December 11, 2003
Jewish Elderly May Pay More for Drugs
A law that was supposed to ease the burden of prescription drug costs for the elderly may force some Jewish seniors to pay more than they do now.
The Medicare reform legislation, signed by President Bush this week, grants some relief in prescription drug costs for seniors. But other provisions of the law might adversely affect more affluent seniors, including Jews.
Jewish groups still are learning what the law will mean for Jewish seniors and already are looking at ways to amend it. Several Jewish groups opposed the legislation, claiming it did not go far enough to aid seniors. They are looking to join coalitions of other advocacy groups to seek a new Medicare reform bill, or amendments to the current one, before most of the provisions go into effect in 2006.
Other organizations, including representatives of Jewish nursing homes, say the law will grant Jewish seniors some relief and is a step in the right direction.
The Medicare issue is an important one for Jews, since they are older on average than the general American population. According to the National Jewish Population Survey 2000-01, 19 percent of the U.S. Jewish population is over age 65, compared to 12 percent of the U.S. population as a whole.
Because Jewish seniors tend to be more affluent than seniors in the general population, they may be adversely affected by the new Medicare laws. For example, Jewish seniors currently are more likely to be using private insurance, known as Medigap, to supplement what Medicare covers, including prescription drugs. But the new law prohibits Medigap policies from covering prescription drug costs, so seniors who rely on that service may soon have to pay more out of pocket.
The same is true for seniors who are on prescription drug programs through their employers or pensions. Some Jewish policy analysts fear that the prescription drug provisions in private insurance programs will be dropped or downgraded for retirees because of the availability of the optional Medicare program.
While the new law contains subsidies to encourage employers to keep prescription drug benefits for retirees, it's unclear how good drug benefits must be for businesses to receive the subsidy -- and analysts say some employers may downgrade their programs to the minimum required.
Another possibility is that Jewish seniors who currently have low drug costs will pay more to opt into the program when it begins in 2006 or when they turn 65, to avoid penalties for joining later.
B'nai B'rith International opposed the legislation, along with several other Jewish groups. Rachel Goldberg, B'nai B'rith's assistant director for senior services and advocacy, said the main concern was a gap in prescription drug coverage for seniors.
While the law offers discounts for those who spend less than $2,250 a year on drugs, the next discounts do not start until after one pays $5,100 a year.
"People are going to be really surprised when they look at it," Goldberg said.
The demographics of the Jewish community mean Jews may be among the first to see how the new provisions affect spending on senior services.
Not only is the Jewish community older, but Jewish families also have fewer children than the U.S. average, meaning that there are fewer sources of income to offset growing costs in a family.
"What's going to happen nationwide, we're a microcosm of that," Goldberg said. "It's going to happen to us first."
That includes assisting poorer Jews. While Jewish elderly generally have more money than elderly in the general population, 9 percent of Jews over age 65 live at or below the poverty level, and 18 percent live in households that earn $15,000 or less a year, according to the population survey.
Another 15 percent live in households that earn between $15,000 and $25,000.
People on Medicaid will have to begin paying a small co-payment, and poor Jews who do not apply for Medicaid may have to deplete their assets to receive increased benefits, Goldberg said.
"The low-income portions of the bill are better than we feared, but nowhere near as good as we hoped," she said.
Jewish groups say they're beginning to educate their membership about the new laws and are working with other advocacy groups to mobilize an effort to repeal portions of the legislation.
Advocates say several factors could help them make changes to the law, including the fact that 2004 is a presidential election year and that a lot of the law's provisions don't take effect until 2006.
But there is concern that some lawmakers will be disinclined to reopen the Medicare issue so soon after a long fight on Capitol Hill produced this legislation.
Bert Goldberg, president and CEO of the Association of Jewish Family and Children's Agencies, said his organization will analyze the law and try to advise seniors how to take advantage of its options.
"We now at least have something that deals with drugs for seniors, and we've never had that," he said. "That's at least something to be pleased about."