[Congressional Record Volume 145, Number 47 (Wednesday, March 24, 1999)]
[Senate]
[Pages S3249-S3251]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WELLSTONE:
  S. 696. A bill to require the Secretary of Health and Human Services 
to submit to Congress a plan to include as a benefit under the medicare 
program coverage of outpatient prescription drugs, and to provide for 
the funding of such benefit; to the Committee on Finance.


            medicare prescription drug coverage act of 1999

  Mr. WELLSTONE. Mr. President, I rise to introduce the Medicare 
Prescription Drug Coverage Act of 1999, a bill that calls for a full 
prescription drug benefit for all of America's senior citizens within 
the Medicare program.
  This bill is the Senate companion to H.R. 886, which was introduced 
by Congressman Barney Frank of Massachusetts earlier this month and 
which already has 22 House cosponsors.
  One of the beauties of the Medicare Prescription Drug Coverage Act of 
1999 is its simplicity. The Act does four things. First, it directs the 
Secretary of Health and Human Services to study the establishment of an 
outpatient prescription drug benefit under Medicare that provides for 
full coverage of outpatient prescription drugs. Second, the Secretary 
will determine the sufficiency of the estate tax to fund the costs of 
that outpatient drug benefit. Third, the Secretary must submit a report 
to Congress within six months that includes a legislative proposal to 
provide for full coverage of outpatient prescription drugs. Finally, 
the bill transfers Federal estate tax revenues to the Medicare Hospital 
Insurance Trust Fund where those monies will be placed in a separate 
Outpatient Prescription Drug Account to pay for this coverage.
  Mr. President, now more than ever, a Medicare prescription drug 
benefit is needed. When Medicare was first adopted the program was 
designed to reflect typical private health insurance which often did 
not include outpatient prescription drugs. Then and since, the 
pharmaceutical industry has opposed a prescription drug benefit in 
order to protect its profits without regard to America's senior 
citizens. Even today, the industry is unwilling to shed some of its 
profits to allow all senior citizens access to needed prescription 
drugs. But the time has come for Congress to say ``no'' to the undue 
influence of drug companies in Washington and ``yes'' to Medicare 
prescription drug coverage.
  Why has the need for the Medicare Prescription Drug Coverage Act of 
1999 because so acute? The reasons are well known. First, the cost of 
prescription drugs has skyrocketed in recent years. Last year alone, 
prices increased an estimated 17%. This increase in drug costs hits 
seniors disproportionately.
  A 1998 study by the minority staff of the House Government Reform 
Committee found that older Americans without prescription drug 
insurance pay on average twice as much as the discounted prices drug 
companies offer large scale purchasers like HMOs, pharmaceutical 
benefit managers and government agencies. Even more astounding are 
comparisons that show the price of some drugs are up to 15 times higher 
for seniors. Recalcitrance on the part of the pharmaceutical industry 
and the Congress has not only forced seniors to the pay for drugs out 
of their own pockets, but the price seniors pay is a national disgrace.
  The burden on seniors is hard for them to avoid. More than \3/4\ of 
Americans aged 65 and over are taking prescription drugs. The average 
senior citizen takes more than four prescription drugs daily and fills 
an average of 18 prescriptions a year. Older Americans take 
significantly more drugs on average than the under-65 population. One-
third of all drugs are prescribed for senior citizens even though 
seniors account for only 12% of the population.
  Not only do older Americans spend almost three times as much of their 
income (21%) on health care as do those under the age of 65 (8%), but 
prescription drugs are the largest single source

[[Page S3250]]

