[Congressional Record Volume 146, Number 57 (Wednesday, May 10, 2000)]
[Senate]
[Pages S3832-S3850]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Ms. COLLINS (for herself, Mr. Feingold, Mrs. Murray, Mr. 
        Abraham, Mr. Wellstone, Mr. Hutchinson, Mr. Dorgan, Mr. Grams, 
        Mr. Bingaman, Mr. L. Chafee, Mr. Enzi, and Ms. Snowe):
  S. 2528. A bill to provide funds for the purchase of automatic 
external defibrillators and the training of individuals in advanced 
cardiac life support; to the Committee on Health, Education, Labor, and 
Pensions.


                 rural access to emergency devices act

  Ms. COLLINS. Mr. President, today I am pleased to join my friend from 
Wisconsin, Senator Feingold, in introducing the Rural Access to 
Emergency Devices Act of 2000, which is intended to improve access to 
automated external defibrillators in small communities to boost the 
survival rates of individuals who suffer cardiac arrest.
  We are very pleased to be joined in introducing this legislation by 
the following cosponsors: Senators Murray, Abraham, Wellstone, 
Hutchinson, Dorgan, Grams, Bingaman, Chafee and Enzi.
  Heart disease is the leading cause of death both in the State of 
Maine and nationwide. According to the American Heart Association, an 
estimated 250,000 Americans die each year from cardiac arrest. Many of 
these deaths could be prevented if AEDs were more accessible. AEDs are 
computerized devices that can shock a heart back into the normal rhythm 
and restore life to a cardiac arrest victim. They must, however, be 
used promptly. For every minute that passes before a victim's normal 
heart rhythm is restored, his or her chance of survival falls by as 
much as 10 percent.
  We have a number of new and improved technologies in our arsenal of 
weapons to fight heart disease, including a new generation of small, 
easy-to-use AEDs that can strengthen the chances of survival. These new 
devices make it possible not only for emergency medical personnel, but 
also trained lay rescuers, to deliver defibrillation safely and 
effectively. The new AEDs are safe, effective, lightweight, low 
maintenance, and relatively inexpensive. Moreover, they are 
specifically designed so they can be used by nonmedical personnel, such 
as police, firefighters, security guards, and other lay rescuers, 
providing they have been trained properly.
  According to the American Heart Association, making AEDs standard 
equipment in police cars, firetrucks--as I know the Presiding Officer 
has done in his hometown--ambulances, and other emergency vehicles, and 
getting these devices into more public places could save more than 
50,000 lives a year.
  Last December, the Bangor Mall installed an AED that is one of the 
first of these devices in Maine to be placed in a public setting 
outside the direct control of emergency medical personnel and hospital 
staff. Both the AED and an oxygen tank are kept inside a customer 
service booth, which is in an area of the mall where there is a high 
concentration of traffic and where heart emergencies might occur. Mall 
personnel have also received special training and, during mall hours, 
there is always at least one person who has been certified in both CPR 
and defibrillator use.
  For at least one Bangor woman, this has been a lifesaver. On January 
12th, just weeks after the AED was installed, two shoppers at the Mall 
collapsed in a single day. One was given oxygen and quickly revived. 
But the other shopper was unconscious and had stopped breathing. The 
trained mall staff--Maintenance Supervisor Larry Lee, Security Chief 
Dusty Rhodes, and General Manager Roy Daigle--were only able to detect 
a faint pulse. They quickly commenced CPR and attached the AED.
  It is important to note that defibrillation is intended to 
supplement, not replace standard CPR. These devices, which are almost 
completely automated, run frequent self-diagnostics and will not allow 
the administration of shock unless the victim's recorded heart pattern 
requires it. When the AED is attached, it automatically analyzes the 
victim's vital signs. One of two commands will then be voiced and 
displayed by the unit: ``Shock advised--charging''; or ``Shock not 
advised--continue CPR.''
  In the Bangor Mall case, the shock was not advised, so CPR was 
continued until the emergency medical personnel arrived. The EMT's told 
Mr. Daigle, the General Manager of the mall, that the woman--who had 
had a heart attack and subsequently required triple by-pass surgery--
simply would not have survived if they had not been so prepared. As Mr. 
Daigle observed, ``Twelve to fifteen minutes is just too long to wait 
for the emergency services to arrive.''
  Cities across America have begun to recognize the value of fast 
access to AEDs and are making them available to emergency responders. 
In many small and rural communities, however, limited budgets and the 
fact that so many rely on volunteer organizations for emergency 
services can make acquisition and appropriate training in the use of 
these life-saving devices problematic.
  The legislation that Senator Feingold and I are introducing today is 
intended to increase access to AEDs and trained local responders for 
smaller towns and rural areas in Maine and elsewhere where those first 
on the scene may not be paramedics or others who would normally have 
AEDs. Our bill provides $25 million over three years, to be given as 
grants to community partnerships consisting of local emergency 
responders, police and fire departments, hospitals, and other community 
organizations. This money could then be used to help purchase AEDs and 
train potential responders in their use, as well as in basic CPR and 
first aid.
  I commend the leadership of the Senator from Wisconsin for coming 
forth with this idea. I am very pleased to join him in introducing this 
important legislation.
  The Rural Access to Emergency Devices Act has been endorsed by both 
the American Heart Association and the American Red Cross as a means of 
expanding access to these lifesaving devices across rural America. I 
urge all of our colleagues to join us as cosponsors of the bill.
  I ask unanimous consent that letters of support from both the 
American Heart Association and their Maine affiliate be printed in the 
Record.
  There being no objection, the letters were ordered to be printed in 
the Record, as follows:

                                   American Heart Association,

                                         Augusta, ME, May 3, 2000.
     Hon. Susan M. Collins,
     U.S. Senate, Russell Senate Office Building, Washington, DC.
       Dear Senator Collins: The State Advocacy Committee of the 
     American Heart Association in Maine commends you for your 
     leadership in sponsoring the ``Rural Access to Emergency 
     Devices (AED) Act.'' As volunteer advocates for the American 
     Heart Association, we are pleased that you have recognized 
     that the placement of AEDs with trained, local, first 
     responders, such as fire and rescue departments, paramedics, 
     police departments and community hospitals in rural areas 
     will make a difference in a person's chances of surviving a 
     sudden cardiac arrest. We are also proud that this bill is 
     being sponsored by a Maine Senator.
       Heart disease is the leading cause of death in the state of 
     Maine, as well as the nation. Early defibrillation is the 
     only known therapy for most cardiac arrests. Each minute of

[[Page S3833]]

     delay in returning the heart to its normal pattern of beating 
     decreases the chance of survival by 7% to 10%. As you well 
     know, Maine's population is dispersed over a large 
     geographical, mostly rural, area. The Emergency Medical 
     Services in our state are excellent, but travel times within 
     rural communities can occasionally be too long to benefit the 
     patient in cardiac arrest. The availability of AEDs and 
     trained local responders should improve the chain of survival 
     for these victims of sudden cardiac arrest. The American 
     Heart Association estimates that the sudden cardiac arrest 
     survival rate can improve from only 5% to 20% when AEDs and 
     trained rescuers are readily available within communities.
       Thank you, Senator Collins, on behalf of the residents of 
     Maine and our fellow citizens in other rural states.
           Sincerely yours,
                                           Gayle Russell, RN, BSN,
     Chair, Maine State Advocacy Committee.
                                  ____



                                   American Heart Association,

                                   Washington, DC, April 27, 2000.
     Hon. Susan Collins,
     Hon. Russell Feingold,
     U.S. Senate,
     Washington, DC.
       Dear Senators Collins and Feingold: The American Heart 
     Association applauds your commitment to saving lives and 
     thanks you for your introduction of the ``Rural Access to 
     Emergency Devices (AED) Act.'' The legislation will help 
     improve cardiac arrest survival rates across rural America.
       As you know, heart disease is the leading cause of death in 
     this country. Cardiac arrest, whereby the electrical rhythms 
     of the heart malfunction, causes the sudden death of more 
     than 250,000 people every year. We are fighting this killer 
     with improved technology, including automated external 
     defibrillators (AEDs). These small, easy-to-use devices can 
     shock a heart back into normal rhythm and restore life to a 
     cardiac arrest victim. But, they must be used promptly. We 
     have to act quickly because for every minute that passes 
     before a victim's normal heart rhythm is restored, his or her 
     chance of survival falls by as much as 10 percent.
       Cities across America have begun to recognize the value of 
     fast access to these devices and are making them available to 
     emergency responders. The Rural AED Act recognizes that we 
     cannot and should not leave rural communities behind in this 
     fight to improve survival. Because the first emergency 
     responders on the scene of a cardiac arrest may not always be 
     the medical responders, the Rural AED Act makes resources 
     available to rural communities to purchase AEDs for police 
     and fire as well as emergency responder vehicles. In 
     addition, it provides resources to train these responders in 
     the use of the devices. The bill provides $25 million for 
     this effort to expand access to devices that can save lives 
     across rural America.
       The American Heart Association thanks you for your 
     leadership in the fight against heart disease and looks 
     forward to working with you to ensure the passage of this 
     important legislation.
           Sincerely,
                                       Lynn A. Smaha, M.D., Ph.D.,
                                                        President.

  The PRESIDING OFFICER. The Senator from Wisconsin.
  Mr. FEINGOLD. Thank you, Mr. President.
  Let me first thank the managers for allowing us the opportunity to 
introduce our bill at this time. I especially thank my friend, the 
Senator from Maine, for taking the lead on this issue with me. She is a 
very effective Senator on many issues, and is specially effective, I 
think, when it comes to the concerns of rural people in Maine and 
throughout the country about an issue which is incredibly important--
first aid.
  I also thank the Presiding Officer, the junior Senator from Rhode 
Island, for joining us and cosponsoring the bill.
  I rise today with Senator Collins to introduce the Rural Access to 
Emergency Devices Act. This legislation provides a first step to 
helping save the lives of the more than 250,000 people who die each 
year from sudden cardiac arrest.
  Every two minutes, someone in America falls into sudden cardiac 
arrest--a medical emergency in which the heart's rhythm becomes so 
erratic it can not pump blood to the brain and other vital organs.
  According to the American Heart Association, over 250,000 Americans 
die each year from sudden cardiac arrest. That is 700 deaths each day--
a startlingly large number. Overall heart disease kills more Americans 
than AIDS, cancer, and diabetes combined.
  In my home state of Wisconsin, as in many other states, heart disease 
is the number one killer. Ninety-five sudden deaths from cardiac arrest 
occur each day in Wisconsin.
  These numbers are disturbing by any measure, but they are especially 
troubling because they don't need to be this high. By taking some 
relatively simple steps, we can give victims of cardiac arrest a better 
chance of survival, particularly in rural areas. Cardiac arrest victims 
are in a race against time, and today I'm introducing a bill to 
increase access to defibrillators, that are essential to reviving 
cardiac arrest victims.
  Cardiac arrest strikes its unwilling victims with no warnings or 
indications. In most cases it's all but impossible to predict who will 
have a sudden cardiac arrest, or where and when it will happen.
  Cardiac arrest can strike anyone. When cardiac arrest occurs, the 
victim loses consciousness, has no pulse and stops breathing normally. 
Death often occurs within minutes.
  Cardiac arrest does not discriminate against age, gender, or race. A 
recent issue of Women's Day magazine detailed a number of cases in 
which a variety of people suffered from cardiac arrest.
  The article tells about a 24-year-old woman, a writer for a Seattle 
comedy show, who suffered from cardiac arrest after watching her 
favorite television show. Another victim was a 48-year-old women who 
was out for a birthday dinner with her husband and friend. Yet another 
individual, only 31 years of age, suffered cardiac arrest at his 
computer programing job in Minnesota.

