[Congressional Record Volume 145, Number 93 (Monday, June 28, 1999)]
[Senate]
[Pages S7681-S7682]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  MEDICARE PRESCRIPTION DRUG COVERAGE

  Mr. WYDEN. Mr. President, and colleagues, this is going to be an 
important week in the debate about the future of the Medicare program. 
The White House is coming forward with several useful Medicare 
proposals. Democrats and Republicans on both sides of the Hill are 
similarly focused.
  This morning I have come to the floor to zero in on the issue of 
prescription drug coverage for older people under Medicare. I believe 
if the Senate builds on a bipartisan proposal already approved by a 
majority of Senators, it will be possible to responsibly add 
prescription drug coverage to the Medicare program in this session of 
the Congress.
  A few weeks ago, 54 Members of this body voted for legislation 
offered by

[[Page S7682]]

Senator Olympia Snowe and myself to finance prescription drug coverage 
for seniors under Medicare with a tobacco tax. Senator Snowe and I have 
now developed a specific proposal that calls for a 55-cent-a-pack 
tobacco tax that would be used to cover the prescription drug needs of 
older people under Medicare. We think that is appropriate because, of 
course, the Medicare program spends upwards of $10 billion a year 
simply paying for tobacco-related illnesses that older people have 
suffered.
  Under the Snowe-Wyden proposal, we would be able to raise $70 billion 
in order to cover prescription drug benefits for older people over the 
next 10 years. That is hard dollars to cover this important benefit. It 
is not phantom funding. It is not sleight of hand. It is not a kind of 
wish-and-hope, pie-in-the-sky way to take care of this particular need 
for older people. It is a concrete, tangible concept.
  A majority of the Senate, Senators of both political parties, have 
voted for it. I am very hopeful that it will be possible now for the 
Senate to build on this support, with bipartisan approval, to actually 
get the job done and support older people.
  In the legislation that Senator Snowe and I have put together, we 
envision this $70 billion being used to assist older people with the 
insurance premiums that they now pay for Medicare supplemental 
policies. As we know, many of our seniors have Medicare supplemental 
policies. Many of our seniors participate in what is called Medicare 
Choice, a program that involves Medicare HMOs. It may well be that a 
number of seniors wish to purchase policies that cover only 
prescription drugs.
  But what Senator Snowe and I have developed would be voluntary. No 
senior would be required to do it. The Presiding Officer and I will 
recall the catastrophic care fiasco of several years ago when older 
people were concerned about being required to pay for something they 
did not really need or did not particularly want.
  That would not be the case under the legislation developed by Senator 
Snowe and I. It would be voluntary if an older person chose to 
participate in the program; and $70 billion in real funding would be 
eligible to assist the older people who desire to have that coverage as 
part of their Medicare.
  Senator Snowe and I believe the best way to deliver this coverage is 
to build on a model that Members of Congress know a fair amount about, 
and that is the Federal employee health plan.
  Senator Snowe and I recognize that program covers different people 
than we would be covering under Medicare, so our delivery system for 
this particular benefit would be a kind of senior citizen's version of 
the Federal employee health plan. We call it the SPICE Board. It stands 
for Senior Prescription Insurance Coverage Equity. We consider it a 
kind of senior citizens' friendly version of the Federal employee 
health plan.
  We have incorporated some of the very good ideas that have come from 
Families USA, the seniors' advocacy group, the National Council of 
Senior Citizens, and a variety of the senior citizens' organizations, 
to ensure that the SPICE Board that would deliver this system would 
offer choices and competition for older people but at the same time 
would not allow cherry-picking; so that a plan could not take just 
healthy people, it would make sure there were protections against 
adverse selection.

  We bar the use of preexisting conditions. A lot of the problems we 
have seen with insurance coverage in the past would not be allowed 
under the SPICE Board because we have incorporated many of the good 
ideas that have come from AARP and Families USA and the National 
Council of Senior Citizens so as to ensure that the SPICE Board would 
offer these benefits to older people in a senior-friendly way.
  At the same time, it is important to note that this is a competitive 
model. This will help us to hold costs down because older people would 
have the kind of bargaining power, through the SPICE Board, that an HMO 
has today when it bargains for younger people getting prescription drug 
coverage under the Federal employee health plan.
  I think it is particularly sad to see older people, many of whom have 
16, 18, 20 prescriptions they are using in a year, paying well over 
$1,000 out of pocket for their medicine. It is particularly outrageous 
that they end up paying a premium, since they don't have coverage, when 
they walk into a pharmacy and pay out of pocket. They have to pay more 
because, in effect, they are subsidizing those who have bargaining 
power in the private sector who get their coverage through a managed 
care plan.
  We use an approach that uses markets, offers choice, avoids price 
controls, but makes sure that through the SPICE Board, older people 
would have the kind of bargaining power and clout we see HMOs having in 
the private sector.
  I am very hopeful that this week, as the Congress moves to have a 
vigorous discussion about Medicare--the President's proposal is coming 
tomorrow; our colleagues on both sides of the Hill expressing great 
interest in this issue--Members will reflect on the fact that a 
majority of the Senate has already voted for the Snowe-Wyden proposal 
to finance this coverage with a tobacco tax. It is only fair, because 
of the costs Medicare incurs related to tobacco. We know now that a 
bipartisan group of Senators is willing to at least look at that 
approach to finance this coverage.
  I am also very hopeful that our colleagues will steer clear of some 
of these price control ideas that would create more bureaucracy. 
Incidentally, most of these price controls just shift the cost onto the 
backs of other consumers. I am very fearful that if we set up a price 
control regime for older people under Medicare, a lot of low-income 
folks, African Americans, Hispanics, and others would end up seeing the 
costs shifted onto them because they wouldn't have any protection from 
this price control regime.
  In addition to the real intangible way that is going to be essential 
to finance this program, we ought to use a concept the Congress is 
familiar with for delivering the benefit. Under the Senior Prescription 
Insurance Coverage Equity Program, the SPICE Program, we would be able 
to do that. We would be able to deliver the benefit in a way that 
allows senior citizens to exercise clout in the marketplace and be in a 
position to hold their costs down. There would be real consumer 
protections because we have incorporated the good ideas from Families 
USA and AARP and the National Council of Senior Citizens.
  I am very hopeful as this debate goes forward this week, our 
colleagues in the Senate will see there is a chance to avoid some of 
the bickering and partisanship that has accompanied other issues, look 
to giving older people this important preventive benefit that is so 
critical but financing it in a real way, not with phantom kind of 
money, and then delivering the benefit in a way that steers clear of 
price controls but gives older citizens in our country the kind of 
bargaining power an HMO has so the older people can get reasonable 
prices for their coverage.
  I know the Presiding Officer has a great interest in this issue. He 
and I have worked often on this matter. He can count on the fact that 
Senator Snowe and I will be visiting with him, as well as other 
colleagues, because it is our intent to do everything possible to keep 
the Senate, at least on the prescription drug issue, focused on the 
real needs of older people and the opportunity to address this issue in 
this session of Congress with real and hard financing and a delivery 
system that will work for the 21st century.
  I yield the floor.

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