By Nathan Mayberg
MONTICELLO February 3, 2004 Congressman Maurice Hinchey came to Monticello Friday, calling the new Medicare prescription bill "somewhat fraudulent" and harmful to Americans.
Speaking to a crowd of between 50 and 70 people, including the revived Senior Legislative Action Committee (SLAC), he said the bill would cost over $500 billion, and $100 million more than the Bush administration initially predicted.
Hinchey called the bill a gift to insurance companies and the pharmaceutical industry.
"If the money in the bill had been applied to a system under Medicare, the price would be more reasonable and less expensive, he said. The administrative costs of Medicare are 3 percent. Insurance administrative costs are 30 percent."
He estimated that it would cost the average senior citizen about $359 a month to participate in the new program.
The bill pays 75 percent of drug costs for seniors until their bills reach $2,250. Between $2,250 and $5,100 of drug costs, seniors will be required to pay the full amount out of their own pocket, said Hinchey. After $5,100, the government will pick up the 75 percent cost again. Insurance companies are explicitly prohibited from picking up the gap in costs, he added.
The congressman said he was perplexed on why the government insisted that seniors get stuck with such a high bill.
He also assailed the bill for doing nothing to lower the costs of prescription drugs.
"Drug costs increase at three to four times the rate of inflation," he said.
He pointed to countries like Mexico, Canada, and South Africa that pay for their drugs at one-fourth to half of what America pays. The reason, he said, is that they negotiate with the companies. This new legislation, restricts the American government from being able to negotiate with the drug companies on their prices.
Hinchey added, with great derision, "The geniuses that have devised this plan have subsidized them [insurance companies]. Private insurance companies will be overpaid by 25 percent per person."
"Insurance companies are getting paid out of the Medicare Trust Fund to provide care at a higher cost. If this makes sense, Im crazy.
"As drug spending goes up, health insurance premiums go up," he added. "This legislation was written in large extent by insurance companies and drug companies. They spent a lot of money lobbying."
Hinchey referenced research that estimated drug company profits will rise by $13 billion as a result of the new bill.
The legislation bans drugs from being imported from Canada or elsewhere, unless Secretary of Health and Human Services Tommy Thompson "deems it safe and less costly.
He hasnt done that," said Hinchey.
Hinchey also denounced the bill for penalizing seniors who dont switch from HMOs to the new plan immediately. Seniors who wait three years to sign up for the plan could have their costs rise 36 percent, said Hinchey.
Hinchey said he believed that the "intention of this program is to starve Medicare. . . . If this thing is allowed to stand, then Medicare is on its last legs."
Hinchey said that the Republicans who wrote this bill "cant stand the idea that we are providing health care to people. . . . They have been after Medicare for a long time."
As part of this legislation, he added, once 45 percent of Medicare costs are taken out of the trust fund, there will be caps put into place.
"We will reach that by the end of the decade," warned Hinchey.
Companies are increasingly pulling away from health care benefits, said the Congressman. He quoted Congressional Budget Office statistics which estimate "2.5 million retirees will lose current health coverage by employers dropping coverage that they have worked for all their lives."
Hinchey was also upset that the new bill gives "$70 billion to corporations to help pay for health care benefits, but it does not require them to use that money on health-care benefits."
The bill does not go into effect until 2006. He said that Republicans intentionally wanted to wait until after the 2004 election.
Jo Campanaro, one of the leaders of the Senior Legislative Action Committee, wanted to know, "What can we do?"
Hinchey told the crowd to write to their representatives. He said he would be doing all he could to repeal the bill.
Marie Scott, treasurer of the committee, raised her voice and became emotional when speaking about the difficulties she has had with health care.
Scott, who lived through the Depression, remarked that as a child in the 1930s, "we saved and we pinched. . . . We have no faith in our legislators anymore. Were not going to be quiet anymore."
Hinchey responded, "That is the same attitude we all have got to have."
He went on to fault the Bush Administration for creating a $500 billion deficit, blasting the president for making $2 trillion in tax cuts, of which "most go to 5 percent of the country."
When somebody in the crowd asked what the deficit was before Bush came to office, Hinchey responded, "We used to have a $400 billion surplus before Bush."