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FOR IMMEDIATE RELEASE: February 8, 2006

SCHUMER: NEW DISCLOSURES IN MEDICARE DRUG PROGRAM REVEAL UPSTATE NY EPIC ENROLLEES NOT PROTECTED, REQUIRED DRUGS MAY BE UNAVAILABLE ON NEW PLANS

360,000 New Yorkers on EPIC, and 574,000 Dual Medicare/Medicaid Enrollees May Lose Benefits, Receive Inferior Drugs, Or Lose Coverage At Local Pharmacy

As New Reports Reveal Pharmaceutical Industry Making Out Like Bandits from Plan, Schumer To Grill CMS Administrator McClellan at Finance Hearing on Today, Advance Legislation To Address Gaping Holes Leaving New York’s Seniors Stranded

Schumer to Detail How Many New Yorkers Vulnerable In Each Region: 22,000 in the Capital Region; 25,000 in Central NY; 43,000 in Hudson Valley; 17,000 in North Country; 30,000 in Rochester/Finger Lakes; 23,000 in Southern Tier; 52,000 in Western NY

Across New York, 367,000 seniors enrolled in New York’s Elderly Pharmaceutical Insurance Coverage (EPIC), may lose protection from loopholes in the new Medicare prescription drug plan, U.S. Senator Charles E. Schumer revealed today. Schumer grilled the Center for Medicaid and Medicaid Services’ Administrator Mark McClellan and urged him to offer the same safeguards to EPIC that are currently given to other private plans. Schumer today also spotlighted how drug plans can change the lists of drugs they cover even after a patient has enrolled in a plan and has committed them to that plan for a year.

“The Federal government has not been straight with the American people, especially seniors,” Schumer said. “Seniors who thought they were getting a Cadillac of a prescription drug program are now finding out their insurance plan is a jalopy. We all have a special duty to protect New York’s seniors and turn this lemon of a program into lemonade.”

Schumer today released regional data detailing how many EPIC and dual-eligible seniors in each county are eligible for the Medicare benefit:
• There are 22,484 Capital Region seniors enrolled in New York’s well regarded EPIC program, 6,148 of whom will be transitioned to Medicare Part D. 22,646 Capital Region seniors eligible for both Medicare and Medicaid may lose access to certain drugs if emergency coverage is not extended.

• There are 24,813 Central New York seniors enrolled in New York’s well regarded EPIC program, 6,203 of whom will be transitioned to Medicare Part D. 21,044 Central New York seniors eligible for both Medicare and Medicaid may lose access to certain drugs if emergency coverage is not extended.

• There are 43,070 Hudson Valley seniors enrolled in New York’s well regarded EPIC program, 10,768 of whom will be transitioned to Medicare Part D. 45,424 Hudson Valley seniors eligible for both Medicare and Medicaid may lose access to certain drugs if emergency coverage is not extended.

• There are 17,391 North Country seniors enrolled in New York’s well regarded EPIC program, 4,348 of whom will be transitioned to Medicare Part D. 15,303 North Country seniors eligible for both Medicare and Medicaid may lose access to certain drugs if emergency coverage is not extended.

• There are 30,006 Rochester/Finger Lakes seniors enrolled in New York’s well regarded EPIC program, 7,502 of whom will be transitioned to Medicare Part D. 22,558 Rochester/Finger Lakes seniors eligible for both Medicare and Medicaid may lose access to certain drugs if emergency coverage is not extended.

• There are 22,832 Southern Tier seniors enrolled in New York’s well regarded EPIC program, 7,502 of whom will be transitioned to Medicare Part D. 17,507 Southern Tier seniors eligible for both Medicare and Medicaid may lose access to certain drugs if emergency coverage is not extended.

• There are 52,305 Western New York seniors enrolled in New York’s well regarded EPIC program, 7,502 of whom will be transitioned to Medicare Part D. 35,799 Western New York seniors eligible for both Medicare and Medicaid may lose access to certain drugs if emergency coverage is not extended.

Transitioning From EPIC to Medicare:
Some of the 367,000 New York seniors enrolled in EPIC will be forced to enroll in Medicare drug plans by July 1st. Governor Pataki’s 2006 budget proposal, released January 17th, would push about 91,000 low-income New York seniors from the EPIC program onto the Medicare drug program. EPIC provides prescription coverage for seniors who have too high of an income to qualify for Medicaid, but need help paying for costly prescription drugs. These 91,000 people are the members of EPIC who are eligible for a federal low-income subsidy if they enroll in a Medicare drug plan, which will make their drugs cheaper, but will also give them coverage that is inferior to EPIC.

