[Congressional Record Volume 146, Number 53 (Wednesday, May 3, 2000)]
[House]
[Pages H2488-H2495]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            ENACTING PRESCRIPTION DRUG BENEFITS FOR MEDICARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from Pennsylvania (Mr. Greenwood) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. GREENWOOD. Mr. Speaker, this evening some of my colleagues from 
the Committee on Commerce, as well as from the Committee on Ways and 
Means, are going to spend the next hour talking about a subject that is 
the subject of a lot of talk lately, and that is usually a good sign, 
because right before the Congress gets around to legislating, the level 
of rhetoric picks up and the amount of speeches on the floor increases. 
So I think we are getting actually very close to the point where we 
will, in fact, enact a prescription drug benefit for Medicare.
  In 1965, when Medicare was created, it was a big step in the American 
health care history. Prior to that time, if one is a retiree, if one 
was elderly or if one was disabled and one could not afford their own 
health care, they did not have any. So in 1965, the Congress of the 
United States, in a historic moment, decided to provide Medicare 
coverage for the elderly and ultimately for the disabled, and then what 
it covered was that which is most obvious, hospitalization and visits 
to physicians. No one really gave serious consideration in 1965 to 
extending that Medicare benefit to prescription drugs, for a couple of 
reasons.
  Number one, it was a huge step to do what the Congress did in 1965 in 
providing coverage for hospitalization and physicians; and, secondly, 
Americans were not relying upon prescription drugs anything like they 
are today. Today, we are blessed as a Nation, and indeed as a world by 
an industry that has created miracle drug after miracle drug; 
wonderful, brilliant scientists in laboratories who have cracked the 
mysteries of the human genome, who have cracked the mysteries of the 
human body physiology to the point where we can prescribe and create 
drugs for a variety of illnesses that used to not only cause great pain 
and suffering, but premature death. Today, if one does not have access 
in the year 2000, if one does not have access to a good prescription 
drug benefit plan, one simply does not have good access to good health 
care. So the Congress of the United States, although it has been 
talking for years about the need to provide this coverage, has 
heretofore, so far, not accomplished that.
  Why can we do it today and why are we talking seriously about it 
today? We are talking about it today because the Congress, in fact, 
since the Republicans have taken over the majority of the Congress, 
have taken the necessary fiscal steps to end the endless deficit 
spending that our Nation was experiencing for so many years. We have 
balanced the budget. We have reformed Medicare itself to bring the 
costs into a reasonable level. We have reformed welfare, and we are 
going to save something on the order of $55 billion, or probably $200 
billion over the next 5 years in welfare costs alone. We have

[[Page H2489]]

taken just this year, just in the last several months, we have taken 
Social Security finally off budget. We have said that no longer will we 
spend the Social Security surplus on a host of other causes, but, in 
fact, we will use Social Security payments only for Social Security and 
the rest of the surplus will be used to pay down debt; and we are now 
paying down the Nation's debt.
  So finally, now that the budget is balanced, now that we are paying 
down debt, now that we have a surplus, we are in a position to 
responsibly, to responsibly provide a prescription drug benefit for 
Medicare for the Nation's elderly and for the disabled. About two-
thirds of the Medicare population already has access to some kind of 
prescription drug benefit, but a fully one-third does not, and those 
are disproportionately low-income individuals.
  What are our goals in doing this? Number one, we do want to provide 
affordable coverage to every American who is a Medicare beneficiary by 
virtue of their age or their disability. Secondly, we want to do that 
in a way that does not break the bank all over again. We do not want to 
create a runaway spending program that is unregulated and causes the 
Federal Government to go back into the bad old days of deficit spending 
and budgets in the red.
  Thirdly, we want to reduce the cost of prescription drugs for 
everyone who is now paying the highest price. And today, if one does 
not have a prescription drug plan and a doctor provides a prescription, 
one walks into a pharmacy and they pay the highest price that anybody 
pays in the world, you may if you are all alone in the marketplace and 
do not have anyone to bargain for you.
  Finally, we do want to make sure that when we have accomplished this, 
that the industries, the pharmaceutical companies and their brilliant 
scientists, the biological industry that is doing so much to create new 
miracle cures will be vital enough to continue to provide those 
products for us into the next generation, the drugs that will 
eventually cure cancer, that will cure AIDS and so many other ailments.
  Mr. Speaker, I am joined this evening first off by a colleague from 
the Committee on Ways and Means who is working on a joint task force 
that the Speaker has put together, drawing on members of the Committee 
on Commerce on which I serve and the Committee on Ways and Means, the 
distinguished gentlewoman from Connecticut (Mrs. Johnson), who is an 
expert on health care, and I yield the floor to her.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, it is a pleasure to be with 
my colleague tonight to discuss the issue of Medicare covering 
prescription drugs. It is extremely important that we change the law so 
that Medicare will cover prescription drugs, because modern medicine, 
modern medical care, without medicines, is an oxymoron. We cannot have 
good medical care if we cannot buy prescription drugs that both cure 
illness now and manage long-term, chronic illnesses; really, as 
Americans, live longer. This issue of managing chronic illness is going 
to become a bigger and bigger issue and a more important one in our 
lives, and management of chronic illness is primarily a medication-
based science.
  We do have another chart here on the floor that I think is helpful in 
helping us discuss the problem of prescription drugs, because there is 
one very significant difference between the President's proposal in 
this area and the Republicans' proposal, the House Republicans' 
proposal. That is, if one looks there at the far end where the line 
goes way up, then one will see that for a small number of seniors, 
about 15 percent of seniors, 20 percent, the drug costs are extremely 
high, $6,000; $8,000; $10,000; $11,000 a year. People on fixed incomes, 
I mean the great majority, 85, 95, 99 percent of people on fixed 
incomes cannot handle $12,000; $11,000 in prescription drug costs a 
year.
  So we need to look at two things. First of all, we do need to look at 
protecting all seniors from catastrophic costs, from those very high 
drug costs often that follow remarkable lifesaving, life-preserving, 
quality-of-life-restoring cardiac surgery, cardiac surgical procedures 
that we are now capable of. So those very high-end drug costs, we need 
to protect our seniors against them. We also need to help those seniors 
that have the lowest incomes, to have a prescription drug benefit 
without facing the choice of food on the table, of decent shelter, and 
drugs; and one can see on this chart that the poorer beneficiaries who 
are under the current system are very much less likely to have drug 
coverage than, of course, our more affluent seniors. It is sort of a 
no-brainer, but the chart does show it.
  So it is very important that that 37 percent that are living on less 
than $10,000 a year have not only the program available, but the 
premium coverage, the premium subsidies that they would need to have 
the drug coverage that is so critical, not only to their recovery from 
illness, but to their quality of life in living with chronic disease.
  So our goal is both to provide prescription drug and total coverage, 
100 percent coverage for low-income seniors, but also to protect 100 
percent of all seniors from catastrophic drug costs. And then to 
create, for those seniors in between, affordable, insured drug policies 
that will guarantee that they will be able to have the drugs that are 
so critical to the quality of their lives.
  Just to go back to the preceding chart for a minute, we can see from 
that that the great majority of seniors do not spend more than $2,000 
on drugs; and 80 percent, if we follow that line out, if my colleague 
will follow that $2,000 line out, then it is clear that 80 percent of 
seniors do not have more than $2,000 in drug costs.

