Saturday, August 12, 2006

Kudos to Kostyu: first place national award (Way to go, Paul!)

Kostyu receives national award
Canton Repository, August 12, 2006

COLUMBUS Paul E. Kostyu, Columbus Bureau chief for Copley Ohio Newspapers, won a first-place national award for in-depth reporting on environmental issues from the Association of Capitol Reporters and Editors.

He also won third-place in the single-report category for his story on the botched execution of Joseph Clark.

Kostyu won for daily newspapers of under 75,000 circulation. The award was announced at the group’s annual meeting last week.

A graduate of Heidelberg College with master’s and doctoral degrees from Bowling Green State University, Kostyu has also won a first-place investigative reporting award from the Associated Press Society of Ohio and was submitted as a Pulitzer Prize nominee for beat reporting.

The Capitol Reporters association awards recognize outstanding achievements in beat reporting, in-depth reporting, column writing, news analysis and commentary by print, radio and television journalists who cover state government.

Friday, August 11, 2006

Dave Speas on political appointees to STRS Board

From Dave Speas to Molly Janczyk, August 9, 2006
I have experienced the reality that sometimes the known is better than that which replaces them. I am most concerned about the billions that are needed to bring back the healthcare and the people who have the knowledge to protect it. I saw Dr. Brown make actuaries change their projections because of his knowledge. I did not always agree with him and I am sure he did not agree with me always, but he protected us from drastic mistakes made in projections by our hired actuaries.
Sometimes we have to put up with things we do not like to have the protections the experts can provide. The other eight board members can counter them and better because we may get appointees that follow the political opinions that healthcare should not be part of the retirement because of its drain on the investment returns.
I am always apprehensive when we get rid of the known for the unknown. John and Dennis were knowns, Dr. Buser was a known because he was one of us appointed to protect us from big mistakes and Dr. Brown was elected and had the knowledge to save us billions.
I am hopeful that the government leaders appoint people who are as honest and knowledgeable as these two gentlemen were. May God protect us from what could happen in these two appointees and the third if that should happen.
Dave Speas

Thursday, August 10, 2006

Kostyu re: Buser resignation

STRS pension board loses another member
By Paul E. Kostyu
Copley Columbus Bureau chief
Canton Repository
August 10, 2006
COLUMBUS -- For the second time this summer, a member of the state’s teacher pension board has resigned.

Stephen A. Buser, a former finance professor at Ohio State University, is resigning effective Aug. 17. He’s citing potential ethical conflicts between his work on the board of the State Teachers Retirement System and his investment consulting practice.

In June, Judith Dunn Fisher resigned, saying she was driven to do so by “the inability and/or unwillingness of the STRS board (and its leadership) to ensure civility and respect ... .”

Fisher, who had two years remaining on her four-year term, was appointed by Gov. Bob Taft, who has not named a replacement.

Unlike Fisher, Buser said he had no problem with how the board operated. Instead, he said he worried that his consulting work would conflict with the legal requirement that he not work with any organization that has business or seeks to do business with retirement system.

Buser was appointed by former Treasurer Joseph Deters and had two years remaining in his term. Brian Cunningham, a spokesman for Treasurer Jennette B. Bradley, said the process will begin to name a replacement.

Because of the restrictions placed on board members, Buser said he gave up part-time teaching at Ohio State and had turned away several clients. He said his financial status didn’t influence his decision.

“I have a fiduciary responsibility to the (system’s) members,” he said. “I was not happy that (my work) could lead to problems.”

Buser said he had not sought the advice of the Ohio Ethics Commission about whether there was a conflict of interest. He suggested it could be difficult for a qualified replacement not to have the same potential problems.

Reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail:

Wednesday, August 09, 2006

Dennis Leone on Buser resignation

From Dennis Leone
August 9, 2006
I received a telephone call today from Paul Kostyu about the Buser resignation. He undoubtedly will have an article tomorrow. Dr. Buser called me last night and we talked for about 30 minutes about his situation. While I do not have all of the details, and I have not seen his full statement to the Board because I am now visiting family in Alabama and Florida, he did tell me that he believes he has developed a conflict of interest due to competing interests of companies he professionally consults -- which are companies that may wish to be considered for future STRS work.
One thing I said to Paul Kostyu (which he may or may not use in his article tomorrow) is the fact that Dr. Buser was the one Board member who pushed for the full Board to develop a Doomsday Plan (which he called a "Contingency Plan") in the event that a catastrophe occurs in the future that sends the stock market straight downhill. While Dr. Buser pushed for an aggressive approach by STRS investors to achieve stock market gains (which WAS approved) he always stated that the aggressive approach carries high risk, which is why he also pushed for a "Contingency Plan" to be developed (which we HAVE NOT yet done).
John Lazares and I both agree that Dr. Buser was right. We actually should have developed the Contingency Plan BEFORE we adopted our investment strategy. Dr. Buser said this over and over again, but no one on the Board really responded. Speaking for myself, I did not fully appreciate what he was saying on this score, but I came to understand it months later. I worry now, with Dr. Buser gone, that it will be more difficult for the Board to agree on such an important measure. It must happen in order to mitigate the negative aspects of [any] terrible national/world event that collapses the stock market. Board members, in my opinion, may be resistant to taking the tough steps needed to take to protect our pension as much as possible in advance of a tragedy. Steps will need to be taken that some of my fellow Board members, OEA, and future retirees will NOT want to hear. As John Lazares has said often: "Do we want to have a pension in the future of not?" I told Paul Kostyu that I hope to do as much as I can in Dr. Buser's absence for this plan to be developed. It MUST happen. This is far more important than health care plans. I am talking about taking steps to protect our pension as much as possible. There ARE things that can be done.......Dr. Buser talked about them last night.
Regarding Dr. Buser's resignation, perhaps Conni Ramser should offer her own "official" reason for the resignation. She certainly thought she was qualified to speak on Judith Fisher's behalf. Comments by Ramser and Fisher were not only unprofessional, they were a total disservice to STRS. They both often said: "Now Dennis, let's put the past in the past." Then they shoot from the hip with cheap shots, which caused an undoing of many positive things that were moving forward. How can I respect anything that Ramser says in the future? Maybe Ramser and Gary Allen attended the same inservice session on how to attack those who stand for things you don't like.
Regarding Judith Fisher's replacement, I spoke with the Governor's Chief of Staff (Jon Allison) for nearly an hour today. I told him I hope Fisher's replacement will not be a cry baby, will have a understanding of the basic differences between a public board and a corporate board, will develop a complete understanding of the problems caused by the past actions of the Board and STRS Staff, will not pretend that he/she knows as much about things like the Sunshine Law as he/she does about investments, will not consider it "intrusive" if a Board member wants basic budget data and staffing information before he/she votes, and will not label it "micro-managing" if a Board member wishes specific information before he/she votes on a multi-million dollar vendor contract or a settlement agreement. I told Mr. Allison that I was not legally permitted to suggest a replacement by name. Mr. Allison said he understood and that he would a have a conversation with the governor about the issues I raised. I told him I was speaking for myself, not for the full Board. We talked a great deal about pension reform, my 2003 findings, and all of the work that went into the passage of SB 133 in 2004. He has a better understanding of history than Judith Fisher did.
Dennis Leone

Comments on Steve Buser: Molly Janczyk, Dave Speas

From Molly Janczyk, 8/9/06

Also, my dear friend, caring is not enough. One has to be able to fight for the rt thing no matter who says otherwise and I don't think Steve had that in him. He wanted nice and I believe his major plan acc to what I heard him say was relying on the great returns. That is what we had before and are reduced to now to get back to norm except for the HCA's plan which you are not totally in agreement on as I recall. There are no other plans. Leone, Lazares are looking everywhere to save money.