  What these victims have in common is that all three survived. Each 
was saved because a properly trained person was there with an automated 
external defibrillator (AED). These life saving machines are compact, 
portable, battery-operated versions of the machines that were 
traditionally only in the hands of emergency medical personnel.
  Wisconsin's Emergency Medical Services are some of the finest in the 
country. They are effectively trained to identify victims and determine 
when a shock is needed. There are countless stories of quick EMS 
responses that have saved so many lives.
  Unfortunately, for those in many rural areas, Emergency Medical 
Services have simply too far to go to reach people in need and time 
runs out for victims of cardiac arrest. It's simply not possible to 
have EMS units next to every farm and small town across the nation.
  Fortunately, recent technological advances have made the newest 
generation of AEDs inexpensive--approximately $3,000--and simple to 
operate. Because of these advancements in AED technology, it is now 
practical to train and equip fire department personnel, police 
officers, and other community organizations--and that's exactly what 
this legislation would do.
  But let me be clear, I think they are only one part of the so-called 
chain of survival.
  This chart indicates the four crucial aspects of the chain of 
survival, which is a proven method to save lives.
  The first link in the chain is simple: it is vitally important that 
cardiac arrest victims have early access to care. When someone suffers 
from cardiac arrest, it's crucial that bystanders dial 911 to dispatch 
the appropriate emergency personnel to the scene.
  The next link is early CPR--if performed properly, it will at least 
buy a few minutes to perform defibrillation. Let me be clear though, 
effective CPR does not replace defibrillation in saving lives.
  The critical link in the chain of survival for victims of cardiac 
arrest is early defibrillation. Mr. President, each minute of the delay 
in returning the heart to its normal pattern of beating decreases the 
chance of survival by 10 percent.
  The final link in the chain is early access to advanced care--it is 
literally of vital significance. Even after successful defibrillation, 
many patients require more advanced treatment on the way to the 
hospital.
  By passing this legislation, and increasing access to defibrillators, 
we have the chance to strengthen the more important link in the chain 
of survival.
  Communities across America are in dire need of better access to 
defibrillators. Making AEDs widely available so that trained laypeople 
can use them to administer shocks to cardiac arrest victims will go a 
long way toward saving lives.
  In fact, the American Heart Association estimates that over 50,000 
lives could be saved each year if AEDs were more readily accessible.

[[Page S3834]]

  This next chart illustrates a startling statistic I mentioned a 
moment ago--for every minute that passes a cardiac arrest victim is 
defibrillated, the chance of survival falls by as much as 10 percent. 
After only eight minutes, the victims survival rate drops 60 percent.
  Our legislation, the Access to Emergency Devices Act of 2000 takes a 
common sense approach to strengthen this chain of survival. This 
legislation provides $25 million to expand access to devices that can 
save lives across rural America.
  It also provides for training grants to give people the training they 
need to learn how to operate defibrillators.
  And I have learned that training is very important, but also that 
nearly anyone can be taught to make proper use of a defibrillator.
  Cities across America have begun to recognize the value of fast 
access to defibrillators and are making them available to emergency 
responders. This legislation recognizes that rural communities should 
have the same chance to improve cardiac arrest survival rates.
  Because the first emergency responders on the scene of a cardiac 
arrest may not always be the medical responders, our legislation makes 
resources available to rural communities to purchase AEDs for police 
and fire as well as emergency response vehicles--and our bill also 
provides funds for the training that will sustain the lifesaving effect 
of these grants.
  Cardiac arrest can be a killer. But if we give people in rural 
communities a chance, they may be able to stop a cardiac arrest before 
it takes another life. Our bill is a simple and effective way to 
increase the availability of defibrillators, and give rural victims of 
cardiac arrest a better chance of survival, and I look forward to 
working with my colleagues to pass this legislation.
  I yield the floor.
                                 ______
                                 
      By Mr. JEFFORDS (for himself, Mr. Allard, Mr. Bingaman, Mr. 
        Kennedy, and Mr. Leahy):
  S. 2537. A bill to amend title 10, United States Code, to modify the 
time for use by members of the Selected Reserve of entitlement to 
certain educational assistance; to the Committee on Armed Services.


                national guard and reserve education act

 Mr. JEFFORDS. Mr. President, I strongly believe we owe it to 
Americans to provide them the best educational opportunities. And as a 
Navy veteran, I feel we owe our military greater access to education by 
providing maximum flexibility to use the educational benefits they've 
been promised. Today, on behalf of Senators Allard, Bingaman, Kennedy, 
Leahy, and myself, I am introducing legislation that will provide more 
time for our National Guard and Reserves to utilize their current 
education benefits.
  Education benefits have proven to be one of the more important 
benefits offered by the U.S. military, both in terms of recruiting and 
retention, and as a means of upgrading the educational levels of our 
existing force. Currently, members of our uniformed services receive 
education assistance primarily through the successful Montgomery GI 
bill.
  While the Montgomery GI bill goes a long way toward helping to 
further the education of our hardworking men and women serving in the 
uniformed services, there is an important gap in the number of years 
they have to utilize these benefits. While active duty personnel are 
provided education benefits for up to ten years after they separate 
from active duty, National Guard and Reserve personnel are only 
entitled to these benefits for the first ten years of their service and 
not after they leave the service. Since our active duty servicemembers 
currently have up to ten years after they separate from active duty, 
they are eligible to utilize their education assistance for up to 
thirty years (twenty years service plus ten). Our National Guard and 
Reserve servicemembers' benefits currently end ten years from the date 
they complete basic training.
  The legislation I am introducing today would allow our National Guard 
and Reserves to use their Montgomery GI bill education benefits for the 
entire time they serve in the Selected Reserve. We are not asking for 
more benefits, just greater flexibility in the servicemembers' choice 
of when to use the education benefits that are already approved for 
them.
  In addition, the Selected Reserve members who become disabled are 
currently allowed to use the GI bill education benefits only during the 
first ten years of service, regardless of what year they become 
disabled. For example, if a servicemember becomes disabled during the 
first two years of service, he has eight more years of education 
assistance eligibility. But if he becomes disabled after nine years of 
service, he would have one year of eligibility left. After ten years of 
service, the National Guard and Reserve have no education benefits if 
they become disabled.
  This legislation would allow any unused portion of their 36 months of 
GI bill educational assistance to be utilized through the later of the 
original ten-year period of eligibility or a four-year period beginning 
on the date the person is involuntarily separated from the Selected 
Reserve. This adjustment also pertains to servicemembers whose unit is 
inactivated during a force drawdown if they have any unused months of 
educational assistance remaining.
  As we have seen, our National Guard and Reserve continue to be tasked 
more and more as our nation calls on them to support missions around 
the world. The Selected Reserve makes up almost half of our Uniformed 
Services today. They, too, leave their families behind to meet the call 
of serving our nation. In addition, they leave their full-time 
employers for months on end to perform their `part-time' jobs. This 
makes it even more difficult for them to take advantage of employer-
provided opportunities to further their education. How can we continue 
to expect them to utilize their current Montgomery GI bill benefits 
within the current time limitations while being tasked to work two 
jobs, maintain a family and deploy overseas on short notice? They've 
earned the right to have an equitable amoun6t of time to utilize their 
Montgomery GI bill educational assistance. This is the right thing to 
do. I hope my colleague will join me in cosponsoring this legislation.
  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. 2537

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

     SECTION 1. MODIFICATION OF TIME FOR USE BY CERTAIN MEMBERS OF 
                   THE SELECTED RESERVE OF ENTITLEMENT TO 
                   EDUCATIONAL ASSISTANCE.

       (a) In General.--Subsection (a) of section 16133 of title 
     10, United States Code, is amended by striking ``(1) at the 
     end'' and all that follows through the end and inserting ``on 
     the date the person is separated from the Selected 
     Reserve.''.
       (b) Certain Members.--Paragraph (1) of subsection (b) of 
     that section is amended in the flush matter following 
     subparagraph (B) by striking ``shall be determined'' and all 
     that follows through the end and inserting ``shall expire on 
     the later of (i) the 10-year period beginning on the date on 
     which such person becomes entitled to educational assistance 
     under this chapter, or (ii) the end of the 4-year period 
     beginning on the date such person is separated from, or 
     ceases to be, a member of the Selected Reserve.''.
       (c) Conforming Amendments.--Subsection (b) of that section 
     is further amended--
       (1) in paragraph (2), by striking ``subsection (a)'' and 
     inserting ``subsections (a) and (b)(1)'';
       (2) in paragraph (3), by striking ``subsection (a)'' and 
     inserting ``subsection (b)(1)''; and
       (3) in paragraph (4)--
       (A) in subparagraph (A), by striking ``subsection (a)'' and 
     inserting ``subsections (a) and (b)(1)''; and
       (B) in subparagraph (B), by striking ``clause (2) of such 
     subsection'' and inserting ``subsection (a)''.
                                 ______
                                 
      By Mr. ROCKEFELLER (for himself, Mr. Robb, and Mr. Durbin):
  S. 2538. A bill to amend the Internal Revenue Code of 1986 to 
maintain retiree health benefits under the Coal Industry Retiree Health 
Benefit Act of 1992; to the Committee on Finance.


          coal miner and widows health protection act of 2000

  Mr. ROCKEFELLER. Mr. President, today I am introducing legislation 
that will maintain the promised health benefits of a small group of 
retired coalminers and their widows--the

[[Page S3835]]

Coalminers and Widows Health Protection Act of 2000. Retired coalminers 
and their widows were promised lifetime health benefits by the 
companies they worked for and by the federal government more than a 
half century ago. This commitment goes back to 1946 when President 
Truman guaranteed miners they would have lifetime health benefits in 
exchange for their return to the mines. The promise was well understood 
in the coalfields, and reiterated in successive coal wage agreements 
throughout the last half century. Congress affirmed that promise when 
it enacted the Coal Industry Retiree Health Benefits Act in 1992 (as 
part of the Energy Policy Act) to protect the health benefits of about 
120,000 retirees and avoid a nationwide coal strike. The Coal Act has 
ensured that a small group of retirees would continue to get the health 
benefits that they earned and were promised for eight years now. There 
are now only about 65,000 miners and retirees remaining in the Fund--
70% of whom are elderly widows of retired miners. Their average age is 
78 years old, and more than 45% of the population is over 80 years old.
  Once again, in this new century, the health care of this small group 
of retired miners and widows is threatened due to both significantly 
increased health care costs and a series of adverse court decisions. 
Congress must act this year to prevent a reduction in their health care 
benefits. Last year, we faced the first shortfall in the trust fund 
that pays for retired miners health benefits, and Congress responded. 
Senator Byrd and Congressman Rahall's leadership forestalled a health 
care benefit cut. They included a stop-gap $68 million in last year's 
final omnibus Appropriations bill to avert a cut. If Congress fails to 
act this year, retired miners and their widows will be in imminent 
danger of losing health benefits as early as next Spring.
  I am glad to report to my colleagues that the Clinton/Gore 
Administration recognized the need to shore up the retired miners' 
health fund and included in its budget a number of provisions that 
together secure miners' benefits well into the next decade. The Coal 
Act related provisions in the President's budget are based on one 
premise--these retired miners were promised lifetime health benefits 
and a promise made must be a promise kept. The Administration strongly 
reaffirmed the federal government's commitment to retired miners and 
their widows by proposing to transfer $346 million in new monies over 
the next ten years to the Combined Benefit Fund to ensure there will be 
no benefit cuts. The Administration's budget also clarified a few 
provisions of the Coal Act to avoid unnecessary litigation about the 
clear meaning of the statute. The Coalminers and Widows Health 
Protection Act does not include all of the Administration's proposed 
solutions for jurisdictional and practical reasons, but I am very 
grateful for their comprehensive solution to maintaining promised 
benefits, and believe each of their proposed remedies deserve serious 
consideration by Congress.
  The Coalminers and Widows Health Protection Act does three things. It 
provides for an annual mandatory transfer of general funds to the 
Combined Benefit Fund to maintain its long term solvency and prevent a 
reduction in miners' health benefits. The annual transfers are set at a 
level to avoid any reduction in benefits and amount to $346 million 
over ten years. This bill also clarifies two aspects of the Coal Act to 
resolve disputed or misunderstood provisions of the law. The first 
clarification involves the timing of Social Security Administration's 
assignment of retired miners to the companies that had employed them 
and promised to finance their lifetime health benefits. The second 
clarification involves assignments to successors-in-interest of coal 
companies that had agreed to finance lifetime health benefits, as well 
as to the successors-in-interest of persons related to those companies, 
which is explicitly provided for in the Act. These clarifications will 
avoid further unneeded litigation expenses. These two clarifications do 
not score for the purposes of determining the cost of enacting them to 
the federal government.
  I want to report to my colleagues that there is a bipartisan, 
bicameral process underway to determine how we can best shore up the 
miners' trust fund. Staff are meeting regularly. Chairman Roth has 
informed me that he is committed to finding a way to preserve these 
promised benefits, and I welcome his strong support, as well as that of 
Senator Moynihan and several other Members of the Finance Committee who 
are actively involved in this process.
  One hundred thousand coalminers were killed while working in the 
mines last century. Nearly another hundred thousand suffered 
debilitating job related illnesses. This bill will give retired miners 
and their widows the health security they were promised and deserve. We 
owe them that security. They earned it. And you can rest assured that 
as Congress deals with the priority issues of funding government 
functions and operations through the annual budget process, and as 
proposed tax cuts and other legislative items are contemplated, I 
intend to see to it that we meet our responsibilities to retired 
coalminers.
  There are about 20,000 thousand retired miners and their widows 
living in West Virginia--and tens of thousands of more living in 
virtually every state of the Union. The Coalminers and Widows Health 
Protection Act will tell them that they can count on their health care 
benefits being there for them when they need them, just as they were 
promised.
  I ask unanimous consent that a copy 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. 2538