                              {time}  1700

  And the great majority have a lot less than that, and about 90 
percent do not have more than $4,000 in drug costs.
  So we need to help that group, but we need to really also think about 
the number that have very high drug costs. Because, frankly, my fear is 
that that number is going to grow as we develop the kind of 
sophisticated drugs we need to cure cancer, to cure some of the 
difficult diseases that haunt our elder years, prevent Alzheimer's, 
those kinds of solutions. And it is very possible that at least for a 
year or two at a time, many seniors are going to be faced with $10,000, 
$12,000, $14,000 drug costs. So catastrophic coverage is absolutely an 
essential part of a prescription drug program.
  Some people say to me, Why can we not have the government pay all of 
our drug costs, just like they pay all but 20 percent of office visits, 
all but the first day of hospital coverage? The answer to that, 
basically, is sadly very simple. It would bankrupt the Medicare 
program. And if we added all that spending on top of the current 
program, the younger generation would be spending more than half of 
their tax dollars on people over 65. It is simply sad but true.
  Sometimes my colleagues do not like me to say that, but right now, 35 
percent of all Federal spending goes to people over 65. So that means 
that our child, if we are a grandparent, our child in the tax force, 
all of their tax money going to Washington, one-third is going to 
subsidize the lifestyle of people over 65. If we do nothing, do not add 
prescription drugs, that will be up to 45 percent in 10 years. And very 
soon thereafter, if we add prescription drugs in with no participation 
from seniors, then over 50 percent of all of our tax dollars will be 
allocated to people over 65.
  Frankly, we will not be able to provide the public education our 
children need. We will not be able to provide the seaports, the air 
traffic control system, the highways that our economy depends on.
  So most seniors I know would not want that to happen. And, 
furthermore, many seniors I know have better drug benefit programs than 
Medicare could ever provide.
  Mr. GREENWOOD. Mr. Speaker, if the gentlewoman would yield briefly on 
that point, the question is why should the Congress not just say to 
every retiree, everyone on Medicare, every beneficiary: we will pay 100 
percent of all of your prescription drugs benefits. The answer is, in 
part as you said, the younger generation asked to pay that bill would 
be wiped out.
  But, secondly, two out of three seniors today already have a 
prescription drug benefit, many of them provided by their former 
employer. As I travel to

[[Page H2490]]

the senior centers around my district I say, How many of you already 
have some kind of a prescription drug benefit? And there is a show of 
hands. How many of you receive them from your former employer? And a 
goodly number of hands go up. Usually, it is either the big Fortune 500 
companies that were able to provide these generous benefits, or they 
worked for a governmental entity, a school district or a State or the 
Federal Government.
  If we moved in and started to pay all the prescription drugs, 
employers would drop that coverage like a rock and all of a sudden the 
two-thirds of the seniors who already have a benefit, albeit maybe not 
the perfect one and we might be able to supplement their benefits, but 
those would all of the sudden be shifted from the private sector to the 
public sector and be enormously expensive.
  Mrs. JOHNSON of Connecticut. That is a very, very important point. We 
do not want to shift costs from the private sector to the public 
sector, and we do not want to do it for another important reason. Many 
of the people who have coverage through former employers have very, 
very good coverage, and they have total choice of prescription or 
generic or whatever is best for them personally.
  If we look at Medicaid, if we look at the big managed care plans, we 
tend to have the choice of those drugs offered in a formulary. Maybe 
that formulary, in other words the choices of drugs, will be good. 
Maybe it will not. In the Patients' Bill of Rights we are going to give 
certain rights to go outside the formulary, but they will have to be 
documented by health need. And sometimes we would just rather have the 
one that we believe is going to be the best for us.
  That kind of total choice is not common in the plans that are out 
there now. And in order to provide a range of plans, in order to allow 
people who have that total choice through their employer to keep it, we 
need to provide many solutions so seniors have their choice of the kind 
of drug plan that will best suit them. We need to protect them from 
catastrophic costs. We need to guarantee that if there are a seniors 
out there with a $4,000, $6,000 annual income, they will have 
prescription drug coverage.