of out-of-pocket expenses for health services paid for by the elderly--
more than doctor visits or hospital admissions. The primary reason for 
this is that Medicare does not cover outpatient prescription drugs.
  It is totally unacceptable that 37% of seniors, nationally, have no 
prescription drug coverage and another 15-20% have totally inadequate 
coverage. In my state of Minnesota, where Medicare HMO drug coverage 
without additional cost is virtually nonexistent, close to 65% of 
seniors have no outpatient drug coverage at all.
  The result of this drug pricing inequity and excessive cost burden 
frequently leads seniors to discontinue their medications against 
medical advice, to lower the dose they take to make their prescriptions 
last longer, or to take their medicines as prescribed but then skimp on 
food and other necessities. Whichever path is taken results in a 
decrease in health and an increased likelihood of an expensive hospital 
intervention. That is why we need the Medicare Prescription Drug 
Coverage Act of 1999. Not to provide this benefit is being penny-wise 
and pound foolish.
  Minnesota seniors and others who live in states adjacent to Canada 
and Mexico often travel hundreds of miles and cross international 
borders to obtain drugs at prices only available in this country when 
negotiated by volume purchasers. Mildred Miller, a 78 year old 
constituent of mine from Minneapolis, found it necessary to travel to 
Canada and to send a friend to Mexico in order to afford the Tamoxifen 
her doctor in Minnesota had prescribed. And she is not alone.
  For some seniors the high price of outpatient prescription drugs has 
not yet been a burden. They are the lucky ones who are members of 
Medicare HMOs in counties where the Medicare reimbursement rate to HMOs 
has been high enough to allow a prescription drug benefit, or are 
fortunate to be wealthy and healthy enough to be able to purchase one 
of the three Medigap policies that include a prescription drug benefit, 
or have drug coverage under health insurance benefits provided by 
former employers.
  But for those for whom the high price of drugs has not yet been a 
burden, the future isn't particularly bright. Medicare HMO 
reimbursement rates are being reduced and many HMOs have cut back or 
completely cut out their drug benefit. Medigap policies that cover 
prescription drugs are expensive, have high $250 deductibles, 50% 
copays, and caps on benefits of $1250 or $300 per year. Health care 
benefits offered by former employers are becoming less and less common 
and less generous.
  The good alternatives today are out of reach of most senior citizens. 
For example, in Minnesota, a Medicare-Choice prescription drug coverage 
option with 20% copay, no deductible, and no cap costs $130 per month. 
It is no wonder that from Maine to Minnesota to the state of Washington 
and down to Texas, America's senior citizens are forced to leave the 
country so they can afford to take the medicines they need. What they 
find are essentially the same prescription drugs at half of price. With 
the Medicare Prescription Drug Coverage Act of 1999, they won't have to 
flee their own country.
  What is needed is a comprehensive prescription drug benefit that 
includes outpatient drugs--the same sort of prescription drug benefit 
available to members of Congress--with no cap, reasonable deductibles 
and reasonable copays. That is what this legislation calls for.
  An important aspect of the Medicare Prescription Drug Coverage Act of 
1999 is that it calls for a full prescription drug benefit--not one 
capped at a certain limit. Medicare today doesn't limit the number of 
necessary doctor visits or the number of needed operations--and it 
shouldn't. Prescription drugs now are as critical as those doctor 
visits or operations and it is unconscionable for necessary drugs not 
to be covered just as fully. If we limit the maximum benefit, we 
penalize the sickest and most frail elderly who have the greatest need 
and require the greatest number of prescription medications.
  I expect that other Medicare prescription drug bills will be offered 
in this Congress, but I fear they will not provide the full protection 
seniors really need. If you have a major life threatening illness or 
multiple chronic diseases (something that is hard to predict before it 
happens), your monthly drug bill will quickly exceed the oft cited 
figure of a $1500 annual maximum. With such coverage, the sickest and 
most needy seniors will quickly find themselves out of the benefit. As 
I travel about the state of Minnesota, I frequently hear stories of 
elderly citizens saddled with prescription drug costs in excess of $300 
per month who are trying to make ends meet on a monthly income of 
$1,000. That is why full drug coverage is so important.
  What is also important to know is that the cost of providing a full 
prescription drug benefit is affordable and not that much more than the 
cost of a limited benefit. In 1998, the Lewin Group estimated that a 
Medicare prescription drug benefit in 1999 with a $250 deductible, a 
20% copay and a $1500 annual cap would cost $13 billion. The same plan 
with no annual cap, providing full protection, would cost $17 billion. 
Revenues from the estate tax, which will fund the benefit, are 
estimated to be in the $19 billion to $23 billion range. That is more 
than enough to provide full coverage the full benefit.
  Finally, Mr. President, let me say a few words about why using the 
estate tax to pay for a Medicare prescription drug benefit makes a lot 
of sense. Many members of Congress have argued that the estate tax is 
no longer needed for general revenue. If so, there is a great deal of 
logic in using it for a prescription drug benefit under Medicare. The 
estate tax today applies only to individual estates that are worth more 
than $650,000 and to estates of married couples worth more than $1 
million. Over the next seven years the amount exempt from the estate 
tax will rise to $1 million for individuals and $2 million for couples. 
Well over 90% of the estate tax comes from wealthy individuals who were 
65 or older at the time of their death. Most of these people were 
receiving medical care and benefiting from Medicare coverage. Thus, 
this bill recycles back into the Medicare program--for badly needed 
prescription drug coverage for all--money from people who benefited 
from their Medicare entitlement but were not in financial need of it. 
That only makes sense. For it is more important to preserve and expand 
the Medicare program than it is to provide tax cuts for the richest 
Americans.
  Mr. President, it is unconscionable that America's senior citizens 
have such difficulty obtaining the fruits of the scientific advances 
made by America's pharmaceutical industry. Every day we delay, millions 
of senior citizens struggle to determine how they will be able to 
afford their next prescription refill. The time to end that struggle is 
now. That is why I am introducing the Medicare Prescription Drug 
Coverage Act of 1999 today.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 696