       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 ``Coal Miner and Widows Health 
     Protection Act of 2000''.

     SEC. 2. MANDATORY TRANSFER OF FUNDS TO COMBINED BENEFIT FUND.

       (a) Section 9705 of the Internal Revenue Code of 1986 
     (relating to transfers to the Combined Benefit Fund) is 
     amended by adding at the end the following:
       ``(c) Mandatory Transfers From General Fund.--
       ``(1) In general.--There are hereby authorized and 
     appropriated, out of any amounts in the Treasury not 
     otherwise appropriated, to the Combined Fund the following 
     amounts for the following fiscal years:
       ``(A) $38,000,000 for fiscal year 2001,
       ``(B) $37,000,000 for fiscal year 2002,
       ``(C) $36,000,000 for each of fiscal years 2003 and 2004,
       ``(D) $34,000,000 for each of fiscal years 2005 and 2006,
       ``(E) $33,000,000 for each of fiscal years 2007, 2008, and 
     2009, and
       ``(F) $32,000,000 for fiscal year 2010.
       ``(2) Use of funds.--Any amounts transferred to the 
     Combined Fund under paragraph (1) shall be available, without 
     fiscal year limitation, to pay benefits under this 
     subchapter.
       ``(3) Transfer.--The Secretary shall transfer amounts 
     appropriated under paragraph (1) on October 1 of each fiscal 
     year.''

     SEC. 3. CLARIFICATION OF AUTHORITY TO ASSIGN ELIGIBLE 
                   BENEFICIARIES.

       (a) In General.--Section 9706(a) of the Internal Revenue 
     Code of 1986 (relating to assignment of eligible 
     beneficiaries) is amended by striking ``, before October 1, 
     1993,''.
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the amendments made by 
     section 19143 of the Coal Industry Retiree Health Benefit Act 
     of 1992 (Public Law 102-486; 106 Stat. 3037), and no 
     assignment made under section 9706(a) of the Internal Revenue 
     Code of 1986 shall be invalidated because it was not made 
     before October 1, 1993.

     SEC. 4. CLARIFICATION OF AUTHORITY TO ASSIGN ELIGIBLE 
                   BENEFICIARIES TO SUCCESSORS OF SIGNATORY 
                   OPERATORS.

       (a) In General.--The last sentence of section 9701(c)(2)(A) 
     of the Internal Revenue Code of 1986 (defining related 
     persons) is amended to read as follows: ``A related person 
     shall also include a successor in interest of any person 
     described in clause (i), (ii), (iii), or a successor in 
     interest of the signatory operator itself.''
       (b) Effective Date.--The amendment made by this section 
     shall take effect as if included in the amendments made by 
     section 19143 of the Coal Industry Retiree Health Benefit Act 
     of 1992 (Public Law 102-486; 106 Stat. 3037), except that 
     such amendment shall not apply to any proceeding initiated 
     before the date of enactment of this Act if the proceeding 
     (and any appeal therefrom) is not pending on such date.
                                 ______
                                 
      By Mr. REID (for himself, Mr. Bennett, Mr. Daschle, Mr. Kerry, 
        Mrs. Murray, Mr. Bingaman, Mr. Kennedy, Mrs. Boxer, Mr. 
        Abraham, and Mr. Grams):
  S. 2539. A bill to amend the National Defense Authorization Act for 
Fiscal

[[Page S3836]]

Year 1998 with respect to export controls on high performance 
computers; to the Committee on Banking, Housing, and Urban Affairs.


   national defense authorization act for fiscal year 1998 amendments

  Mr. REID. Mr. President, I rise today to introduce a bipartisan bill 
that is critical to maintaining our nation's lead in the high-tech 
sector. In specific, this bill is crucial to the computer industry. 
This is an issue that I have been very interested in for quite some 
time, and in particular, have done a lot of work on this session.
  I first want to talk a little bit about the U.S. computer industry. 
According to an article in Computers Today, dated July 19, 1998, 
American computer technology has led the world since the first 
commercial electronic computer was deployed at the University of 
Pennsylvania in 1946.
  This industry is constantly changing with new companies and new 
products emerging every day. A statistic that I find fascinating is 
that more than 75 percent of the revenues of computer companies come 
from products that did not exist two years before. That statistic is 
from the CSPP Freedom to Grow.
  Through research and development, another issue I strongly favor, the 
computer industry has been able to remain competitive for all of these 
years.
  The challenge that we not face, and frankly a challenge that we 
haven't lived up to in the past as a Congress, is to allow our export 
control policies to change with the times, and not to overly restrict 
our nation's computer companies.
  We need to stop trying to control technology that is readily 
available, as we are doing today. The technology that we are regulating 
is readily available from many foreign companies. Companies from 
countries like China and other Tier 3 countries.
  I remember, not too long ago, I was able to secure funding for a 
Super-Computer for the University of Nevada, Las Vegas. That computer, 
which required its own room, is now about as powerful as a laptop 
computer. That is exactly the kind of computer that we are still 
regulating.
  Computers that are now considered Super-Computers operate at more 
than one million MTOPS, or about 500 times the current level of 
regulation.
  The bottom line is that by placing artificially low limits on the 
level of technology that can be exported, we may be denying market 
realities and could very quickly cripple America's global 
competitiveness for this vital industry. If Congress doesn't act 
quickly, we will substantially disadvantage American companies in an 
extremely competitive global market.
  Mr. President. On February 1, 2000, at my urging, and the urging of 
others in this body, President Clinton proposed changes to the United 
States export controls on high-performance computers. Since that 
accouncement, the President's proposal has been floating around 
Congress for a mandated 180 days, or six month, review period. When the 
President made his proposal, the new levels would have been sufficient, 
however, we are still regulating under the old levels, and therfore 
hindering American companies from competing in Tier 3 countries with 
other foreign companies.
  The bill that I am offering today simply reduces the congressional 
review period from 180 days to 30 days to complement the 
administration's easing of export restrictions, by amending the 
National Defense Authorization Act of 1998.
  I appreciate the recent bipartisan support of this bill and I look 
forward to debating this bill on the Senate floor in the near future.
  Mr. BENNETT. Mr. President, today Senator Harry Reid of Nevada and I 
are introducing bipartisan legislation with respect to the review 
period for the sale of high-performance computers. Both Senator Reid 
and I were hoping this legislation would not be necessary. We had 
planned it as an amendment to the Export Administration Act, but that 
act, for a variety of reasons, has been stalled here on the floor, and 
the issue is so important that we don't want to let it die. We are 
introducing this legislation in order to keep the issue alive and, if 
necessary, to provide a vehicle for producing the review that we think 
is necessary.
  Let me display a chart that demonstrates what is happening in the 
high-tech world of business computers. These are not the computers that 
we carry back and forth on the planes. You and I, as we fly back to our 
homes, have laptops and those laptops have amazing capabilities in them 
and represent the changes that are occurring in the computer world.
  If I can be personal for just a moment, at one point in my career, I 
was the head of a company that was grandly called the American Computer 
Corporation. We produced, among other products, a computer that was 
about the size of a washing machine. We were very proud of it. It had 
10 megabytes of hard disc memory in it, and it sold for about $35,000. 
It was literally built in a garage, and we sold every single one we 
could make.
  Today, I have in my hand a computer that costs less than $500, which 
has far more power and capacity than that old machine we were so proud 
of, with its 10 megabytes of hard disc. The laptop I carry with me back 
and forth between here and Utah has more computing power in it today 
than the computers that controlled the space shuttle.
  I have been down to Cape Canaveral to the Kennedy Space Center. I 
have seen the space shuttle. The space shuttle computers that control 
the flight of that at this time are very highly technical instruments 
and are built throughout the entire airplane. They take up so much room 
that they are part of the superstructure of the airplane itself. Today, 
there is more computing power in the laptop that I carry than there is 
in that whole airplane.
  This is a manifestation of what the people in the computer world call 
Moore's law. Mr. Moore was one of the first CEOs of Intel. He 
propounded over 20 years ago Moore's law which says that every 18 
months, the power of computers doubles for the same price; so that 
every 18 months, the computer that you had 18 months ago is now 
obsolete and the new one is twice as fast. Then, 18 months later the 
new one will be twice as fast as that one was. And 18 months later, the 
next new one will be twice as fast, and so on. Moore's law has held for 
over 20 years. Every 18 months the power of the computer doubles.
  Moore's law doesn't hold anymore--not because the power of the 
computer is not doubling but because the power of the computer is 
doubling in less than 18 months. It is doubling faster than Moore 
projected in Moore's law.
  This chart demonstrates what is happening in the world with what we 
call ``business computers.'' These are computers that are roughly the 
size of that old computer we produced that was the size of a washing 
machine, or a college refrigerator. Only now, these computers have the 
power and capacity that we used to think of in terms of the giant 
supercomputers that would fill this room.
  Thereby hangs the issue that has caused me and Senator Reid to join 
together and introduce this piece of legislation.
  When supercomputers, the huge machines that could do an enormous 
amount of computation work, were first invented, it was a matter of 
national security that they be kept out of the hands of America's 
enemies. So it was established by legislation that there would be a 
limit on the size of computers that could be exported because we wanted 
to make sure the supercomputers stayed in American hands.
  The limit that was placed on supercomputers was at the level of 8,000 
MTOPS. I don't mean to be overly technical here, but we need to 
understand what we are talking about. MTOPS is an acronym for millions 
of theoretical operations per second.
  How many theoretical operations or calculations can the computer 
perform in a second? How many millions can it perform in a second?
  At the time this legislation was put in place, it said anything over 
8 trillion theoretical operations per second constituted a 
supercomputer, and therefore it had to be protected from export. It had 
to be held in the United States, for national security purposes. We 
were the only country in the world that had a computer that could 
approach 8 trillion MTOPS, or millions of theoretical operations per 
second.
  That was then. This is now.
  I hold in my hand a device that is produced here in America by Intel 
that

[[Page S3837]]

contains eight chips. And therein lies the tale that I want to talk 
about today.
  Just think of this. This, by the way, retails for about $900. It is 
part of the mother board of a traditional business computer today. The 
mother board is about 2 feet square. This fits on the mother board with 
all of the other chips that are in it. But this is the controller of 
all of that. And it has in it eight tiny chips.