  But we also need to provide the opportunity for all of our seniors 
who currently get coverage to keep that coverage, if they choose it; to 
join another plan, if they choose it. And we want to be sure, this is 
very important to me, we want to be sure that the prescription drug 
programs can be integrated into the managed care programs, because many 
managed care programs now are developing ways to manage chronic 
disease, and they are doing it much better than we were ever able to do 
it under fee-for-service.
  Mr. Speaker, they are saying to people who are coming out of heart 
surgery: Listen, we will pay for your drugs, but you have to be part of 
this management protocol. Through that protocol, they cannot just 
follow the doctor's orders to take the medicine. They have to follow 
the doctor's orders to exercise. They to follow the doctor's orders to 
lose weight. But they are going to have help. They are going to have 
allies, and these programs that are providing allies to people are 
seeing people stopping smoking, not just for a month, not just for 2 
months, but permanently. Changing their lifestyle.
  So then, of course, the medicine does much better. The person does 
much better. So if we do everything our doctor says, we lose weight, 
exercise, and take the medicine, and we have allies to help us do that, 
then we are going to do better.
  More and more plans are saying they will give their insured customers 
a better deal on drug coverage if they will take their responsibility 
to take a holistic approach to their health and take responsibility for 
their health.
  So we want plans to have the opportunity to incentivize people and 
reward people for improving their own personal health, not just taking 
medicine, as important as that is.
  Mr. GREENWOOD. Mr. Speaker, if the gentlewoman will yield, what is 
interesting, of course, is that no matter who we speak to in this town, 
talk to Republican Members of the House or Democratic Members of the 
House, Republican and Democratic Members of the Senate, the President, 
et cetera, we all agree on one thing: let us provide a prescription 
drug benefit to Medicare beneficiaries, and let us do it this year.
  So there is wide agreement, which is historic. It has not really 
happened before. Now what happens? We have different opinions. The 
President has a plan. There are numerous plans in the House. 
Republicans in the House, like the gentlewoman from Connecticut and I, 
have a plan that we have proposed. And now we get into the business of 
deciding how to work these different ideas and merge them into one.
  What I find so frustrating is that it is an election year. It is not 
only an election year for the entire House and a third of the Senate, 
but for the presidency of the United States. And this issue is so easy 
to demagogue. If we listen to C-SPAN regularly and listen to the 
rhetoric on the floor, it is easy to accuse the other party of not 
really caring about seniors, and of course that is nonsense. We would 
not be here doing this job if we were not interested in the welfare of 
our constituents, particularly the elderly and those disabled who do 
not have a prescription drug benefit.
  So we are going to have a good discussion about methodology. How do 
we do this?
  What we do, what the Republican House plan does is say let us use the 
insurance model, since we know that pouring money and paying everything 
ourselves will not work for the reasons we have discussed. Let us 
create an insurance model.
  How do we do this? First off we want to make sure that that insurance 
premium is affordable for middle-class Americans. And as we look at 
this chart, again, insurance companies have been reluctant to provide 
affordable drug-only plans because of this end over here, because of 
that high end of the chart. Because they can sell a prescription plan 
tomorrow and the next day a brand-new drug comes out that costs a 
$1,000 or $2,000 or $3,000 a month; and it comes onto the market, and 
now the insurance company is losing money hand over fist.
  What we have said in our plan is we will stop the loss at somewhere 
in this range, somewhere between $6,000 and $8,000 is about where we 
will cut off the insurance company's exposure to risk, and the Federal 
Government, through Medicare, will pay for all of that.
  Now, we have a plan that only has to cover the first several thousand 
dollars of exposure, which most Americans will fall under that, and it 
becomes affordable.
  Now, how does it become affordable to the lowest end of the 
socioeconomic ladder? What we would do is we would pay 100 percent of 
the premium for everyone below 150 percent of poverty. So the poor 
elderly and the poor disabled would get free insurance. Talk about 
giving everything for free, they would get the whole plan free at no 
cost. For those middle-class-and-above Americans, they would have a 
small, relatively affordable monthly premium that they could pay and 
could choose between plans out there in the market to buy the plan that 
is best for them.

  An elderly person with very little in the way of prescription drugs 
might want a plan that has a low premium and a high deductible. If 
someone has a lot of expenditures, they might want a different plan. We 
enhance choice with our approach.
  Mr. Speaker, that is our idea in a nutshell, and we can go on later 
about some of the details. The President has a plan, as I say. But for 
goodness sake, what must happen this year is that Republicans and 
Democrats, the Congress and the President have to get together and say: 
let us roll up our sleeves, let us get the best of your ideas, the best 
of our ideas, merge them into a bill, get it signed into law. Because 
at the end of this year, either we will have done that and done a 
tremendous service to the people of this country, President Clinton 
will have some legacy, something that Presidents want to have before 
they leave office, and the system will have worked.
  On the other hand, if all we do is point our fingers at one another 
and try to take political advantage of the issue, shame on all of us. 
And what I recommend to the voters at the next election is vote us all 
out of office if we do not figure out how to work together 
collaboratively.
  Mrs. JOHNSON of Connecticut. One of the reasons we are doing this 
Special

[[Page H2491]]