From Dave Speas, 8/9/06
Hello, Stephen Buser was a professional person who was retired from our system. He cared about retirees and hated the infighting that went on and left once before and was talked into coming back. I am troubled that this man who truly cared for retirees and questioned some of the monetary policies may be replaced by someone who is politically minded and NOT on the retirees' side. People can disagree about daily policies and decisions but can be very insightful on economic issues that will cause the greatest harm to all of us retirees. Stephen Buser cared deeply about the plight of retirees and worked hard to safeguard the investment and long range planning of STRS. I am saddened by his decision to leave because of the political nature of the appointment and his sincere concern about recovering the money needed for healthcare. My very best wishes go to Stephen and I thank him for his service to all of us. Let us pray that the next person appointed will have the compassion and desire to safeguard the financial futures of all retirees. If they do not care enough to plan an emergency policy and question the decisions of the billion dollar experts for future planning and the actuaries who advise them, we will want to have him back. With Dr. Brown, an actuary who could question the actuaries on their figures and now we have to rely on hired actuaries who Dr. Brown questioned and made explain their figures and found them wanting in many cases gone, and Stephen Buser, who taught many of the investors who work at STRS now gone, we are at the mercy of political people and folks who may be even more entrenched in other backgrounds and interests not lined up with retired teachers. I hope we are lucky and good and honest people are appointed with no political agendas.
Dave Speas
From Molly, /9/06
I do believe Buser cared. I also believe he just couldn't see things in a way differing form his career experiences. He seemed to go back and forth with whom he was speaking but in the end couldn't escape his background. That is not to diminish him. He responded and tried to explain. It was difficult for him to 'get down' to a novice understanding and for him to change his beliefs.
No one suggest a blanket yes to Lazares and Leone but one has to think they are not wrong most of the time - esp. with hte documentation issues and limits and oversight of money and refusing to do business with consultants who have ethics violations- all things they had problems convincing the appointees otherwise.
They are all probably lovely people in other settings. I just want someone who is VESTED in STRS and who also has the EXPERTISE to watch over my money.
I wish Stephen Buser the very best. I don't think he has a mean bone in his body or any thought of not working for the retirees. I do think he comes from a different world and a different way of thinking based on that. What is micromanaging to some of the appointees is WHY we elected Lazares and Leone. They are used to making decisions, I guess, based on attorney advice. We found they were ill advised and voted on a vendor contract without knowing all the details and we paid for items they did not know were included despite Leone's strong advice not to approve contracts without documentation with vendors. Lazares and Leone have been the only 2 often on such items. Not good enough for me.
My opinion.
Molly J.

CORE members react to Dr. Buser's resignation 8/9/06

From Nancy Hamant, 8/9/06
Dr. Buser,
On behalf of Warren County retired teachers, I want to thank you for your efforts on behalf of all Ohio's teachers. You provided a voice of experience, patience and acceptance to all STRS members. Your presence will be sorely missed. We are sorry that you are leaving the STRS but we understand your need to concentrate on your personal business. Ohio's treasurer will be hard-pressed to find a replacement with your empathy, expertise and thoughtful examination of the issues facing STRS especially in the area of health care.
Again, thank you for the time you have given to all Ohio teachers.
Nancy B. Hamant,
Legislative Chair
Warren County Retired Teachers Association
Response from Steve Buser:
Thank you for the kind words. But I hope you are wrong with respect to finding a replacement. After all, I am a retired member of STRS as well !!
From Molly Janczyk, 8/9/06
Buser was a kindly man whom I personally liked but he did vote nearly always with the 9 on imp. issues affecting retirees. I personally was most disappointed in that. I feel we need more public minded appointees who feel they need documentation in front of them to approve contracts and that the Exec. Direc. needs oversight beyond a $1,000,000 limit. To my knowledge, Buser did not vote for these measures at all or it took some time. He voted with the majority most of the time on issues needing change and imp to retirees . Molly J.
From John Curry, 8/9/06
Below is a news release from STRS indicating that Board member Dr. Buser will resign from his Board position effective Aug. 17, 2006. Dr. Buser WAS reform minded and cared just as much for the health and welfare of retirees (as well as active teachers) as he did for the financial well being of our retirement system. He was and is a humanitarian as well as an investments expert - will his appointed replacement have ONLY a corporate mentality minus the reform mentality and a true concern for retirees' well-being in his/her votes on STRS issues that are not investments related as Dr. Buser did? ?? I guess we shall see. I wish Dr. Buser well.
John - a Proud CORE member.