  Here is the marketplace for this kind of computer worldwide. We have 
the figures.
  In 1997, worldwide, it is a little over 2 million.
  You see in the blue down below is the market in the United States, 
and the green is overseas. You can see that the market overseas is 
bigger than the market in the United States.
  The chart marches on with projections made by the Gartner Group out 
of Connecticut to the year 2002. We see, roughly speaking, that in that 
5-year period--from 1997 to 2002--this market will quadruple. We are 
talking hundreds of billions of dollars per year of market.
  I want that understood as the matrix of what we are talking about 
here.
  This is the size of the market for a product of which this is the 
heart.
  Now let's talk about it in terms of export control on MTOPS.
  I hope we can tie all of these together. I realize this is a little 
technical. But understand when the legislation was passed, anything 
that had more than 8,000 MTOPS in it could not be exported, and 
therefore could not be sold in the green part of that bar.
  Let's look at what is happening as Moore's law becomes obsolete as 
the power of computers increases more rapidly.
  Here is a blowup of this device as it existed in 1999, less than 6 
months ago.
  A Pentium III chip carries with it 1,283 MTOPS. So if you had one of 
these with one Pentium III chip in it, you could export it. If you put 
two Pentium chips in it, you could export it because it doubles to 
2,383. If you put four Pentium chips in it, doubling it again, you went 
to 4,584. But when you doubled that by putting eight chips in it, it 
cannot be exported now because it is over 8,000 MTOPS.
  In 1999, this was a product that could be purchased in the United 
States by anybody, carried out the door, or installed, if you are 
buying it for your business, by the people who are providing for you. 
But it cannot be sold overseas without a review of the export license. 
Because we were so anxious to make sure that these computers didn't get 
into the wrong hands, the export license time for review of this was 
180 days, or 6 months. That meant that an American manufacturer who 
took one of these processors from Intel, put eight chips in it, and put 
it in his computer, could sell it anywhere he wanted to in America but 
could not export it for 180 days.
  What happened in that 180 days while he was waiting for export 
approval?
  Let's look at where we are now in the year 2000.
  In that 180-day period where you are waiting for export approval, the 
Itamium chip has been developed and come on the market. It has 6,131 
MTOPS in one chip. If you are going to export this product, you can 
only have one chip in it. If you put two in it, you are immediately 
close to 12,000 MTOPS. If you put in four, you are at 23,000 MTOPS. 
And, if you put in the standard eight that this carries, you are at 
47,000 MTOPS.
  The administration has proposed raising the 8,000 MTOPS level to 
25,000, which clearly doesn't do you any good. The technology is moving 
so rapidly that you can buy 25,000 just as quickly as you can buy 
8,000.
  This is where we are today.
  If you had applied for an export license with Pentium chips last year 
and waited 67 months, by the time you got your 6-month approval, you 
would be facing this kind of competition, and no one would want your 
Pentium chip. They would want one with the Itamium chip. You say, all 
right. I will put up with the 6 months, and I will apply for this 
computer with eight Itamium 2000 chips.
  What is ahead of you if you do that? Looking ahead to 2001 with the 
Itamium 2001 chip, this is what you are facing. That chip will do 9,198 
MTOPS all by itself. Even one chip in this one makes it illegal to 
export without waiting 180 days for approval. Go to the normal eight 
chips, and you are at 70,000 MTOPS.

  To those who say: Good heavens, we are exporting or allowing people 
to buy supercomputers that can do all of the command and control 
decisions for an entire defense system, we are in terrible trouble, we 
are giving away our secrets; I say in the Defense Department we still 
have supercomputers that are currently running at the rate of 2 million 
MTOPS. For those supercomputers, these things are child's play. By the 
time we get to 70,000 MTOPS in a computer of the kind in my hand, the 
supercomputers will have gone up from 2 million to as high as 30 
million. That is the speed with which all of this is happening.
  What are we proposing in this legislation? Simply this: We are saying 
approval can be granted within 30 days. We are taking it from 6 months 
down to 1.
  Why do I pick 30 days, along with Senator Reid? We look at the export 
controls--which, again, are there to protect America's secrets--and we 
find that 30 days is currently the timeframe for an F-16. If a foreign 
government wants to buy our most sophisticated aircraft, we take 30 
days to determine whether or not that particular aircraft in the hands 
of that particular government produces some kind of threat to national 
security. Yet we will take 6 months to decide whether that government 
can buy a computer that is available in virtually every technology 
center anywhere in the United States. They can buy it in the United 
States, throw it on the airplane, and take it abroad themselves.
  Somebody could say: Gee, that is illegal to take abroad. What kind of 
secrecy and control is it when one can buy it on the street in the 
United States, any citizen can buy it as easily as they could buy one 
of these, but for some reason we can't allow them to export it?
  There is another factor to recognize. We are not operating in a 
vacuum. There are Japanese companies that can do this. There are French 
companies that can do this. There are German companies that can can do 
this. If we say American companies can't do this, we just guarantee the 
rest of the world will get this market. Remember those lines on that 
bar chart showing the foreign market is bigger than the American 
market? We are guaranteeing the rest of the world will take this market 
away from the United States as we sit here with our 180-day review 
period, saying in effect no American company can get into this business 
at all, because in that 180-day period everyone overseas will have 
bought foreign and not bought American.
  It is vitally important that we recognize the reality of what is 
happening in the computer world, we bring the date necessary for review 
down to a reasonable period of time, and we say, if you want to buy one 
of these from Intel with eight Itanium 2001 chips in it, it will not 
take any more time for you to do that than it will take you to buy an 
F-16. That is the reasonable, intelligent thing to do. That is what the 
legislation of Senator Reid and myself seeks to establish.
  I hope it is not necessary for our bill ever to be considered or 
passed. I hope the export administration bill comes back on the floor 
and Senator Reid and I can offer our bill as an amendment to that bill 
and see it adopted by the Senate and sent to the President as rapidly 
as possible. Just in case that does not happen, by introducing this 
bill on behalf of Senator Reid and myself today, I am making clear we 
have a backup somewhere in the legislative channel to which we can turn 
to try to make it logical and possible for American computer 
manufacturers and American chip manufacturers to continue America's 
leadership in this market.
  Make no mistake, we are talking hundreds of billions of dollars where 
America currently has the technological leadership in the world. That 
leadership is now threatened by Government regulations. It is 
imperative we change those regulations on the floor of the Senate, if 
possible, working with the administration.
                                 ______
                                 
      By Mr. BROWNBACK (for himself, Mr. Kerrey, and Mr. Murkowski):

[[Page S3838]]

  S. 2540. A bill to amend the Food Security Act of 1985 to require the 
Secretary of Agriculture to establish a carbon sequestration program to 
permit owners and operators of land to enroll the land in the program 
to increase the sequestration of carbon, and for other purposes; to the 
Committee on Agriculture, Nutrition, and Forestry.


             Domestic Carbon Storage Incentive Act of 2000

  Mr. BROWNBACK. Mr. President, I rise today to introduce a bill that I 
think is going to be a significant issue for U.S. agriculture and the 
environment both. It's the Domestic Carbon Storage Incentive Act of 
2000. I am putting forward a concept that is being talked about more 
and more, a concept called carbon farming, where we encourage the 
agriculture industry to farm in such a way that the plant life pulls 
CO2 out of the air, fixes carbon in the ground, releases 
oxygen in an ever-increasing amount. There are farming techniques that 
can fix or sequester more carbon in the ground. What we are doing with 
this bill is encouraging more of that carbon sequestration, pulling 
more of the CO2 out of the air thus reducing some of the 
greenhouse gases that are in the air, whether they are there by natural 
or man-made sources. It is a win for the environment and it is a win 
for agriculture, I think it is a very positive thing we can do in 
encouraging good agricultural stewardship and good environmentalism.
  With this bill we are providing financial incentives to landowners 
who increase conservation practices which, as I describe, help pull 
carbon dioxide out of the atmosphere and store it as carbon in the 
soil. This bill seeks to encourage the positive contributions to the 
environment made by the agriculture industry. I am joined in this bill 
by my friend, Senator Kerrey of Nebraska and Senator Murkowski of 
Alaska along with a number of others.
  For some time now I have been looking at a way for a way to approach 
environmental issues from an incentive-based proactive stance. I think 
it is important we break away from the regulatory model we have been in 
on the environment. We have basically said all sticks on this: If you 
do this we are going to do this to you on environmental rules and 
issues. It has all been a regulatory approach. I think it is important 
we engage the markets and create an incentive approach, and that is 
what this bill does. I believe we are on the verge of seeing 
agriculture come into a whole new market with this type of approach, an 
environmental market where producers will benefit rather than be 
burdened by environmental concerns.
  U.S. agriculture has long been appreciated for its ability to feed 
the world. As any good farmer knows, in order to grow good crops you 
must take care of the land, be a steward of the land. Farmers take this 
role very seriously. My family farms. My dad and my brother are both 
full-time farmers. But sometimes markets and economic stress make 
conservation very difficult to pursue. This bill would help offset some 
of the costs to expand conservation practices.
  It is this sort of eco-agriculture that we should encourage and 
enhance to deal with environmental concerns, rather than resorting to 
governmental regulations and mandates to solve our problems. Farmers 
want to do the right thing. They have more reason than anybody else to 
preserve and protect the land, the land and the water and the air--but 
Government and markets do not always make that job very easy.
  I applaud my colleague, Senator Roberts, for all the work he has done 
in this area. His bill that he has to enhance carbon sequestration 
research has called needed attention to a very important area, the 
research work that we need to do about what practices fix the most 
carbon into the ground and what ones are the most helpful to the 
atmosphere. These two approaches, working together, the research on how 
we can do it better and more of it, along with more incentives to put 
that research into practice, I think are a good tandem.

  Why do we do this? Carbon dioxide is a greenhouse gas believed to 
contribute to global warming. While there is debate over the role which 
human activity plays in speeding up the warming process, there is broad 
consensus that there are increased carbon levels in the atmosphere 
today. Until now, the only real approach seriously considered to 
address climate change was an international treaty which calls for 
emission limits on carbon dioxide, which would mean limiting the amount 
that comes from your car, your business and your farm.
  The Kyoto treaty also favored exempting developing nations from 
emissions limits, putting the U.S. economy at a distinct disadvantage. 
Approaching the issue of climate change in this fashion would be very 
costly and would not respond to the global nature of this problem 
because they are exempting several countries already.
  Instead, the approach I am putting forward encourages offsetting 
greenhouse gases through improved land management and conservation. As 
a result, these practices will also lead to better water quality, less 
runoff pollution, better wildlife habitat, and an additional revenue 
source for farmers. It truly is one of those win-win propositions for 
the environment and for agriculture.
  Specifically, my bill will allow landowners to submit plans detailing 
practices they would be willing to undertake to store additional carbon 
in the soil. These plans would then compete for entrance into the 
program, with the best plans achieving funding. Verification of this 
program would be similar to current conservation programs, such as the 
Environmental Quality Incentives Program where farmers need only comply 
with the practices they set forth in the contract. The program is 
limited to 5 million acres and is not a setaside. Rather, this bill 
encourages conservation practices such as no-till farming, buffer 
strips, and biomass production, to name a few, which are known to 
enhance the soil's ability to store carbon.
  Under this program, contracts will be for a minimum of 10 years and 
USDA will be required, in conjunction with other agencies and land 
grant universities, to finalize criteria for measuring the carbon-
storing ability of various conservation practices. This objective will 
be greatly enhanced by the organizations such as Kansas State 
University in my home State, which have conducted significant research 
already on ways that various carbon-storing practices occur in 
agriculture.