Order is to point out how terribly important it is that we address this 
problem for seniors and also to point out how much agreement there is. 
The President's proposal is really a proposal to cover 50 percent of 
the costs of the drug. There is no proposal out there, because it is so 
expensive, that recommends covering 100 percent of the costs of the 
drug.
  I think people, sometimes when they hear us talk about covering 
prescription drugs under Medicare, they think we are talking about 
covering all of the costs. They think the President is talking about 
that.
  The President's proposal is really very simple. He is talking about 
covering 50 percent of the cost up to about $2,500. In other words, the 
insured would cover $1,250 and the Government would cover $1,250. And 
they would not cover the first $1,250; they would cover 50 percent of 
each premium up to that. And I am not sure whether the limit in the 
President's program is $2,000 or $2,500.
  But we can see from the chart that by having no coverage at all 
thereafter, that 20 percent of seniors that have the highest drug costs 
get very little help from the President's plan. But the House plan is, 
too, and I have not read another plan that is not a cost-sharing plan, 
usually 50-50.
  I think what is slowing down the production of the final bill a 
little bit is the complexity of the stop-loss provision, of helping 
everybody to be protected from catastrophic loss. It is a matter of 
peace of mind. It is a matter of confidence and ease and security in 
our elder years to have stop-loss insurance and know that prescription 
drugs will never bankrupt us, just like long-term care insurance gives 
a peace of mind.
  That is why we are working so hard this year to make long-term care 
premium costs deductible on income tax. We could do that. Then for a 
rather modest investment in a long-term care premium, we have the peace 
of mind of knowing that we will never have to spend down to poverty to 
pay for long-term care costs. And under prescription drugs, with a 
stop-loss provision, we will have the peace of mind of knowing that we 
will never be bankrupt by the costs of prescription drugs.

                              {time}  1715

  So this is not a concept that the President opposes at all. We are 
all talking within provisions that we all know would be helpful to our 
seniors. We simply have to work out, not only their costs, but how they 
fit in with the real world, how we can protect seniors who already have 
good drug coverage and do not want it disturbed, how we do not want to 
encourage their employers to drop good coverage.
  So we want to make sure that we do not compromise opportunities that 
seniors currently have but that we create new opportunities for seniors 
who either have no drug coverage or inadequate drug coverage.
  It is really important for everyone listening to remember that, under 
both the Republican and the Democrat and the President's plan, because 
those are the two on the table now, that all seniors would be helped.
  They would both be optional plans. They are voluntary. They are not 
mandatory. Seniors can elect them. That is why seniors who have other 
plans that they prefer can continue to benefit from those plans.
  Mr. GREENWOOD. Mr. Speaker, reclaiming my time, as we have discussed 
a little bit, there have been criticisms of the plans. And one of those 
criticisms has been, what part of the debate has been, what are we 
really going to do to lower the cost of prescription drugs?
  A lot of the debate and rhetoric that we have heard about this issue 
has been focused on strictly the cost of prescription drugs, how do we 
bring down the cost of prescription drugs.
  There are those who think that the answer to that question is to have 
some sort of governmental price controls on prescription drugs. That is 
a pretty scary proposition, because once we start down the road of 
price controls in a free enterprise market like the American system, we 
run the risk of killing the very industries that are providing these 
miracle drugs.
  So how do you do it? Well, the answer is that, for that one-third of 
the Medicare beneficiaries, the elderly and the disabled who do not 
have this coverage today, that one-third walks into a drug store with 
the prescription, they have an illness, they have an ailment, they are 
suffering from something, they go to their doctor, their doctor writes 
a prescription for them, they take that prescription, they go into the 
drug store, and they have to pay full retail price out of their pocket 
with nobody's helping them at all.
  Of course that is the most expensive way one can buy a prescription 
drug. Some seniors order the drug. The pharmacists fills the 
prescription, hands them the bottle, and the price tag. When they see 
the price tag, which is often, it is not anything for one prescription 
to cost $100 or $200, they are embarrassed and have to walk away from 
the drug store and say I do not have that kind of money.
  Others may be able to scrape together the money to pay for the drug. 
But then they take it home, and the label says take four times a day or 
six times a day, and maybe it is a prescription that they are going to 
need for the rest of their lives every month, week after week, for the 
rest of their lives, they know that they cannot afford to go back and 
fill that prescription over and over again.
  So, instead of taking the pill four times a day, they will take it 
two times a day. That does not do them any good because the 
prescription is not providing the kind of physiological response that 
it was sustained to provide. So that senior is really held hostage, and 
those are the seniors we are trying to help.
  So how do we help them and bring down the prescription drug costs at 
the same time, by allowing these elderly to join in a group health care 
plan. That is what we are doing, we are providing a group prescription 
drug plan for them that would cover large groups of Americans at a very 
affordable cost. Again, if one is low income at zero cost, if one is 
middle income and above at a very affordable monthly cost. Those 
individuals gain from the fact that they are now part of a big group.
  The spokespersons for that group, the leaders of the insurance 
companies, the managers of the insurance companies will then negotiate 
with every pharmaceutical company as to what price they are willing to 
pay. That is how we bring down the cost of prescription drugs because 
we are now having the big insurance plans that are buying drugs for our 
seniors and for our disabled, negotiating tough prices with the 
pharmaceutical companies so that we get and they get affordable prices.
  I have been joined now by the gentleman from Louisiana who is on the 
Committee on Ways and Means and on the Speaker's Task Force and has 
been the leader in drafting this prescription drug program.
  Mr. Speaker, I yield to the gentleman from Louisiana (Mr. McCrery).
  Mr. McCRERY. Mr. Speaker, unfortunately, I have been in another 
meeting on another health care subject and not been able to hear the 
discussion so I do not know what has been said so far.
  But I do want to compliment the President on coming forward with a 
plan. I do not want anything that I say here to say that I am not 
appreciative of the President getting in the mix and trying to put 
forward a prescription drug plan, because I think it is important that 
he be part of the process.
  All of us, the President, the gentleman from Pennsylvania (Mr. 
Greenwood), I, Republicans, Democrats, I think, agree that, in order to 
have a modern Medicare program, we have got to have a prescription drug 
benefit. Thirty-five years ago when Medicare was created, prescription 
drugs were a very small part of the health care regimen of a senior 
citizen. So we took care of their hospital needs and their doctor 
needs, Part A and Part B, and that was fine for most seniors.
  Today that has changed. Now if one takes care of the hospital bill 
and the doctor bill, in many cases, there is a third item, prescription 
drugs that constitutes a very large portion of that senior's health 
care needs, the health care regimen of that senior.
  So we all agree, and I think it is appropriate for all of us to be 
discussing how we best do this, including the President, Republicans, 
and Democrats. So I appreciate the President putting out a plan.