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Medicare Prescription Drug 
     Coverage Act of 1999''.

     SEC. 2. STUDY AND LEGISLATIVE PROPOSAL TO CONGRESS.

       (a) Study.--The Secretary of Health and Human Services 
     shall conduct a study with respect to the establishment of an 
     outpatient prescription drug benefit under the medicare 
     program that provides for full coverage of outpatient 
     prescription drugs for medicare beneficiaries.
       (b) Additional Matters Studied.--In conducting the study 
     under subsection (a), the Secretary of Health and Human 
     Services shall include a determination of whether Federal 
     estate tax revenues, transferred to the Federal Hospital 
     Insurance Trust Fund by reason of the amendments made by 
     section 3 of this Act, are sufficient, in excess of the 
     amount required, or insufficient to defray the costs of such 
     outpatient prescription drug benefit.
       (c) Report to Congress.--Not later than 180 days after the 
     date of the enactment of this Act, the Secretary of Health 
     and Human Services shall submit to Congress a report 
     containing a detailed description of the results of the study 
     conducted pursuant to this section, and include in such 
     report a legislative proposal to provide for such outpatient 
     prescription drug benefit.

[[Page S3251]]

     SEC. 3. TRANSFER OF FEDERAL ESTATE TAX REVENUES TO MEDICARE 
                   PROGRAM TO OFFSET COSTS OF PRESCRIPTION DRUG 
                   BENEFIT.

       (a) Transfer to Federal Hospital Insurance Trust Fund.--
     Section 1817(a) of the Social Security Act (42 U.S.C. 
     1395i(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (1),
       (2) by striking the period at the end of paragraph (2) and 
     inserting ``; and'', and
       (3) by inserting after paragraph (2) the following new 
     paragraph:
       ``(3) the taxes imposed by chapter 11 of the Internal 
     Revenue Code of 1986 with respect to estates of citizens or 
     residents reported to the Secretary of the Treasury or his 
     delegate on tax returns under subtitle F of such Code, as 
     determined by the Secretary of the Treasury by applying the 
     applicable rate of tax under such chapter to such estate.''.
       (b) Establishment of Separate Account for Outpatient 
     Prescription Drug Benefit.--Section 1817 of such Act (42 
     U.S.C. 1395i) is amended by adding at the end the following 
     new subsection:
       ``(l) Outpatient Prescription Drug Account.--
       ``(1) Establishment.--There is hereby established in the 
     Trust Fund an expenditure account to be known as the 
     `Outpatient Prescription Drug Account'.
       ``(2) Crediting of funds.--The Managing Trustee shall 
     credit to the Outpatient Prescription Drug Account such 
     amounts as may be deposited in the Trust Fund pursuant to 
     subsection (a)(3).
       ``(3) Use of funds.--Funds credited to the Outpatient 
     Prescription Drug Account may only be used to pay for 
     outpatient prescription drugs furnished under this title.''.
       (c) Effective Date.--The amendments made by this section 
     apply to payments received by the Secretary of the Treasury 
     on or after the date of the enactment of this Act for taxes 
     imposed by chapter 11 of the Internal Revenue Code of 1986.
                                 ______