  Agriculture can play a substantial role in protecting the environment 
if we put these incentives forward. One might ask, is there benefit to 
carbon storage? Are we talking about significant numbers? Listen to 
some of these numbers. The total carbon sequestration and fossil fuel 
offset potential of U.S. croplands is currently estimated at 154 
million metric tons of carbon per year, or 133 percent of the total 
greenhouse gas emissions by all these activities. In other words, even 
current agricultural croplands have the ability to store carbon in the 
soil. Imagine how much more this process can be enhanced if a focused 
effort is made.
  Early estimates indicate that the potential for a carbon market for 
U.S. agriculture could reach $5 billion per year for the next 30 to 40 
years. Carbon markets are already emerging in the private sector with 
farmers selling their carbon-storing practices to utilities. There is a 
Consortium for Agriculture Soils Mitigation of Greenhouse Gases that is 
marketing this already.
  Farmers are already beginning to look toward carbon sequestration or 
carbon farming practices as a potential new market. Between 1998 and 
1999, Iowa farmers grew and harvested 4,000 tons of switchgrass for use 
by a utility. These farmers not only benefit from the sale of the 
biomass commodity itself but are able to sell the additional benefit 
they are providing in growing the switchgrass, which is carbon 
sequestration. This bill will allow all farmers to progress toward 
verification

[[Page S3839]]

and potential sale of carbon benefits to third parties.
  The estimated amount of carbon stored in world soils is more than 
twice the carbon living in vegetation or in the atmosphere. 
Approximately 50 percent of the soil organic carbon has been lost from 
the soil over a period of 50 to 100 years of cultivation. This loss 
represents the potential for storage of carbon in the soil.
  In the tall grass prairie located in Kansas, Kansas State University 
researchers have demonstrated an increase of approximately 2 tons of 
carbon per acre through increased conservation practices--2 tons 
additional carbon pulled out of the air and put into the ground per 
acre. That demonstrates the potential in rangeland soils, and there are 
already a number of agricultural practices which enhance carbon 
sequestration.
  Obviously, carbon sequestration has a lot to offer as an 
environmental and agricultural policy. It is something that can provide 
a win-win situation for the environment and agriculture as we look 
forward to an era of another income source and a good way the 
environment and agriculture can work together.
  Mr. President, I introduce the bill on behalf of myself, Mr. Kerrey, 
Mr. Murkowski, and a number of other cosponsors.
 Mr. KERREY. Mr. President, today I am introducing the Domestic 
Carbon Storage Incentive Act of 2000 with Senators Brownback and 
Murkowski. Agriculture must play a major role in any climate change 
plan, since it is an important part of both the cause and the solution. 
While the facts about global warming are not all clear, what is clear 
is that global warming is occurring. What is also clear is that human 
activities are emitting increasingly large volumes of greenhouse gases, 
and that these gases are influencing global warming.
  Carbon sequestration, that is pulling carbon from the air into the 
soil, is an important part of fighting global warming, and agriculture 
is one of the largest and most economical carbon ``sinks.'' Farmers and 
ranchers can store additional carbon in the soil fairly easily, using 
best management practices such as no-till farming, increased production 
of high carbon-storing crops, and increased use of winter cover crops. 
Storing carbon in the soil is not only good for the environment, it is 
also advantageous for soil quality and agriculture production. I am 
pleased that farmers and ranchers are beginning to realize that carbon 
sequestration is a win-win situation. Agriculture is sometimes hesitant 
to adopt change, however, and it is important to provide producers with 
the opportunity to fully utilize carbon-storing techniques.
  This bill will give agriculture producers added financial incentive 
to adopt these best management practices. Unlike CRP, the land will not 
be a set-aside, but rather these practices will be used on land in 
production. This program will be completely voluntary, with farmers 
competing for entrance into the program by proposing specific plans to 
store more carbon in their land. The best plans will be awarded ten-
year contracts with payments no greater than twenty dollars per acre 
each year.
  Some farmers have expressed concern about using these carbon-storing 
techniques on their land, however, because current studies only involve 
small experimental plots. This legislation will implement carbon 
sequestration practices on whole farms, both to gather more data on 
beneficial techniques and to set examples for other farmers to follow.
  While measuring carbon storage is a difficult task, the most direct 
means of determining soil carbon sequestration is to measure, over 
time, sequential changes in the soil. At a recent Senate Agriculture 
Subcommittee hearing, several scientists and policy-makers advocated a 
greater need for more research and more data. This program will provide 
actual data from different soil types across the nation, furthering our 
collective knowledge of causes and solutions to global warming.
  The Domestic Carbon Storage Incentive Act is an important step in 
moving agriculture's role in fighting climate change forward. Carbon 
sequestration will benefit everyone: farmers, ranchers, the 
environment, and society. This bill will serve a public good, valued 
far above the cost of the program. Congress has the opportunity to take 
action to combat global warming, and I hope that the Senate can begin 
to achieve this goal by acting on this sound legislation.
                                 ______
                                 
      By Mr. DASCHLE (for himself, Mr. Moynihan, Mr. Kennedy, Mr. 
        Akaka, Mr. Baucus, Mr. Biden, Mr. Bingaman, Mrs. Boxer, Mr. 
        Bryan, Mr. Byrd, Mr. Cleland, Mr. Dodd, Mr. Dorgan, Mr. Durbin, 
        Mrs. Feinstein, Mr. Graham, Mr. Harkin, Mr. Hollings, Mr. 
        Inouye, Mr. Johnson, Mr. Kerry, Mr. Lautenberg, Mr. Leahy, Mr. 
        Levin, Mrs. Lincoln, Ms. Mikulski, Mrs. Murray, Mr. Reed, Mr. 
        Reid, Mr. Robb, Mr. Rockefeller, Mr. Sarbanes, Mr. Schumer, and 
        Mr. Wellstone):
  S. 2541. A bill to amend title XVIII of the Social Security Act to 
provide a prescription drug benefit for the aged and disabled under the 
Medicare Program, to enhance the preventative benefits covered under 
such program, and for other purposes; to the Committee on Finance.


         medicare expansion for needed drugs (mend) act of 2000

  Mr. DASCHLE. Mr. President, today I am pleased to join with 34 of our 
Senate Democratic colleagues in introducing the Medicare Expansion for 
Needed Drugs Act, a bill to mend Medicare by adding a long overdue 
prescription drug benefit.
  I want to begin by thanking all the people who have brought us to 
this point.
  Senator Dorgan and many of our other colleagues have held numerous 
hearings in Washington, and around the country on the issue of Medicare 
prescription drug coverage. I thank my colleagues and all who came to 
the hearings.
  I know that they heard from people at those hearings they would not 
have otherwise heard from. The testimony they heard was virtually 
unanimous at each of these hearings, that Medicare must now, this year, 
be expanded to include necessary coverage.
  I also thank all of the seniors, pharmacists, doctors, and others who 
took the time to educate us on this important matter. Their wisdom has 
made this a better bill.
  In addition, I thank the President--for keeping the issue of Medicare 
prescription drugs on the national agenda, and for providing the 
framework for our proposal.
  I thank the many organizations representing seniors and consumers who 
told us about the terrible strain paying for prescription drugs places 
on seniors and their families.
  Most of all, I thank the many seniors from all across America who 
told us about their struggles to pay for prescription drugs.
  I want to share with you one example from my State.
  Fran Novotny is a 70-year-old retired nurse from Hill City, SD. She 
takes prescription medications every day to control diabetes, 
hypertension, and asthma. She has also had bypass surgery.
  Every month, she gets a Social Security check for $616.
  Every month, she spends about $550 on prescriptions.
  She has a small pension, but it doesn't add up to much. So she is 
quickly depleting her entire life savings. After it is gone, she has no 
idea how she will pay for her medications.
  Her story, and many others like it, are the reason we must move 
forward and enact a Medicare prescription drug benefit this year. We 
must make sure that Fran Novotny--and the millions of seniors like 
her--can afford their prescriptions--and their grocery bills and their 
rent and their clothing and their utility bills.
  The average Medicare beneficiary fills 18 prescriptions a year.
  Yet three-in-five Medicare beneficiaries lack decent, dependable 
coverage for prescription drugs. And more than one-third of all 
Medicare beneficiaries--more than 15 million seniors--have no 
prescription drug coverage at all.
  This is not a problem faced only by the poorest beneficiaries. More 
than half of all Medicare beneficiaries without coverage have incomes 
above 150 percent of poverty,

[[Page S3840]]

  That is why two-thirds of the Democratic caucus has joined in 
introducing this bill to make prescription drug coverage available and 
affordable to all Medicare beneficiaries.
  Our plan is universal.
  Every single Medicare beneficiary who wants the coverage has it under 
this bill.
  Second, our plan is voluntary.
  It is not a requirement that you sign up for this legislation. If you 
have a good plan, use it. If you have a good company, stay with it. If 
you have a plan that works for you, for whatever reason, this plan 
encourages you to stay right where you are. But if you do not have 
coverage, if you need coverage and cannot get it anywhere else, this 
bill will make it available to you for the first time.
  Every Medicare beneficiary can choose to participate, whether he or 
she is in traditional, fee-for-service Medicare or a Medicare Plus 
Choice plan. Retirees who already have private prescription drug 
coverage can keep it. It is up to them.
  We also provide incentives to employers to provide and maintain drug 
coverage. We do not want to see the people who are now providing it to 
their employees or retirees dropping these people once this plan 
becomes available, so we have encouraged, we have incentivized 
businesses to do that.
  Our plan provides meaningful coverage.
  Medicare would cover half of beneficiaries' discounted prescription 
drug bills, up to $5,000 a year. That means that Fran Novotny--who 
spends $550 a month on prescription drugs--would be able to save at 
least $275 a month. That $275 a month will make a real difference in 
her life.
  Our plan also provides catastrophic coverage for people who need to 
take very expensive drugs that can cost $5,000, or $10,000 a year, or 
more. It is our hope that after a Medicare beneficiary has paid the 
first $3,000 or $4,000 in catastrophic care costs, Medicare would pick 
up the balance.
  Our program is also affordable.
  Beneficiaries would pay premiums to cover about half the cost of the 
program. Medicare would contribute the other half.
  Seniors with incomes between 135 percent and 150 percent of poverty 
would receive assistance with their premiums. Those with incomes below 
135 percent of poverty would receive assistance with premiums and 
copays.
  Our plan would give seniors bargaining power that they just don't 
have today.
  The problem today isn't just that seniors end up paying out-of-pocket 
expenses for their prescriptions, they also pay a lot more for those 
out-of-pocket costs. On average, seniors pay twice as much for their 
medications as big insurance companies and HMOs do today.
  The fact that seniors face the highest prices at the drugstore is, 
frankly, wrong. Our plan gives seniors the bargaining power that comes 
with numbers.
  Another thing our plan does--which is very important to many of us in 
rural areas--is to include special protections to make sure that 
Medicare beneficiaries who live in rural communities have the same 
affordable, timely access to prescription drugs as everyone else.
  It gives the Secretary of Health and Human Services the authority to 
offer pharmacists incentives to cover rural communities and other hard-
to-serve areas. Every American should be able to get affordable 
prescription drugs--when they need them--whether they live in a big 
city or a small town.
  Our plan mirrors the best practices used in the private sector.
  For beneficiaries in traditional Medicare, prescription drug coverage 
would be delivered by private entities that negotiate prices with drug 
manufacturers. This is the same mechanism used by private insurers.
  Beneficiaries in Medicare Plus Choice plans would get their 
prescription drug coverage through their Plus Choice plan.
  Finally, the bill recognizes that we need to shift the focus of 
Medicare from simply treating illness, to keeping beneficiaries well.
  While prescription drug coverage is an important first step in this 
effort, there are likely other changes we should make. So this bill 
sets up a process for Congress to consider further benefit changes--to 
enhance prevention--on an expedited basis. I want to thank Senator 
Graham for his leadership on this important issue.
  On the issue of broader Medicare reform, I would like to see 
prescription drugs pass as part of a larger package of reforms and 
modernizations, and I believe this bill and its benefit is consistent 
with such efforts.
  I'm also pleased to report that our bill is supported by an array of 
important groups: The National Council of Senior Citizens; the 
Committee to Preserve Social Security and Medicare; National Council on 
the Aging; the Older Women's League; the AFL-CIO; The National 
Community Pharmacists Association; Families USA; Consumers Union; the 
Leadership Council of Aging Organizations; the Association for Homes 
and Services for the Aging; the National Association of Area Agencies 
on Aging; and AARP.
  We hope we will have support from our Republican colleagues, too.
  Prescription drug coverage for all seniors is an issue on which we 
cannot afford to procrastinate. The cost of delay is too great--in lost 
opportunities, lost health, and lost lives.
  In 1965, when Medicare was created, it didn't include prescription 
drug coverage. Neither did most private insurance plans. Today, 
virtually all private health plans offer some sort of prescription drug 
coverage--but not Medicare.
  It is time--it is past time--to close this gap. Prescription drugs 
are an integral part of medicine today. They ought to be an integral 
part of Medicare. Period.
  Now--before the Baby Boomers retire, and the problems are still 
manageable--is the time to strengthen Medicare. Now, while our economy 
is strong, and we have a surplus, is the time to add a universal, 
voluntary, and affordable prescription drug benefit to Medicare.
  Mr. President, I ask unanimous consent that at this point 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. 2541

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medicare 
     Expansion for Needed Drugs (MEND) Act of 2000''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.