  I think the President's plan is insufficient. In his defense, he was 
trying to craft a plan that would meet certain

[[Page H2492]]

budgetary guidelines. His plan spends about $34.5 billion over 5 years. 
He decided to put the bulk of that money into a benefit for low-income 
seniors and giving every senior a very minimal benefit. Let me tell my 
colleagues what I mean when I say ``minimal.''
  Based on the figures provided by the White House for the premiums 
that a senior will have to pay, the level of the benefit, which is 
$2,000, once one reaches $2,000 of expenditures for prescription drugs, 
one's benefit is over under the President's plan.
  So when one adds up the premium that a senior has to pay for the plan 
and the co-insurance requirement, which is 50 percent, basically a 
senior will pay $1,750 for $2,000 worth of drugs. Not a great deal.
  But, again, in the President's defense, if one only has a limited 
amount of money to spend, in his case $34.5 billion over 5 years, and 
one provides 100 percent of the benefit to low-income seniors, there is 
not a lot left to give the average senior a benefit.
  So I think the President's plan, while it is a good start, is 
insufficient. The glaring insufficiency in the President's plan is that 
he does not give any protection to extraordinarily high costs that 
seniors may have. So that if one has got a senior citizen who has done 
everything right his whole life, he worked hard, he paid his taxes, he 
saved for retirement, and then after he is 65 years old, he contracts 
some chronic disease that requires a very high level of drug 
maintenance, he bleeds those savings. Those savings are just gone.
  That is not right. We ought to give seniors some protection against 
just financial ruin because of bad luck in health care and having very 
high prescription drug costs. Our Republican plan does that. That is 
why I think that we need to work with the White House, the White House 
needs to work with us.
  We need to get a plan in law that gives seniors, not only low-income 
seniors, that basic benefit that both our plan and the President's plan 
does, but also some protection against those very high drug costs that 
are killing some of our seniors, not killing, they are staying alive 
because of those drugs, but it is bleeding their savings; and that is 
not right.
  Mr. GREENWOOD. Mr. Speaker, reclaiming my time, just if I can comment 
on the gentleman's point for a moment. It has been my experience that, 
the older I get, the more cautious I become. As we go through life, we 
bump up against enough things that, by the time one reaches the age of 
65 years of age and one is ready to retire one is not looking for any 
more risk. One wants to pretty much know what one's life is going to be 
like for one's golden years.
  The problem that, the criticism that we do have with the President's 
plan is, as one said, one is sitting there with this big risk over 
one's head; and that is, maybe when one is 65 and when one is 66 and 
when one is 67, one will be able to have low drug costs that are under 
the $2,000 threshold, or I think the President's threshold increases 
over time. But still there is always a cap on it.
  Now one day, one can come down with some terrible disease, and go to 
the doctor, and the doctor says, Guess what, the good news is there is 
a drug that will solve your problem and keep you alive for another, you 
know, another 5 or 10 years. But the bad news is it costs $10,000 or 
$20,000. Well, that senior suddenly has exposure to a risk that there 
was no way that he or she could have planned for.
  So what we provide with our plan is the peace of mind, the peace of 
mind of knowing, no matter how expensive your prescription is, no 
matter whether you are on one drug or 10 or 15, you will be covered. 
The sky is the limit on one's coverage because that is where our plan 
comes in for everyone. Every American pays all of their costs above 
that ceiling.
  Mr. McCRERY. That is right, Mr. Speaker. I want to be honest here. We 
have come up with a conceptional plan that does the things that the 
gentleman from Pennsylvania and I have talked about.
  We have not had the numbers crunched by the Congressional Budget 
Office. That is in the process of being done. We have worked with some 
actuaries who think we can do what we have described within the 
budgetary confines that we are working in, which is $40 billion over 5 
years. But we do not know yet to what extent we can protect those 
seniors from those high costs. We have to wait until we get those 
numbers from the CBO.
  But I believe that any plan that we include in Medicare ought to 
provide not only a basic benefit for low-income seniors and other 
seniors but also must include a stop-loss provision which protects that 
senior citizen from skyrocketing out-of-pocket costs that could bleed 
his lifetime savings. So we have got to wait and see what the numbers 
show.
  But I think, from a conceptional standpoint, we ought to agree that 
we are going to provide a basic benefit which both our plan and the 
President's plan does, and that is protection against those very, very 
high drug costs. If it ends up costing more, then we have got to figure 
out a way to finance that.
  But from a conceptional standpoint, I think any drug benefit that we 
include must have those two elements, a basic benefit for everybody, 
including low-income seniors and protection against those 
extraordinarily high drug costs that some seniors, a few seniors run 
into.
  Mr. GREENWOOD. Mr. Speaker, as the gentleman from Louisiana talked 
about, the fundamental goal is to provide coverage for everyone. What 
has been discouraging and frustrating to me is that we have crafted 
this plan so that it benefits everyone regardless of income. If one is 
at the lowest end of the scale, we cover 100 percent of one's premiums. 
We think we can go up to 150 percent of poverty and cover that. The 
President's rhetoric and language has suggested that that is all we do, 
that we are only providing a benefit for the really poor; and it is 
really not the case.
  Mr. McCRERY. That is not the case, Mr. Speaker.
  Mr. GREENWOOD. Mr. Speaker, the mechanism that we use by stopping the 
loss for everyone is what makes the premium affordable. Maybe the 
gentleman from Louisiana could share his thoughts on that as well, 
because that is so important to get straight with the American people.
  Mr. McCRERY. Mr. Speaker, it is fairly easy to explain, but not 
easily understood. Let me take a shot at it. It is really different 
from a stop-loss provision that I have talked about for an individual 
senior. That is a stop the loss out of his pocket.
  What the gentleman from Pennsylvania is talking about is the Federal 
Government telling the insurance industry we will stop your losses for 
any seniors in, say, the top 2\1/2\ percent of expenditures for drugs. 
We know that that top 2\1/2\ percent of seniors in terms of their drug 
cost constitutes about 25 percent of the total drug expenditures for 
the senior population.
  So if we give the insurance industry some reinsurance protection, so 
to speak, against those extraordinarily high-cost seniors, then they 
will be able to write a product, produce a product in the marketplace 
at a premium that will be substantially lower, perhaps as much as 25 
percent lower than they could if we gave them no protection in a 
reinsurance way against those extraordinarily high-cost seniors.

