WASHINGTON - Lawmakers from both political parties say they are pushing to have Medicare pay for prescriptions so senior citizens get the drugs they need, but some corporations, including the Big 3, also could cash in.
That is because the unionized Big 3 pay medical bills for many retirees. Prescriptions are a significant and rapidly rising part of those bills. Under several proposals in Congress, Medicare would assume some of the companies' costs.
The House of Representatives narrowly approved one such version June 28.
"It's tens, perhaps hundreds of millions of dollars" that could be saved, said Rob Minton, manager of global human relations communications for General Motors. "That's money that is taken right off the bottom line."
The Big 3 say they favor changes that would control health care costs without hurting employees or retirees, including measures to speed approval of generic drugs. But they have been more low-key about their support for bills to shift some of their drug costs to the Medicare program, in part because the fate of the legislation is uncertain and any talk of altering Medicare is controversial.
Medicare is funded with a 2.9 percent payroll tax and premiums from participants.
The House bill, sponsored by Republicans, has a price tag of about $350 billion over 10 years. Democrats in the House and Senate say an adequate program would cost more than twice that amount.
Alan Reuther, the UAW's legislative director, said last month that the GOP version is a bad bill. He said the subsidy for employers is too low and could lead some businesses to drop coverage for employees. He said other wording of the bill could increase out-of-pocket costs for beneficiaries.
The numbers reveal the dimensions of the Big 3's problem, one not faced by overseas-based competitors, who have few U.S. retirees and in many cases provide fewer benefits.
GM's annual health bill is about $4.2 billion for active and retired employees and their dependents. More than $1 billion is for prescription drugs, and nearly 80 percent of that is for retirees and their dependents, numbering about 700,000 people, Minton said.
Likewise, if Medicare paid for drugs, Ford Motor Co. would expect to save a significant part of the more than $300 million it spends each year on prescriptions for 246,000 retirees and dependents, said Ford spokeswoman Francine Melotti.
The Chrysler group said it pays about $400 million a year for prescription drugs and that 60 percent of the total is for retirees and their dependents.