               TITLE I--PRESCRIPTION DRUG BENEFIT PROGRAM

Sec. 101. Prescription drug benefit program.

     ``Part D--Prescription Drug Benefit for the Aged and Disabled

``Sec. 1860. Establishment of prescription drug benefit program for the 
              aged and disabled.
``Sec. 1860A. Scope of benefits.
``Sec. 1860B. Payment of benefits; benefit limits.
``Sec. 1860C. Eligibility and enrollment.
``Sec. 1860D. Premiums.
``Sec. 1860F. Prescription Drug Insurance Account.
``Sec. 1860G. Administration of benefits.
``Sec. 1860H. Employer incentive program for employment-based retiree 
              drug coverage.
``Sec. 1860I. Appropriations to cover Government contributions.
``Sec. 1860J. Prescription drug defined.''.
Sec. 102. Medicaid buy-in of medicare prescription drug coverage for 
              certain low-income individuals.
``Sec. 1860E. Special eligibility, enrollment, and copayment rules for 
              low-income individuals.''.
Sec. 103. Catastrophic prescription drug coverage benefit.
Sec. 104. Comprehensive immunosuppressive drug coverage for transplant 
              patients.
Sec. 105. GAO study and biennial reports on competition and savings.
Sec. 106. MedPAC study and annual reports on the pharmaceutical market, 
              pharmacies, and beneficiary access.

             TITLE II--ENHANCED MEDICARE PREVENTION PROGRAM

Sec. 201. MedPAC biennial report.
Sec. 202. National Institute on Aging study and report.
Sec. 203. Institute of Medicine 5-year medicare prevention benefit 
              study and report.
Sec. 204. Fast-track consideration of prevention benefit legislation.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Prescription drug coverage was not a standard part of 
     health insurance when the medicare program under title XVIII 
     of the

[[Page S3841]]

     Social Security Act was enacted in 1965. Since 1965, however, 
     drug coverage has become a key component of most private and 
     public health insurance coverage, except for the medicare 
     program.
       (2) At least \2/3\ of medicare beneficiaries have 
     unreliable, inadequate, or no drug coverage at all.
       (3) Seniors who do not have drug coverage typically pay, at 
     a minimum, 15 percent more than people with coverage.
       (4) Medicare beneficiaries at all income levels lack 
     prescription drug coverage, with more than \1/2\ of such 
     beneficiaries having incomes greater than 150 percent of the 
     poverty line.
       (5) The number of private firms offering retiree health 
     coverage is declining.
       (6) Medigap premiums for drugs are too expensive for most 
     beneficiaries and are highest for older senior citizens, who 
     need prescription drug coverage the most and typically have 
     the lowest incomes.
       (7) The management of a medicare prescription drug benefit 
     should mirror the practices employed by private entities in 
     delivering prescription drugs. Discounts should be achieved 
     through competition.
       (8) All medicare beneficiaries should have access to a 
     voluntary, reliable, affordable outpatient drug benefit as 
     part of the medicare program that assists with the high cost 
     of prescription drugs and protects them against excessive 
     out-of-pocket costs.
       (9) The addition of a medicare drug benefit should be 
     consistent with an overall plan to strengthen and modernize 
     the medicare program.

               TITLE I--PRESCRIPTION DRUG BENEFIT PROGRAM

     SEC. 101. PRESCRIPTION DRUG BENEFIT PROGRAM.

       (a) In General.--Title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.) is amended--
       (1) by redesignating part D as part E; and
       (2) by inserting after part C the following new part:

     ``Part D--Prescription Drug Benefit for the Aged and Disabled


 ``establishment of prescription drug benefit program for the aged and 
                                disabled

       ``Sec. 1860. (a) In General.--There is established a 
     voluntary insurance program to provide prescription drug 
     benefits in accordance with the provisions of this part for 
     individuals who are aged or disabled or have end-stage renal 
     disease and who elect to enroll under such program, to be 
     financed from premium payments by enrollees together with 
     contributions from funds appropriated by the Federal 
     Government.
       ``(b) Noninterference.--In administering the prescription 
     drug benefit program established under this part, the 
     Secretary may not--
       ``(1) require a particular formulary or institute a price 
     structure for benefits;
       ``(2) interfere in any way with negotiations between 
     private entities and drug manufacturers, or wholesalers; or
       ``(3) otherwise interfere with the competitive nature of 
     providing a prescription drug benefit through private 
     entities.


                          ``scope of benefits

       ``Sec. 1860A. (a) In General.--The benefits provided to an 
     individual enrolled in the insurance program under this part 
     shall consist of--
       ``(1) payments made, in accordance with the provisions of 
     this part, for covered prescription drugs (as specified in 
     subsection (b)) dispensed by any pharmacy participating in 
     the program under this part (and, in circumstances designated 
     by the private entity, by a nonparticipating pharmacy), 
     including any specifically named drug prescribed for the 
     individual by a qualified health care professional regardless 
     of whether the drug is included in a formulary established by 
     the private entity if such drug is certified as medically 
     necessary by such health care professional, up to the benefit 
     limits specified in section 1860B; and
       ``(2) charging by pharmacies of the negotiated price--
       ``(A) for all covered prescription drugs, without regard to 
     such benefit limit; and
       ``(B) established with respect to any drugs or classes of 
     drugs described in subparagraphs (A) through (D) or (F) of 
     section 1927(d)(2) that are available to individuals 
     receiving benefits under this title.
       ``(b) Covered Prescription Drugs.--
       ``(1) In general.--Covered prescription drugs, for purposes 
     of this part, include all prescription drugs (as defined in 
     section 1860J(1)), including smoking cessation agents, except 
     as otherwise provided in this subsection.
       ``(2) Exclusions from coverage.--Covered prescription drugs 
     shall not include drugs or classes of drugs described in 
     subparagraphs (A) through (D) and (F) through (H) of section 
     1927(d)(2) unless--
       ``(A) specifically provided otherwise by the Secretary with 
     respect to a drug in any of such classes; or
       ``(B) a drug in any of such classes is certified to be 
     medically necessary by a health care professional.
       ``(3) Exclusion of prescription drugs to the extent covered 
     under part a or b.--A drug prescribed for an individual that 
     would otherwise be a covered prescription drug under this 
     part shall not be so considered to the extent that payment 
     for such drug is available under part A or B, including all 
     injectable drugs and biologicals for which payment was made 
     or should have been made by a carrier under section 
     1861(s)(2) (A) or (B) as of the date of enactment of the 
     Medicare Expansion for Needed Drugs (MEND) Act of 2000. Drugs 
     otherwise covered under part A or B shall be covered under 
     this part to the extent that benefits under part A or B are 
     exhausted.


                 ``payment of benefits; benefit limits

       ``Sec. 1860B. (a) Payment of Benefits.--There shall be paid 
     from the Prescription Drug Insurance Account within the 
     Supplementary Medical Insurance Trust Fund, in the case of 
     each individual who is enrolled in the insurance program 
     under this part and who purchases covered prescription drugs 
     in a calendar year, an amount, not to exceed 50 percent of 
     the applicable limit under subsection (b), equal to 50 
     percent of the negotiated price for each such covered 
     prescription drug or such higher percentage as is proposed by 
     a private entity pursuant to section 1860G(d)(7), if the 
     Secretary finds that such percentage will not increase 
     aggregate costs to the Prescription Drug Insurance Account.
       ``(b) Benefit Limits.--
       ``(1) Calendar years 2002 through 2009.--For purposes of 
     subsection (a), the limit under this subsection is--
       ``(A) for each of calendar years 2002, 2003, and 2004, 
     $2,000;
       ``(B) for each of calendar years 2005, 2006, and 2007, 
     $3,000;
       ``(C) for calendar year 2008, $4,000; and
       ``(D) for calendar year 2009, $5,000.
       ``(2) Calendar year 2010 and subsequent years.--For 
     purposes of subsection (a), the limit under this subsection 
     for calendar year 2010 and each subsequent calendar year is 
     equal to the greater of--
       ``(A) the limit for the preceding year adjusted by the 
     percentage change in the Consumer Price Index for all urban 
     consumers (U.S. urban average) for the 12-month period ending 
     with June of the preceding year; or
       ``(B) the limit for the preceding year.


                      ``eligibility and enrollment

       ``Sec. 1860C. (a) Eligibility.--Every individual who, in or 
     after 2002, is entitled to hospital insurance benefits under 
     part A or enrolled in the medical insurance program under 
     part B is eligible to enroll, in accordance with the 
     provisions of this section, in the insurance program under 
     this part, during an enrollment period prescribed in or under 
     this section, in such manner and form as may be prescribed by 
     regulations.
       ``(b) Enrollment.--
       ``(1) In general.--Each individual who satisfies subsection 
     (a) shall be enrolled (or eligible to enroll) in the program 
     under this part in accordance with the provisions of section 
     1837, as if that section applied to this part, except as 
     otherwise explicitly provided in this part.
       ``(2) Single enrollment period.--Except as provided in 
     section 1837(i) (as such section applies to this part), 
     1860E, or 1860H, or as otherwise explicitly provided, no 
     individual shall be entitled to enroll in the program under 
     this part at any time after the initial enrollment period.
       ``(3) Special enrollment period for 2002.--
       ``(A) In general.--An individual who first satisfies 
     subsection (a) in 2002 may, at any time on or before December 
     31, 2002--
       ``(i) enroll in the program under this part; and
       ``(ii) enroll or reenroll in such program after having 
     previously declined or terminated enrollment in such program.
       ``(B) Effective date of coverage.--An individual who 
     enrolls under the program under this part pursuant to 
     subparagraph (A) shall be entitled to benefits under this 
     part beginning on the first day of the month following the 
     month in which such enrollment occurs.
       ``(c) Period of Coverage.--
       ``(1) In general.--Except as otherwise provided in this 
     part, an individual's coverage under the program under this 
     part shall be effective for the period provided in section 
     1838, as if that section applied to the program under this 
     part.
       ``(2) Part d coverage terminated by termination of coverage 
     under parts a and b.--In addition to the causes of 
     termination specified in section 1838, an individual's 
     coverage under this part shall be terminated when the 
     individual retains coverage under neither the program under 
     part A nor the program under part B, effective on the 
     effective date of termination of coverage under part A or (if 
     later) under part B.