                              {time}  1730

  So the gentleman is exactly right. By basically buying down the tail 
of those high cost seniors for the insurance industry, we allow them to 
write a product that is fairly predictable in terms of their cost, and 
we allow them to write those products at a premium that would be 
substantially lower than they could if we gave them no such stop-loss 
protection for the insurance industry.
  Mr. GREENWOOD. And since Americans are not used to buying drug-
benefit insurance, this is a little alien to them. But if we think 
about buying automobile insurance, if we went to buy automobile 
insurance that would provide liability coverage for $10 million, that 
would be expensive. The premium that we would pay on a monthly basis or 
annual basis would be quite expensive to get that coverage. And if it 
were unlimited, if we had unlimited liability protection, of course it 
would be unaffordable and the insurance industry would have a hard time 
putting a price on that.
  That is almost the way it is with prescription drugs now, because we 
cannot

[[Page H2493]]

predict the exposure with these new modern expensive drugs. So what we 
are saying here is, if it was automobile insurance and the Federal 
Government said we will cover everything over, let us say $50,000 of 
liability, then we know that the premium is going to go way down and we 
would have the coverage covered by the Federal Government. It is the 
same thing here. By the Federal Government, by our House Republican 
plan proposing to pay for that top, from the cap to the sky being the 
limit, suddenly now we have an affordable product that every American 
can afford to purchase.
  Mr. McCRERY. That cap that the gentleman is talking about, though, is 
an after-the-fact determination according to the actual costs in the 
industry. So at the end of a year, what we do is we go back and look at 
the cost for drugs for all seniors, and then we determine above what 
level constitutes the top 2.5 percent of expenditures. It might be 
$10,000; it might be $12,000; it might be $15,000; it might be $7,000. 
Somewhere, though, we will reach a point where all expenditures above 
that by all seniors constitutes the top 2.5 percent of expenditures.
  So a plan knows very quickly how many seniors it has with 
expenditures over that $10,000 level or $12,000 level. They report that 
to the Federal Government. The Federal Government ships them a check 
basically for those seniors and the costs for those seniors above that 
level. It is doable. It is kind of an after-the-fact risk adjustment 
that we can do, and we are hopeful that the insurance industry will be 
comfortable with that kind of risk adjustment mechanism and will write 
products in the marketplace that will give seniors a choice of products 
and give the basic benefits that we have talked about.
  Mr. GREENWOOD. And when this plan is enacted into law, as we hope 
that it will be this year, the average middle-class American who does 
not have a prescription plan now, who has one next year because of this 
program, will wonder, okay, so what was in this for me? What did I get 
out of this? They will know what they got out of this when they go to 
write their check for their insurance to cover their prescription plan. 
That check will be a heck of a lot smaller. The amount they have to 
write that check for will be very small compared to what it would be if 
we had not decided to cover this top end of the exposure.
  Mr. McCRERY. I agree. And I thank the gentleman for allowing me to 
participate in the discussion on the prescription drug plan for 
seniors.
  Our good friend and colleague, the gentleman from California (Mr. 
Thomas), the chairman of the Subcommittee on Health of the Committee on 
Ways and Means, has joined us. So with the gentleman's permission, I am 
going to go back to my other health care meeting and turn it over to 
the gentleman from California.
  Mr. GREENWOOD. By all means. I thank the gentleman for his 
participation and would now yield to the gentleman from California, who 
is, in my mind, the leader on this issue in the House of 
Representatives, and has been leading us for a number of years now.
  Mr. THOMAS. I thank the gentleman very much, one, for taking the time 
and, two, for beginning to get into the details.
  This does become somewhat complex for most people, but the key point 
that we need to have everyone understand is that if we were discussing, 
as the gentleman indicated, automobile insurance or homeowner 
insurance, and we peeled back what most people know about the insurance 
business, it is pooled risk. And it would get into exactly the same 
kind of discussion that we are getting into here.
  One of the reasons that we are doing it is to create a comfort level, 
I believe, notwithstanding all the details, that what we are trying to 
do is to create a product that takes care of the real concerns of 
seniors. It is not the first dollar that we spend on 
prescription drugs; it is that last dollar. And we do not know when it 
is and we do not know how much it is going to be. That is what 
insurance is all about: pooling the risk in a way that everyone can 
afford to protect themselves against that last dollar, no matter how 
much it is going to be. And that is what we are trying to create.