STRS announces resignation of Board member Steve Buser

Aug. 9, 2006
The State Teachers Retirement System of Ohio (STRS Ohio) announced that Stephen A. Buser has resigned his position as a Retirement Board member, effective Aug. 17, 2006, to pursue his consulting interests. Dr. Buser was appointed to the board by Treasurer of State Joseph Deters on Dec. 2, 2004. The treasurer's office is responsible for appointing a successor to Dr. Buser.
Retirement Board Chair Conni Ramser said, "Dr. Buser's expertise in investments and his background in education made him a valuable contributor to board discussions. He will be missed by his fellow board members."
Amended Substitute Senate Bill 133 created three new appointed positions for the State Teachers Retirement Board. One position is appointed by the governor, one by the treasurer of state, and one is a joint appointment by the speaker of the Ohio House of Representatives and the president of the Ohio Senate. These appointees serve four-year terms on the board.

Tuesday, August 08, 2006

Hanke: Damon...'did not address the main issue' (sound familiar?)

Mike Hanke, general manager
Canton Repository
From his editorial, published August 7, 2006
The executive director of the State Teachers Retirement System, in commenting about a column I wrote about the system paying the health insurance for retirees who are rehired by school systems rightfully was critical of a comment I made about board members voting in their own self-interest. But the director did not address the main issue, which begs for logic of why the board pays that health insurance, when the school system itself should be doing that. The retirement system, in effect, is subsidizing the school systems from which its members retire.

Hanke is general manager of The Repository and may be contacted at

Monday, August 07, 2006

Aug. 17 CORE meeting time moved up to 10:00 a.m.

From Mary Ellen Angeletti
August 7, 2006

Subject: Results of CORE Adv.Bd. Voting & Final Plans for the Aug. 17th CORE Meeting

All of us concurred with beginning the CORE meeting on Aug. 17th at 10:00 a.m. so that is final. We will meet in the back cafeteria room. I have confirmed with Joyce Baldwin at STRS that our usual room will be available to us at this earlier time. There was disagreement among [Advisory] Bd. members regarding whether we should extend our CORE meeting into the Public Speaks portion of the STRS meeting. Considering the fact that there may be important discussion related to the changes in the composition of the STRS Board (Judith Fisher's resignation), it was felt by quite a few of us that we attend the Public Speaks as visible & concerned reps for CORE. So with this in mind, please plan on arriving at 10 on Aug. 17th.

Mary Ellen

National health insurance -- BOTH sides of the aisle blamed for ignoring it!

