasing the drug-maker discounts required by the ACA would shorten the donut hole phase-out period to 2016, helping the sickest beneficiaries and saving $7.9 billion for Medicare over 10 years; and

WHEREAS:

            Medications are a critical part of health care and must be made more affordable.

THEREFORE BE IT RESOLVED:

            That AFSCME opposes legislation to shift additional costs onto Medicare beneficiaries and will advocate for savings in Medicare by reducing costs for prescription drugs, such as restoring discounts, reducing payments for new drugs that are not more effective than existing treatments and ending pay-for-delay agreements.

SUBMITTED BY:
Sonia Moseley, President and Delegate
Donna Knoch, Recording Secretary
UNAC/UHCP Retiree Chapter 1199U
California

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