  There are others, for example the President, who said let us just set 
up a prepayment plan. Everyone will know how much they are going to 
get. And he has a plan that eventually gets to like $5,000; but it is 
$2,000, and that is all anyone is going to get no matter what their 
costs are. That is better than what we have today. There is no question 
it is better than what we have today. But if we are going to put a plan 
in place, I think the gentleman and myself and others who have been 
working on this agree, including Democrats who have been working with 
us, is let us try to do this the best we can.
  The way we really need to deal with prescription drug cost is to take 
care of the low income and create a risk structure that allows the 
private sector to write the product. Now, why in the world are we 
always saying let us get the private sector into this process? It is 
very simple. If we take a look at prescription drug insurance today, 
there is value brought by those people who are managing the 
prescription drug programs. It is so specialized that even people who 
offer ordinary health care, and if they include prescription drugs, 
will hire these people to run their prescription drug portion.
  One, taking drugs, especially taking more than one drug, becomes 
risky business if there are not knowledgeable pharmacists and others to 
help in the management of taking those drugs. Sometimes drugs that 
would be lifesaving are not worth very much if we only participate in a 
portion of the regimen; if we leave pills in the bottles; if we do not 
follow the directions; if we do not take them in a timely fashion. 
Seniors are one of the groups that have the least support of any group 
in assisting in taking drugs. This is one of the real value-added 
features brought by one of these programs.
  We keep talking dollars and cents. Dollars and cents is important, 
but availability, deliverability and proper usability of drugs is very, 
very critical. That just comes as a kind of a free aspect of putting 
this kind of a plan in place.
  The other thing that we have to remember is that seniors have been 
very knowledgeable in this whole process. I have become quite enamored 
with their ability to realize that when someone promises something for 
nothing, they know they cannot get something for nothing. And what we 
are trying to do is put a plan in place that will assist those who, 
through no fault of their own, do not have the wherewithal to pay for 
it; and those seniors who, through no fault of their own, cannot afford 
the enormously high cost of the drugs that happen to meet their 
particular health needs. And for those who would like to have the 
protection, whether or not they fall into one of those other groups, to 
be able to participate in a minimally reasonable fashion, I think, is a 
proposition that most seniors would be interested in.
  I know that the idea is enormously popular to promise people that 
they will not be involved financially and they will not be involved 
administratively or behaviorally. But, frankly, I think the seniors 
have been appreciative of our open approach, which says all parts of 
the society are at fault and all parts of the society are the solution. 
The pharmaceutical industry is part of the problem, and they are also 
part of the solution. The insurance industry, the same. Members of 
Congress, the same. The children of our seniors, the same. And, of 
course, the seniors themselves.
  It has to be a positive, cooperative effort that builds a plan that 
not only works today but, more importantly, 5 and 10 years from now 
when those biotech drugs come on the line that are more expensive and, 
through no fault of our own, the cost is something we could not handle. 
There must be an insurance product available for seniors. More 
importantly, not that it is just available, but that we have created a 
system that allowed us to get into it at a time when the costs were 
reasonable, where now that they are not reasonable that we are covered. 
It is simply something that needs to be done.
  I appreciate the gentleman taking the time not just to talk about 
prescription drugs, because we are focusing on that as a new addition 
to Medicare, paid for, by the way, and I do not think we say this often 
enough because people do not realize it, the $40 billion that the 
Republican leadership has laid on the table to cover the prescription

[[Page H2494]]

drug and the modernization cost for the next 5 years is money that we 
have saved from the Medicare program. We are not taking it from 
taxpayers. We are not robbing current programs that need money to pay 
for this. And we are not simply saying that it is a revenue-neutral 
game and that if we pay money for drugs it is coming out of hospitals 
or doctors or some other health care costs.
  It is money that was saved because of the changes in the program that 
we have put in place that we are reinvesting. The leadership has said 
let us put this money back into Medicare that we saved from Medicare, 
but let us put it back in in a new way in which we get an even better 
benefit out of the dollars that we have spent. And to that end, part of 
the other program that we are advocating is that as we add prescription 
drugs, we do not just tack it on to a system that now says we get drugs 
and we get health care.
  Because the way medicine is delivered today, as the gentleman well 
knows, and those of us who have looked at it for some time, and 
especially those seniors who have participated in the health system, 
drugs and old-fashioned, as we say, health care have merged. We cannot 
deliver health care today without, as I say, an integrated approach 
with prescription drugs.
  So as importantly, in my opinion, as adding prescription drugs to 
Medicare is the extra care and attention we are trying to provide to 
creating a system that integrates this new benefit in with the other 
benefits that are defined and guaranteed in the Medicare program in 
such a way that seniors are now going to receive health care just the 
way the rest of the society receives health care. Frankly, they are a 
decade or more behind because we do not have this integrated 
prescription drug aspect to seniors' Medicare health care. It is 
overdue. It needs to be put into effect, and it needs to be integrated. 
And that is what we are trying to do.
  Mr. GREENWOOD. I think what is important, as we compare the 
President's plan to the House Republican plan to other plans that may 
be in the Senate and elsewhere, what is important to understand is that 
there are some similarities. The low-income folks in both plans would 
have no cost and would have access, for the first time many of them, to 
a prescription drug plan.
  Mr. THOMAS. If the gentleman will yield, not only are they similar 
but they are identical. No one should say that the President's plan or 
our plan treats low income differently, because we treat them exactly 
the same. They get complete coverage.
  Mr. GREENWOOD. That is a very good point. And then for every one of 
the elderly and the disabled above that 150 percent of poverty, under 
both plans there will be out-of-pocket expenses. Under both plans, 
whether paying for a premium in our case, or whether paying 50 percent 
of the cost of every drug, there is cost out of pocket. So the middle 
class and above will have to pay something for their prescription plan.
  We have two systems by which we try to figure out how to make that 
most manageable, most affordable, most flexible, and to provide the 
most security at the end of the day from catastrophic, potentially 
ruinous costs, where someone would have to choose between literally 
selling their home to buy the medicine they need or doing without and 
having their life foreshortened as a result.
  In the course of this debate, in fact in the course of this last 
almost hour here, I think my colleagues and I have been very careful. 
Not once have we questioned the motives of the President or the motives 
of the other party. We have started with the assumption that every 
Member of Congress in the House and the Senate, that the President and 
the Congress have the same goal, to provide affordable health care. 
What I think the public needs to watch for and be most critical of is 
not the fact that we have differences of opinion and not be judgmental 
about a Member who takes this tack or that tack, but rather be 
judgmental about Members of Congress or other politicians or the 
President, to the extent that he does it, when they begin to question 
the motives of the other party. Because if we avoid that, we will get 
this job done.
  Certainly the President has some ideas that are worthy of our 
consideration and we have some worthy of his. And certainly if we are 
going to get this done, at some point in the process there is going to 
be an amalgamation of the President's best ideas and our best ideas, 
and we ought to be able to learn from each other.

