To All Members:
"THE TIME HAS COME, THE WALRUS SAID, TO SPEAK OF MANY THINGS...OF SAILING SHIPS AND SEALING WAX, OF CABBAGES AND KINGS..." THE TIME HAS ALSO COME FOR ALL OF OUR MEMBERS (MEANING YOU) TO UNDERTAKE A PERSONAL EFFORT TO ENCOURAGE THE FEDERAL GOVERNMENT TO SUPPORT PRESCRIPTION DRUG IMPORTATION LEGISLATION!
Attached is a letter that should be read and forwarded to all of your former Pacific Bell associates and friends (who are not members of our Association). This issue is of critical importance to our future health benefits. In addition, the NRLN has undertaken a national effort to gain support for a pharmaceutical bill.
(Senate Bill 334 known as the "Pharmaceutical Market Access and Drug Safety Act" was recently introduced by Senator Byron Dorgan, D, S. Dakota, along with Senators Olympia Snowe, R, ME and John McCain, R, AZ, and Edward Kennedy, D, MA)
This bill, if approved by Congress, would allow U.S. licensed pharmacies, drug wholesalers and American consumers to import safe, FDA-approved prescription drugs from Canada, Europe and other countries at lower prices.
The NRLN strongly supports this initiative. Here's how you can take action on this issue:
1. Go to the NRLN website (nrln.org)
2. Type your zip code in the "write to Congress" box at the top of the home page.
3. You will then be directed to the NRLN "CapWiz" site that provides legislative information. Inside the "action alert" box, click on the S. 334 alert.
4. You will be directed to the "action alert." Please type in your zip code again in the "take action" box to the right.
5. You will be directed to a screen that provides sample letters for S.334, pre-addressed to your
Senators. You can "edit" the letters to fit your own personal situation.
The CapWiz system will automatically tell you whether your Senators are cosponsoring S.334. Depending on their status, the sample letter will either thank them for their CO-sponsorship or will request that the Senator become a cosponsor.
PLEASE DO IT NOW!
Sumner K. Emery, President
March 9, 2005
SBC Medical Benefits
On December 8, 2003 President Bush signed into law the Medicare Prescription Drug Improvement and Modernization Act of 2003, which makes prescription drug coverage available to retirees through Medicare beginning in 2006. The new prescription drug coverage (Part D) will be available to retirees eligible for Medicare Part A (coverage for outpatient care) as of 2006.
When the law becomes into effect in 2006, annual premiums for Medicare Part D have estimated to be $420, or $35 per month. The initial deductible is $250 per year. Once the deductible is met, Part D covers 75% of prescription costs until total prescription drug expenses for the year reach $2,250.
Then, the infamous “donut hole” will exist for prescription drug cost between $2,250 and $5,100. In other words, the retiree enrolled in Medicare Part D will have to cover the cost of all prescription drugs costing between $2,250 and $5,100. By the time a retiree’s drug expenses reach $5,100 the retiree will normally have incurred “out of pocket” expenditures of about $3,600.
Should the retiree’s total prescription drug cost exceed $5,100 in a single year, there will be catastrophic coverage to cover 95% of all costs over $5,100.
It is my understanding that as the plan is presently proposed, Medicare Part D will have a list of drugs that are covered by the plan. A retiree who fills a prescription for a drug that is not covered by the list of drugs under the Medicare Part D must pay the entire cost associated with purchasing the drug out of pocket, and that cost will not count toward either the deductible or the threshold for catastrophic coverage.
Retirees who become eligible for Medicare Part D on January 1, 2006 could begin enrolling in the prescription drug coverage starting November 15, 2005 and must enroll no later than May 15, 2006 to avoid penalties.
The United States Department of Health and Human Services issued proposed rules on August 3, 2004 that allows group health plans (like SBC health benefits) to do one of the following with regard to prescription drug coverage for retirees.
A. Maintain the status quo prescription drug coverage under the SBC Health Benefit Plan in lieu of Medicare Part D coverage, so long as the status quo is at least equivalent to what Medicare Part D will provide, and SBC can receive a 28% nontaxable subsidy reimbursement from Medicare for eligible annual gross prescription drug costs.
In order to receive the subsidy payments, the SBC health benefit plan will need to attest that the benefits provided are at least actuarially equivalent to Medicare Part D and SBC health benefits will need to follow certain procedures, as those outlined in the proposed rules released on August 3, 2004; or
SBC health benefits could forgo the subsidy, thus requiring post 1990 retirees who are Medicare eligible to enroll in Medicare Part D.
B. Based upon my understanding of the United States Department of Health and Human Services proposed rules, SBC health benefits must make a decision no later than September 30, 2005, as that is the presently established deadline for SBC to apply for the government subsidy.
We are now in receipt of a letter from SBC Health Benefits stating, since the corporation is "at least equivalent to what Medicare Part D will provide in its newly adopted proposed rules, SBC plans to accept the 28% non-taxable subsidy reimbursement from Medicare for eligible annual gross prescription drug costs."
Based upon this statement by SBC Health Benefits, retirees will not be forced into the Medicare Prescription Drug Plan! (We continue to monitor this issue.)
How does this ruling affect pre-divestiture retirees and those Pacific Bell/Nevada Bell retirees who retired prior to the merger with SBC?
In 1996 the U.S. West Corporation memorialized a guarantee of lifetime health care coverage for pre-1991 retirees, (Phelps v. U.S. West, Case Number 95-Z-2759, United States District Court for Colorado. The guarantee covers FDA-approved prescription drugs. (Qwest cannot modify or change this coverage for pre-1991 retirees, unless changes are made in the health care industry or a government mandate, prevents Qwest from carrying out the guarantee.
The thousands of retirees who make up the TelCo Retirees Association, Inc. have a vital stake in any decision SBC makes that will (2006) radically alter the prescription drug plans presently offered to its retirees. Since the U.S. Government has established a deadline of May 15, 2006 for the enrollment of eligible retirees, your advice and counsel on this issue, as well as the question of the pre-divestiture and pre-merger retirees, would be both appreciated and critically important to all Pacific Bell/Nevada Bell retirees.
Sincerely,
Sumner K. Emery, President
Cc: Mr. Michael Rodriguez, Vice President, Human Resources
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