David Sirota, The Examiner (
Aug 7, 2006

Here’s an idea rarely discussed in our nation’s capital: Health insurance should not be a for-profit industry.
Think that’s a radical concept? If so, then the majority of Americans are radicals. According to a national Harris poll in 2003, a strong majority of American “would prefer health care services to be provided by non-profits or government.”
The public’s sentiment is understandable, given the facts. Take, for instance, a recent Reuters story on a major university study. “For-profit nursing homes and hospitals on average provide an inferior quality of care compared with their nonprofit peers,” the news service reported, adding that “Nonprofit hospitals are also better at keeping costs down.”
How about Businessweek’s June expose on the Veterans Administration? The magazine found that this nonprofit “nationwide health system that is run and financed by the federal government provides the best medical care in America.” It does so at the same time “VA has held its costs per patient steady over the past 10 years despite double-digit inflation in health care prices.”
Then there is Medicare. Harvard researchers have documented that America’s elderly, who are covered by the program, are 20 percent happier with their health care than other Americans who are in the private, for-profit system. And while roughly 15 cents of every dollar goes to “administrative” costs in the for-profit system, just 4 cents of every dollar goes to the same in Medicare.
So if Americans want the private profit motive removed from health care, and the data shows nonprofit health care delivers better, more cost-efficient care, then why do so few politicians in Washington talk about creating a government-sponsored, nonprofit universal health care system? Especially at a time when health care premiums are skyrocketing, more Americans are going uninsured, and voters consistently rank health care as a top concern, the question is critical.
Some claim the silence comes from voter opposition to the general concept of government health care. That assertion is not supported by facts. A 2003 ABC News poll found roughly two-thirds of Americans support a “universal health insurance program, in which everyone is covered under a program like Medicare that’s run by the government and financed by taxpayers.” Similarly, a 2005 poll by the nonpartisan Pew Research Center found a strong majority support “government guaranteeing health insurance for all citizens, even if it means raising taxes.” That included about half of core GOP voters.
No, as with everything in Washington, the real answer to the question is found by following the money. Politicians don’t talk about creating a not-for-profit health care system because they operate in a pay-to-play culture — one that rewards their silence.
Since 2000, the health industry has donated more than $370 million to the lawmakers of both political parties. The No. 1 recipient of that largesse last year was Republican Sen. Rick Santorum — the third-ranking Republican in the U.S. Senate who has ardently opposed a single-payer health care system. No. 2 was Democratic Sen. Hillary Clinton — who, just 12 years removed from her attempt to reform health care, is now giving speeches apologizing for her previous efforts. Also bathed in health industry cash has been Senate Majority Leader Bill Frist. He has been a key opponent of health care reform — not surprising, considering he is also one of the heirs of HCA, the largest for-profit hospital chain in America.
These campaign contributions and conflicts of interest guarantee that false debates substitute for a discussion of serious health care reform that might end health industry price gouging.
And make no mistake — a casual look at the headlines from research firm Weiss Ratings shows gouging is exactly what’s happening: “HMOs’ Profits Climb 81 Percent to $5.5 Billion in 2002”; “HMOs Earn $10.2 Billion in 2003, Nearly Doubling Profits”; “Nation’s HMO Profits Increase 10.7 Percent in 2004”; “HMO Profits Jump 21 Percent in First Quarter 2005.” You can bet those profits aren’t being plowed into better care — they are being put into the pockets of executives like UnitedHealth’s CEO William Maguire, who over the last few years alone has amassed $1.5 billion in executive compensation.
Thankfully, a diverse coalition including health care professionals and courageous politicians are fighting back. That includes 14,000 doctors who are now members of Physicians for a National Health Care Program. It also includes Sen. Byron Dorgan, D-N.D., who just published a bold new book showing how the current for-profit system is destroying America’s economy. He says it is time “we get [the government] more involved in cleaning up the health care mess.”
These and other leaders are breaking the silence and addressing the taboo subject of making health care off-limits to profiteers. And the louder their voices get, the closer this country will be to getting the not-for-profit health care system its citizens want and deserve.
David Sirota is the author of the new book “Hostile Takeover,” a national best-seller (Crown 2006). He is the co-chair of the Progressive States Network (

Educators -- This time, the challenge IS PUBLIC! -- The "other" Dennis is reform minded also!

From John Curry, Aug. 7, 2006


CORE, Allen County Retired Teachers Association member, and candidate for the Ohio House of Representatives, Dennis Shreefer, marched on Columbus several ago in the CORE sponsored march to "demand reform" at STRS. You remember that one, don't you? It was the march that CORE member Sondra Stratton planned, ORTA discouraged, and after its success ran full color photo coverage of on their website - yeah, that's the march!

Dennis Shreefer was aware of the "STRS mess" and has addressed it in the past. He not only backs CORE reform - has publicly stated such on numerous occasions - but is against the privatizing of public education by charter schools whose management is far from transparent and whose motive is to pocket our tax monies.