The EPIC program is a simple, cost-sharing prescription drug plan that covers almost all medications for enrollees. Most pharmacies in New York accept EPIC, and EPIC seniors pay at most $20 for a medication. The Medicare drug plan, on the other hand, is extremely complex and difficult to navigate. With over 40 drug plan options in New York and each plan covering different drugs, many seniors have found choosing a Medicare drug plan unbearable. Additionally, the Medicare drug plan drastically differs from EPIC in that not all pharmacies accept the wide variety of Medicare drug plans, and co-pays vary from plan to plan.

The grave nature of the impending transition of EPIC seniors onto the Medicare drug plans by July 1st is amplified because of the Medicare drug plan’s remaining glitches. Many seniors still aren’t receiving the drugs they need, are trapped in inappropriate plans, or are paying far too much for their medications. Since the implementation of the Medicare drug plan, New York seniors “covered” by Medicare drug plans have faced dangerous gaps in drug coverage. Knowing the abundance of problems with the Medicare drug plan, EPIC seniors shouldn’t be forced from a simple plan that provides secure coverage to a complex plan that still has many glitches.

Today, Schumer announced he will:
• Introduce legislation to prevent the remaining 276,000 EPIC enrollees from being transitioned onto Medicare in the future. The Medicare program currently pays 28% federal subsidies to employers to ensure that companies will not push their retirees from employer-sponsored plans onto Medicare. EPIC should benefit from the same federal subsidies to give the State the incentive it needs to retain EPIC coverage for New York seniors.

• Call on New York State to put explicit protections in place for EPIC enrollees in any plan that will shift members of EPIC onto the Medicare drug plan. These protections should include the assurance that all EPIC enrollees can continue to stay on the same drugs they currently take, can continue to use the same pharmacies they use now, and should have a smooth transition that is not put into effect until the kinks in the Medicare program have been resolved.

Formularies
Under current law, Medicare prescription drug plans can change the drugs that they cover, through their formularies, at any time. The only stipulation to this provision is that the drug plans must give their enrollees a notice two months in advance of the change. However, most seniors enrolled in a Medicare drug plan are prohibited from changing plans except during an annual open enrollment period. This provision traps seniors in drug plans without a guarantee that the drugs that they need will be covered all year long. Even a senior who has conscientiously decided on a drug plan that covers all needed medications could lose coverage of drugs if the drug plan changes its formulary.

Today, Schumer, along with Senators Dianne Feinstein (D-CA), Susan Collins (R-ME), and others, introduced the Medicare Drug Formulary Protection Act of 2006, which prohibits Medicare prescription drug plans from making their formularies more restrictive unless beneficiaries have the option to change plans.

Medicare-Medicaid Dual Eligibles
The 570,000 New Yorkers eligible for both Medicare and Medicaid-eligible continue to struggle to obtain the medications they need through Medicare drug plans. Although Governor Pataki took emergency action to provide medication to New York’s vulnerable dual-eligibles through the state’s Medicaid program, this temporary coverage of duals will end March 8th. Dual-eligibles have been unable to consistently obtain drugs that they need, for a variety of reasons, and continue to leave pharmacies empty-handed. Duals have to jump through many hoops, such as appeals processes, to obtain both formulary and non-formulary drugs; have been charged inappropriate amounts for co-pays and deductibles; cannot find a plan that covers all of their drugs; and have been auto-enrolled in inappropriate plans.

Schumer, along with others, introduced the Requiring Emergency Pharmaceutical Access for Individual Relief Act (S.2183) which would immediately provide relief to low-income and disabled individuals that are experiencing gaps in drug coverage, through provisions including a requirement for plans to provide at least a 30 day supply of any needed drugs until an individual can switch to a plan that covers the drug.

While seniors continue to face countless problems attaining and paying for their prescription drugs, new reports reveal record profits in the pharmaceutical industry. Economist Dr. Stephen Schondelmayer at the University of Minnesota estimates that Medicare could pay drug prices 20-30% higher than Medicaid drug prices. This means the windfall for the drug industry – just from the nation’s 6.4 million dual eligibles-- could be $30 billion over the next ten years. According to pharmaceutical industry journal RPM Report, pharmaceutical manufacturers will earn an additional $2 billion in 2006 profits from supplying the same patients with the same drugs.

Click here to view report.

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