                               ``premiums

       ``Sec. 1860D. (a) Annual Establishment of Monthly Premium 
     Rates.--
       ``(1) In general.--The Secretary shall, during September of 
     2001 and of each succeeding year, determine and promulgate a 
     monthly premium rate for the succeeding year in accordance 
     with the provisions of this subsection.
       ``(2) Actuarial determinations.--
       ``(A) Determination of annual benefit costs.--The Secretary 
     shall estimate annually for the succeeding year the amount 
     equal to the total of the benefits that will be payable from 
     the Prescription Drug Insurance Account for prescription 
     drugs dispensed in such calendar year with respect to 
     enrollees in the program under this part. In calculating such 
     amount, the Secretary shall include an appropriate amount for 
     a contingency margin.
       ``(B) Determination of monthly premium rates.--

[[Page S3842]]

       ``(i) In general.--The Secretary shall determine the 
     monthly premium rate with respect to such enrollees for such 
     succeeding year, which shall be \1/12\ of the share specified 
     in clause (ii) of the amount determined under subparagraph 
     (A), divided by the total number of such enrollees, and 
     rounded (if such rate is not a multiple of 10 cents) to the 
     nearest multiple of 10 cents.
       ``(ii) Enrollee and employer percentage shares.--The share 
     specified in this clause, for purposes of clause (i), shall 
     be--

       ``(I) one-half, in the case of premiums paid by an 
     individual enrolled in the program under this part; and
       ``(II) two-thirds, in the case of premiums paid for such an 
     individual by a former employer (as defined in section 
     1860H(f)(2)).

       ``(3) Publication of assumptions.--The Secretary shall 
     publish, together with the promulgation of the monthly 
     premium rates for the succeeding year, a statement setting 
     forth the actuarial assumptions and bases employed in 
     arriving at the amounts and rates determined under paragraphs 
     (1) and (2).
       ``(b) Payment of Premiums.--
       ``(1) Payments by deduction from social security, railroad 
     retirement benefits, or benefits administered by opm.--
       ``(A) Deduction from benefits.--In the case of an 
     individual who is entitled to or receiving benefits as 
     described in subsection (a), (b), or (d) of section 1840, 
     premiums payable under this part shall be collected by 
     deduction from such benefits at the same time and in the same 
     manner as premiums payable under part B are collected 
     pursuant to section 1840.
       ``(B) Transfers to prescription drug insurance account.--
     The Secretary of the Treasury shall, from time to time, but 
     not less often than quarterly, transfer premiums collected 
     pursuant to subparagraph (A) to the Prescription Drug 
     Insurance Account from the appropriate funds and accounts 
     described in subsections (a)(2), (b)(2), and (d)(2) of 
     section 1840, on the basis of the certifications described in 
     such subsections. The amounts of such transfers shall be 
     appropriately adjusted to the extent that prior transfers 
     were too great or too small.
       ``(2) Direct payments to secretary.--
       ``(A) Additional payment by enrollee.--An individual to 
     whom paragraph (1) applies (other than an individual 
     receiving benefits as described in section 1840(d)) and who 
     estimates that the amount that will be available for 
     deduction under such paragraph for any premium payment period 
     will be less than the amount of the monthly premiums for such 
     period may (under regulations) pay to the Secretary the 
     estimated balance, or such greater portion of the monthly 
     premium as the individual chooses.
       ``(B) Payments by other enrollees.--An individual enrolled 
     in the insurance program under this part with respect to whom 
     none of the preceding provisions of this subsection applies 
     (or to whom section 1840(c) applies) shall pay premiums to 
     the Secretary at such times and in such manner as the 
     Secretary shall by regulations prescribe.
       ``(C) Deposit of premiums.--Amounts paid to the Secretary 
     under this paragraph shall be deposited in the Treasury to 
     the credit of the Prescription Drug Insurance Account in the 
     Supplementary Medical Insurance Trust Fund.
       ``(c) Certain Low-Income Individuals.--For rules concerning 
     premiums for certain low-income individuals, see section 
     1860E.


                 ``prescription drug insurance account

       ``Sec. 1860F. (a) Establishment.--There is created within 
     the Federal Supplemental Medical Insurance Trust Fund 
     established by section 1841 an account to be known as the 
     `Prescription Drug Insurance Account' (in this section 
     referred to as the `Account').
       ``(b) Amounts in Account.--
       ``(1) In general.--The Account shall consist of--
       ``(A) such amounts as may be deposited in, or appropriated 
     to, such fund as provided in this part; and
       ``(B) such gifts and bequests as may be made as provided in 
     section 201(i)(1).
       ``(2) Separation of funds.--Funds provided under this part 
     to the Account shall be kept separate from all other funds 
     within the Federal Supplemental Medical Insurance Trust Fund.
       ``(c) Payments From Account.--The Managing Trustee shall 
     pay from time to time from the Account such amounts as the 
     Secretary certifies are necessary to make the payments 
     provided for by this part, and the payments with respect to 
     administrative expenses in accordance with section 201(g).


                      ``administration of benefits

       ``Sec. 1860G. (a) In General.--The Secretary shall provide 
     for administration of the benefits under this part through a 
     contract with a private entity designated in accordance with 
     subsection (c), for enrolled individuals residing in each 
     service area designated pursuant to subsection (b) (other 
     than such individuals enrolled in a Medicare+Choice program 
     under part C), in accordance with the provisions of this 
     section.
       ``(b) Designation of Service Areas.--
       ``(1) In general.--The Secretary shall divide the total 
     geographic area served by the programs under this title into 
     at least 15 service areas for purposes of administration of 
     benefits under this part.
       ``(2) Considerations.--In determining or adjusting the 
     number and boundaries of service areas under this subsection, 
     the Secretary shall seek to ensure that--
       ``(A) there is a reasonable level of competition among 
     entities eligible to contract to administer the benefit 
     program under this section for each area;
       ``(B) the designation of areas is consistent with the goal 
     of securing contracts under this section with respect to the 
     maximum feasible number of areas so designated; and
       ``(C) the designation of areas will foster the existence of 
     a sufficient number of entities that are eligible and willing 
     to administer the benefits under this part.
       ``(c) Designation of Private Entity.--
       ``(1) Award and duration of contract.--
       ``(A) Competitive award.--Each contract for a service area 
     shall be awarded competitively in accordance with section 5 
     of title 41, United States Code, for a period (subject to 
     subparagraph (B)) of not less than 2 nor more than 5 years.
       ``(B) Review.--A contract for a service area shall be 
     subject to an evaluation after 2 years.
       ``(2) Eligible private entities.--A private entity eligible 
     for consideration as a private entity responsible for 
     administering the prescription drug benefit program under 
     this part in a service area shall meet at least the following 
     criteria:
       ``(A) Type.--The private entity shall be capable of 
     administering a prescription drug benefit program, and may be 
     a prescription drug vendor, wholesale and retail pharmacist 
     delivery system, health care provider or insurer, any other 
     type of entity as the Secretary may specify, or a consortium 
     of such entities.
       ``(B) Performance capability.--The entity shall have 
     sufficient expertise, personnel, and resources to perform 
     effectively the benefit administration functions for such 
     area.
       ``(C) Financial integrity.--The entity and its officers, 
     directors, agents, and managing employees shall have a 
     satisfactory record of professional competence and 
     professional and financial integrity, and the entity shall 
     have adequate financial resources to perform services under 
     the contract without risk of insolvency.
       ``(3) Proposal requirements.--
       ``(A) In general.--An entity's proposal for award or 
     renewal of a contract under this section shall include such 
     material and information as the Secretary may require.
       ``(B) Specific information.--A proposal described in 
     subparagraph (A) shall include a detailed description of--
       ``(i) the schedule of negotiated prices that will be 
     charged to enrollees;
       ``(ii) how the entity will deter medical errors that are 
     related to prescription drugs; and
       ``(iii) proposed contracts with local pharmacy providers 
     designed to ensure access, including compensation for local 
     pharmacists' services.
       ``(4) Exceptions to conflict of interest rules.--In 
     awarding contracts under this subsection, the Secretary may 
     waive conflict of interest rules generally applicable to 
     Federal acquisitions (subject to such safeguards as the 
     Secretary may find necessary to impose) in circumstances 
     where the Secretary finds that such waiver--
       ``(A) is not inconsistent with the purposes of the programs 
     under this title and the best interests of enrolled 
     individuals; and
       ``(B) will permit a sufficient level of competition for 
     such contracts, promote efficiency of benefits 
     administration, or otherwise serve the objectives of the 
     program under this part.
       ``(5) Maximizing competition.--In awarding contracts under 
     this section, the Secretary shall give consideration to the 
     need to maintain sufficient numbers of entities eligible and 
     willing to administer benefits under this part to ensure 
     vigorous competition for such contracts.
       ``(d) Functions of Private Entity.--The private entity for 
     a service area shall (or in the case of the function 
     described in paragraph (7), may) perform the following 
     functions:
       ``(1) Participation agreements, prices, and fees.--
       ``(A) Privately negotiated prices.--Each private entity 
     shall establish, through negotiations with drug manufacturers 
     and wholesalers and pharmacies, a schedule of prices for 
     covered prescription drugs.
       ``(B) Agreements with pharmacies.--Each private entity 
     shall enter into participation agreements under subsection 
     (e) with pharmacies, that include terms that--
       ``(i) secure the participation of sufficient numbers of 
     pharmacies to ensure convenient access (including adequate 
     emergency access); and
       ``(ii) permit the participation of any pharmacy in the 
     service area that meets the participation requirements 
     described in subsection (e).
       ``(C) Lists of prices and participating pharmacies.--Each 
     private entity shall ensure that the negotiated prices 
     established under subparagraph (A) and the list of pharmacies 
     with agreements under subsection (e) are regularly updated 
     and readily available in the service area to health care 
     professionals authorized to prescribe drugs, participating 
     pharmacies, and enrolled individuals.
       ``(2) Payment and coordination of benefits.--
       ``(A) Payment.--Each private entity shall--
       ``(i) administer claims for payment of benefits under this 
     part;
       ``(ii) determine amounts of benefit payments to be made; 
     and

[[Page S3843]]