His opponent is now "foot dragging" to agree with Dennis's repeated requests for a timely series of debates. This time, the challenge is PUBLIC! If you live in the 4th District ( which is now Allen County only) please back this reform candidate with your support. Dennis Shreefer's letter to the editor appears below. ...and if you don't live in Allen County -well- you still might want to see what a fellow CORE member has to say about critical issues that affect ALL Buckeyes.


P.S. - The OFT has endorsed this reform candidate.

LETTER: Many issues being ignored

Lima 08/07/2006
Lima News

As those of you who have followed the 4th District state representative’s race know all too well, I have attempted to draw my opponent, Matt Huffman, into a series of debates on the issues of vital importance to Allen County residents. I have been met with a stone wall with Huffman insisting he’ll debate me in the fall, but not before. In fairness to the 4th District constituency, we can’t afford to wait until Sept. 23 to give full justice to the issues that will decide our future. So there can be no mistaking the specifics of what I’m proposing, I’m going to spell them out right here. First of all, the debates should be real debates, not joint news conferences. I’ve just signed on to one of those events for Sept. 28. A few of those are fine, but I want a nitty-gritty faceoff where both sides have nowhere to hide. That’s why I’m proposing an Oregon-style debate with a cross-examination component. As an attorney, my opponent should welcome such an opportunity. Judging from his nonresponse to my numerous e-mails on the subject, he apparently doesn’t. Here are the subjects that need to be debated: The recently passed TEL-light legislation, Senate Bill 321; education (K-12/higher education/charter schools/vouchers); taxes; health care and prescription drug prices/Medicare part D; jobs and work force issues; and corruption. My opponent can add debate topics of his choice. Our representatives will work out the subject matter of each debate and mutually acceptable sponsors and locations. In closing, here is my official challenge: Matt Huffman, I challenge you to a series of debates beginning on the earliest possible date in August. I await your response.

Note from John - here's a link to Dennis Shreefer's website. He states his positions re. education, healthcare, and other matters critical to educators (and non-educators) on this site. Please give it a look --

Sunday, August 06, 2006

Wanna vote on Nov. 7? -- Have you checked the address on your Buckeye driver's license? -- 11 out of 27 ISN'T perfectly "clear!"

Activists: Advisory proves Blackwell suppressing vote
Plain Dealer, Friday, August 04, 2006
Ted Wendling
Plain Dealer Bureau Chief

Columbus -- Voting-rights activists on Thursday produced what they said is the most compelling evidence to date that Ohio Secretary of State Ken Blackwell is trying to suppress the vote in November.

In an advisory that contradicts a provision in the voter-reform bill legislators passed last year, Blackwell's office informed county boards of election on June 5 that voters must present a photo ID "showing the voter's name and current address" to cast a regular ballot.

That conflicts with the new law, which permits a person to vote by regular ballot even if the ID -- typically a driver's license -- has the voter's former address.

After ignoring the activists groups' entreaties since early June -- even after they threatened to go public -- Blackwell's office sent an e-mail to all 88 county elections boards Thursday. It reiterated instructions the office sent in May that voters who present an ID with a former address may cast a regular ballot if they provide the last four digits from their ID card.

"It's not satisfactory," said Suzanne Gravette, spokeswoman for the Coalition on Homelessness and Housing in Ohio, or COHHIO. "It's not a directive and it's not working," she added, citing a COHHIO survey that showed mass confusion among county elections officials.

Among 27 elections boards that were surveyed, 11 said voters who show up with ID that doesn't match their address in the poll book will have to vote by provisional ballot. Michael Vu, director of the Cuyahoga County Board of Elections, said his poll workers have been instructed to allow such voters to cast a regular ballot.

Voting by provisional ballot requires a person to fill out four pages of forms and risk that his vote won't be counted if he makes even a minor error, COHHIO Executive Director Bill Faith said. He noted that 22 percent of the provisional ballots cast in Ohio in 2004 weren't counted.