                              {time}  1745

  Mr. THOMAS. Mr. Speaker, the gentleman makes an excellent point. 
Because, as everyone knows, we can take a fixed amount of money and 
spend it a number of different ways. And, in essence, that is what we 
do. The amount that we lay out for prescription drugs is about the same 
amount roughly as the President. But their goal was to achieve a 
slightly different payment balance.
  We place the emphasis on low income as the President does, but we 
talk about making sure that those out-of-pocket payments that are 
unexpected and too high to pay for fall under an insurance umbrella on 
shared risk.
  The President has chosen to take a bit more of that subsidy and some 
of the earlier basic costs to create, which I think, in fairness, we 
could say one size fits some because those who have the very high cost 
would not be served by that system, but that there is a consequence in 
the way we write the program. And it is entirely possible that, for the 
middle-income person who is not low income and who does not have the 
extra high drug costs at that moment in time they occupy that position, 
they may in fact be paying more than they would under the President's 
plan for roughly the same support.
  But most of us know and the seniors certainly do, at some time or 
other over the course of the rest of their lives they are going to fall 
into the category where they are going to get expenses for drugs, 
hopefully on a temporary basis, that they cannot afford to pay. That is 
what we are trying to protect against.
  We believe it can be done today. Not 5 years from now, not 7 years 
from now, not 8 years from now, but today.
  So our discussion, as my colleague points out, will quite rightly be 
how do we best construct a program to meet the most important and 
dangerous concerns that seniors face; and that will be, hopefully, the 
policy discussion that we are engaged in.
  My colleague is quite rightly proud of the product that we are moving 
forward. My goal, frankly, in the next several days is to be able to 
stop using the phrase ``the Republican plan.''
  I have engaged in a number of discussions with Democrats both here in 
the House and in the Senate. Some of them I think could be described 
honestly as excited about the idea once they understand the policy 
direction that we are trying to go, not only excited but supportive 
about it and will be able to talk about the bipartisan plan that the 
Congress is moving forward as a legitimate contender, one we believe 
most appropriate to meet seniors' needs and that we will be dealing 
with this on a policy level and not a political level.
  I thank the gentleman from Pennsylvania (Mr. Greenwood) for taking 
the time and for allowing me to participate.
  Mr. GREENWOOD. Mr. Speaker, reclaiming my time, I thank the gentleman 
from California (Mr. Thomas) for his participation and his leadership, 
as usual.
  The experience that I had not too long ago was I visited a senior 
center and asked a group of my elderly constituents whether they had or 
had not coverage and what their experiences were.
  I met a woman who told me that she was taking 18 different 
prescription drugs and that she was working three jobs in order to pay 
for those drugs because she had no coverage. And at the end of the day 
the question for those Americans is not is this a Republican plan, is 
this a Democratic plan, is this the President's plan, is this the 
Congress's plan, but the question at the end of the day is can the 
Republicans and the Democrats in the House and the Senate and the 
Congress and the President figure out how to solve this problem so we 
do not have a single elderly person in America, not a single disabled 
person in America having to make that awful choice between their health 
and their finances so that they do not get to the point where they have 
to say to a doctor, do not bother writing that prescription for me 
because I

[[Page H2495]]

cannot afford to pay it, or taking a prescription home and not being 
able to take all of the pills that they need to take in a given day and 
not being able to renew that prescription because of their inability to 
afford it.
  I am convinced that, at the end of the day, Republicans and Democrats 
will join together on this, we will negotiate a bill with the President 
and it will mark the point in our history, the history of Medicare, of 
which we all can be proud.
  Mr. Speaker, I yield to the gentleman from Kentucky (Mr. Fletcher). I 
am glad to have him here to join. He has been a real leader in this 
issue, as well, and I am glad to have his participation.
  Mr. FLETCHER. Mr. Speaker, we just came from a meeting, but I did 
want to get in at the few minutes left and certainly participate. We 
have got 1 minute remaining it looks like.
  First of all, I think it is very important and I am very encouraged 
by this plan. I think it is essential. Health care without prescription 
drugs in this modern age is really not health care.
  I give my colleagues an illustration. In assisted living, I was 
visiting with some seniors who talked about a gentleman living there. 
For the first half of the month, he was a perfect gentleman. The last 
half of the month, he was a tyrant in the place. The problem was he 
could only afford the first half of the month's prescription drugs.
  We see a number of seniors like this. So I think it is very important 
we put $40 million aside versus the President's $28 billion over the 5 
years. His does not start for 3 years. We are toward the target at 
making sure it is affordable, available, and optional. So I think it is 
an outstanding plan that targets those that really need it and it is 
essential.
  Again, health care without prescription drugs is really not health 
care in this day and age with the way prevention and chronic disease 
management has become the major portion of health care versus acute 
care, which we had back when Medicare was first developed.
  So I wanted to come and just certainly say I think, hopefully, we can 
get good bipartisan support. We did in a bill that I filed back last 
year, we got bipartisan support, which is very similar in concept. So I 
am very encouraged by this and look forward to us being able to get 
something done. There are a number of seniors out there that need this 
and it is going to be very important for their health and future.
  Mr. GREENWOOD. Mr. Speaker, the gentleman from Kentucky (Mr. 
Fletcher) is one of the few physicians in America who has chosen to 
leave his practice behind temporarily and come to serve in Congress. 
His leadership is greatly appreciated.

                          ____________________