Faith also released a statistical study by researchers at Cleveland State University showing that up to 1.2 million Ohioans carry driver's licenses that list former addresses. The report determined that between 325,000 and 638,000 of those people will vote in November.

In a related development Thursday, the 6th U.S. Circuit Court of Appeals ordered Blackwell to pay $64,613 in attorney fees to the Sandusky County Democratic Party.

It concerned a lawsuit the county party filed challenging Blackwell's directive to boards of elections pertaining to the counting of provisional ballots in November 2004.

The ID dispute is the latest chapter in a relentless campaign that voting-rights groups and Democrats have waged against Blackwell over what they perceive as the Republican gubernatorial candidate's attempt to disenfranchise Ohio's poor and black voters.

Blackwell and his supporters have responded that the critics are simply partisans who don't like the reforms that majority Republicans passed last year.

The two sides have agreed on virtually nothing and disagreed again Thursday.

"This issue is not about a problem with the statute, this issue is a problem with implementation of the law," Faith said, placing the blame squarely on Blackwell.

Responded Blackwell's spokesman, James Lee: "I don't see how it could be any more clear."

Plain Dealer reporter T.C. Brown contributed to this story.

To reach this Plain Dealer reporter:, 1-800-228-8272

7 million to hit "donut hole" trap - from Suddenly Senior

From Suddenly Senior
Millions hitting Medicare 'doughnut hole' trap
Author: Roberta Wood People's Weekly World Newspaper, 08/03/06

Seven million seniors will face dire health and financial consequences as they begin falling into Medicare Part D's "doughnut hole," warned several members of Congress at a July press conference.
President Bush's prescription drug plan creates a massive gap in coverage which the average Medicare-eligible American will hit Sept. 22, said a report from the Campaign for America's Future. The gap results from the convoluted provisions of the Part D plan, which require beneficiaries to pay not only an initial deductible and then 25 percent of drug costs. After they incur $2,250 in expenses for the year, beneficiaries must also pay for all additional drug costs until the total exceeds $5,100. Above that level, insurance will again kick in, paying 95 percent of drug costs.
While in the doughnut hole, seniors will be forced to pay the full cost of their prescription drugs on top of Medicare Part D's costly monthly premiums.
"The 'doughnut hole' will create a dangerous ripple effect on the health of America's seniors," said Rep. Marion Berry (D-Ark.). "Seniors will have to scale back on critical medications which could endanger their health and increase health care costs over the long run."
Rep. Jan Schakowsky (D-Ill.) said that in crafting Part D last year, the Republicans could have allowed Medicare to negotiate for lower drug prices like the Veterans Administration does. Instead, "they chose to side with the drug companies," said Schakowsky, and shift costs to seniors and people with disabilities.
"The pharmaceutical companies killed every attempt to allow Americans to benefit from the same low drug costs that other countries enjoy," said Rep. Darlene Hooley (D-Ore.).
Fifty-five percent of those entering the doughnut hole will not be able to escape it, said the CAF report. Over time that number will increase, as Part D's threshold for resuming coverage rises each year. Robert Borosage, CAF director, called for Congress to "take the Medicare prescription drug plan out of the hands of private insurers and requiring the government to negotiate lower prices."
How much time and money does the Medicare drug plan waste?
The doughnut hole gap was only necessary because the plan's overall design added significant costs and complexity, according to a July 25 report by the Center for Economic and Policy Research. That report says the excess costs of the drug benefit plan are much larger than the size of the doughnut hole.
If the drug benefit had been administered through the existing Medicare system, rather than through private insurers, the doughnut hole could be considerably smaller at no additional cost to the government. Furthermore, if Medicare had been allowed to bargain directly with pharmaceutical companies -- as is done by the Veterans Administration -- the savings would be more than twice the size of the doughnut hole.
The report notes that Medicare beneficiaries spent on average more than eight hours trying to review competing drug plans.
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