       ``(iii) receive, disburse, and account for funds used in 
     making such payments, including through the activities 
     specified in the provisions of this paragraph.
       ``(B) Coordination.--Each private entity shall coordinate 
     with the Secretary, other private entities, pharmacies, and 
     other relevant entities as necessary to ensure appropriate 
     coordination of benefits with respect to enrolled 
     individuals, including coordination of access to and payment 
     for covered prescription drugs according to an individual's 
     in-service area plan provisions, when such individual is 
     traveling outside the home service area, and under such other 
     circumstances as the Secretary may specify.
       ``(C) Explanation of benefits.--Each private entity shall 
     furnish to enrolled individuals an explanation of benefits in 
     accordance with section 1806(a), and a notice of the balance 
     of benefits remaining for the current year, whenever 
     prescription drug benefits are provided under this part 
     (except that such notice need not be provided more often than 
     monthly).
       ``(3) Cost and utilization management; quality assurance.--
     Each private entity shall have in place effective cost and 
     utilization management, quality assurance measures, and 
     systems to reduce medical errors, including at least the 
     following, together with such additional measures as the 
     Secretary may specify:
       ``(A) Drug utilization review.--A drug utilization review 
     program conforming to the standards provided in section 
     1927(g)(2) (with such modifications as the Secretary finds 
     appropriate).
       ``(B) Fraud and abuse control.--Activities to control 
     fraud, abuse, and waste.
       ``(4) Education and information activities.--Each private 
     entity shall have in place mechanisms for disseminating 
     educational and informational materials to enrolled 
     individuals and health care providers designed to encourage 
     effective and cost-effective use of prescription drug 
     benefits and to ensure that enrolled individuals understand 
     their rights and obligations under the program.
       ``(5) Beneficiary protections.--
       ``(A) Confidentiality of health information.--Each private 
     entity shall have in effect systems to safeguard the 
     confidentiality of health care information on enrolled 
     individuals, which comply with section 1106 and with section 
     552a of title 5, United States Code, and meet such additional 
     standards as the Secretary may prescribe.
       ``(B) Grievance and appeal procedures.--Each private entity 
     have in place such procedures as the Secretary may specify 
     for hearing and resolving grievances and appeals brought by 
     enrolled individuals against the private entity or a pharmacy 
     concerning benefits under this part, which shall, to the 
     extent the Secretary finds necessary and appropriate, include 
     procedures equivalent to those specified in subsections (f) 
     and (g) of section 1852.
       ``(6) Records, reports, and audits of private entities.--
       ``(A) Records and audits.--Each private entity shall 
     maintain adequate records, and afford the Secretary access to 
     such records (including for audit purposes).
       ``(B) Reports.--Each private entity shall make such reports 
     and submissions of financial and utilization data as the 
     Secretary may require taking into account standard commercial 
     practices.
       ``(7) Proposal for alternative coinsurance amount.--
       ``(A) Submission.--Each private entity may submit a 
     proposal for increased Government cost-sharing for generic 
     prescription drugs, prescription drugs on the private 
     entity's formulary, or prescription drugs obtained through 
     mail order pharmacies.
       ``(B) Contents.--The proposal submitted under subparagraph 
     (A) shall contain evidence that such increased cost-sharing 
     would not result in an increase in aggregate costs to the 
     Account, including an analysis of differences in projected 
     drug utilization patterns by beneficiaries whose cost-sharing 
     would be reduced under the proposal and those making the 
     cost-sharing payments that would otherwise apply.
       ``(8) Other requirements.--Each private entity shall meet 
     such other requirements as the Secretary may specify.
       ``(e) Pharmacy Participation Agreements.--
       ``(1) In general.--A pharmacy that meets the requirements 
     of this subsection shall be eligible to enter an agreement 
     with a private entity to furnish covered prescription drugs 
     and pharmacists' services to enrolled individuals residing in 
     the service area.
       ``(2) Terms of agreement.--An agreement under this 
     subsection shall include the following terms and 
     requirements:
       ``(A) Licensing.--The pharmacy and pharmacists shall meet 
     (and throughout the contract period will continue to meet) 
     all applicable State and local licensing requirements.
       ``(B) Limitation on charges.--Pharmacies participating 
     under this part shall not charge an enrolled individual more 
     than the negotiated price for an individual drug as 
     established under subsection (d)(1), regardless of whether 
     such individual has attained the benefit limit under section 
     1860B(b), and shall not charge an enrolled individual more 
     than the individual's share of the negotiated price as 
     determined under the provisions of this part.
       ``(C) Performance standards.--The pharmacy shall comply 
     with performance standards relating to--
       ``(i) measures for quality assurance, reduction of medical 
     errors, and participation in the drug utilization review 
     program described in subsection (d)(3)(A);
       ``(ii) systems to ensure compliance with the 
     confidentiality standards applicable under subsection 
     (d)(5)(A); and
       ``(iii) other requirements as the Secretary may impose to 
     ensure integrity, efficiency, and the quality of the program.
       ``(f) Flexibility in Assigning Workload Among Private 
     Entities.--During the period after the Secretary has given 
     notice of intent to terminate a contract with a private 
     entity, the Secretary may transfer responsibilities of the 
     private entity under such contract to another private entity.
       ``(g) Special Attention to Rural and Hard-to-Serve Areas.--
       ``(1) In general.--The Secretary shall ensure that all 
     beneficiaries have access to the full range of 
     pharmaceuticals under this part, and shall give special 
     attention to access, pharmacist counseling, and delivery in 
     rural and hard-to-serve areas (as the Secretary may define by 
     regulation).
       ``(2) Special attention defined.--For purposes of paragraph 
     (1), the term `special attention' may include bonus payments 
     to retail pharmacists in rural areas, extra payments to the 
     private entity for the cost of rapid delivery of 
     pharmaceuticals, and any other actions the Secretary 
     determines are necessary to ensure full access to rural and 
     hard-to-serve beneficiaries.
       ``(3) GAO report.--Not later than 2 years after the 
     implementation of this part the Comptroller General of the 
     United States shall submit to Congress a report on the access 
     of medicare beneficiaries to pharmaceuticals and pharmacists' 
     services in rural and hard-to-serve areas under this part 
     together with any recommendations of the Comptroller General 
     regarding any additional steps the Secretary may need to take 
     to ensure the access of medicare beneficiaries to 
     pharmaceuticals and pharmacists' services in such areas under 
     this part.
       ``(h) Incentives for Cost and Utilization Management and 
     Quality Improvement.--The Secretary is authorized to include 
     in a contract awarded under subsection (c) such incentives 
     for cost and utilization management and quality improvement 
     as the Secretary may deem appropriate, including--
       ``(1) bonus and penalty incentives to encourage 
     administrative efficiency;
       ``(2) incentives under which private entities share in any 
     benefit savings achieved;
       ``(3) risk-sharing arrangements related to benefit 
     payments; and
       ``(4) any other incentive that the Secretary deems 
     appropriate and likely to be effective in managing costs or 
     utilization.


``employer incentive program for employment-based retiree drug coverage

       ``Sec. 1860H. (a) Program Authority.--The Secretary is 
     authorized to develop and implement a program under this 
     section called the `Employer Incentive Program' that 
     encourages employers and other sponsors of employment-based 
     health care coverage to provide adequate prescription drug 
     benefits to retired individuals and to maintain such existing 
     benefit programs, by subsidizing, in part, the sponsor's cost 
     of providing coverage under qualifying plans.
       ``(b) Sponsor Requirements.--In order to be eligible to 
     receive an incentive payment under this section with respect 
     to coverage of an individual under a qualified retiree 
     prescription drug plan (as defined in subsection (f)(3)), a 
     sponsor shall meet the following requirements:
       ``(1) Assurances.--The sponsor shall--
       ``(A) annually attest, and provide such assurances as the 
     Secretary may require, that the coverage offered by the 
     sponsor is a qualified retiree prescription drug plan, and 
     will remain such a plan for the duration of the sponsor's 
     participation in the program under this section; and
       ``(B) guarantee that it will give notice to the Secretary 
     and covered retirees--
       ``(i) at least 120 days before terminating its plan; and
       ``(ii) immediately upon determining that the actuarial 
     value of the prescription drug benefit under the plan falls 
     below the actuarial value of the insurance benefit under this 
     part.
       ``(2) Other requirements.--The sponsor shall provide such 
     information, and comply with such requirements, including 
     information requirements to ensure the integrity of the 
     program, as the Secretary may find necessary to administer 
     the program under this section.
       ``(c) Incentive Payment.--
       ``(1) In general.--A sponsor that meets the requirements of 
     subsection (b) with respect to a quarter in a calendar year 
     shall have payment made by the Secretary on a quarterly basis 
     (to the sponsor or, at the sponsor's direction, to the 
     appropriate employment-based health plan) of an incentive 
     payment, in the amount determined as described in paragraph 
     (2), for each retired individual (or spouse) who--
       ``(A) was covered under the sponsor's qualified retiree 
     prescription drug plan during such quarter; and
       ``(B) was eligible for but was not enrolled in the 
     insurance program under this part.
       ``(2) Amount of incentive.--The payment under this section 
     with respect to each individual described in paragraph (1) 
     for a month shall be equal to \2/3\ of the monthly premium 
     amount payable by an enrolled individual, as set for the 
     calendar year pursuant to section 1860D(a)(2).

[[Page S3844]]

       ``(3) Payment date.--The incentive under this section with 
     respect to a calendar quarter shall be payable as of the end 
     of the next succeeding calendar quarter.
       ``(d) Civil Money Penalties.--A sponsor, health plan, or 
     other entity that the Secretary determines has, directly or 
     through its agent, provided information in connection with a 
     request for an incentive payment under this section that the 
     entity knew or should have known to be false shall be subject 
     to a civil monetary penalty in an amount up to 3 times the 
     total incentive amounts under subsection (c) that were paid 
     (or would have been payable) on the basis of such 
     information.
       ``(e) Part D Enrollment for Certain Individuals Covered by 
     Employment-Based Retiree Health Coverage Plans.--
       ``(1) Eligible individuals.--An individual shall be given 
     the opportunity to enroll in the program under this part 
     during the period specified in paragraph (2) if--
       ``(A) the individual declined enrollment in the program 
     under this part at the time the individual first satisfied 
     section 1860C(a);
       ``(B) at that time, the individual was covered under a 
     qualified retiree prescription drug plan for which an 
     incentive payment was paid under this section; and
       ``(C)(i) the sponsor subsequently ceased to offer such 
     plan; or
       ``(ii) the value of prescription drug coverage under such 
     plan became less than the value of the coverage under the 
     program under this part.
       ``(2) Special enrollment period.--An individual described 
     in paragraph (1) shall be eligible to enroll in the program 
     under this part during the 6-month period beginning on the 
     first day of the month in which--
       ``(A) the individual receives a notice that coverage under 
     such plan has terminated (in the circumstance described in 
     paragraph (1)(C)(i)) or notice that a claim has been denied 
     because of such a termination; or
       ``(B) the individual received notice of the change in 
     benefits (in the circumstance described in paragraph 
     (1)(C)(ii)).
       ``(f) Definitions.--In this section:
       ``(1) Employment-based retiree health coverage.--The term 
     `employment-based retiree health coverage' means health 
     insurance or other coverage of health care costs for retired 
     individuals (or for such individuals and their spouses and 
     dependents) based on their status as former employees or 
     labor union members.
       ``(2) Employer.--The term `employer' has the meaning given 
     to such term by section 3(5) of the Employee Retirement 
     Income Security Act of 1974 (except that such term shall 
     include only employers of 2 or more employees).
       ``(3) Qualified retiree prescription drug plan.--The term 
     `qualified retiree prescription drug plan' means health 
     insurance coverage included in employment-based retiree 
     health coverage that--
       ``(A) provides coverage of the cost of prescription drugs 
     whose actuarial value to each retired beneficiary equals or 
     exceeds the actuarial value of the benefits provided to an 
     individual enrolled in the program under this part; and
       ``(B) does not deny, limit, or condition the coverage or 
     provision of prescription drug benefits for retired 
     individuals based on age or any health status-related factor 
     described in section 2702(a)(1) of the Public Health Service 
     Act.
       ``(4) Sponsor.--The term `sponsor' has the meaning given 
     the term `plan sponsor' by section 3(16)(B) of the Employee 
     Retirement Income Security Act of 1974.


           ``appropriations to cover government contributions

       ``Sec. 1860I. (a) In General.--There are authorized to be 
     appropriated from time to time, out of any moneys in the 
     Treasury not otherwise appropriated, to the Prescription Drug 
     Insurance Account, a Government contribution equal to--
       ``(1) the aggregate premiums payable for a month pursuant 
     to section 1860D(a)(2) by individuals enrolled in the program 
     under this part; plus
       ``(2) one-half the aggregate premiums payable for a month 
     pursuant to such section for such individuals by former 
     employers.
       ``(b) Appropriations To Cover Incentives for Employment-
     Based Retiree Drug Coverage.--There are authorized to be 
     appropriated to the Prescription Drug Insurance Account from 
     time to time, out of any moneys in the Treasury not otherwise 
     appropriated such sums as may be necessary for payment of 
     incentive payments under section 1860H(c).


                      ``prescription Drug Defined

       ``Sec. 1860J. As used in this part, the term `prescription 
     drug' means--
       ``(1) a drug that may be dispensed only upon a 
     prescription, and that is described in subparagraph (A)(i), 
     (A)(ii), or (B) of section 1927(k)(2); and
       ``(2) insulin certified under section 506 of the Federal 
     Food, Drug, and Cosmetic Act, and needles, syringes, and 
     disposable pumps for the administration of such insulin.''.
       (b) Study of Annual Open Enrollment.--
       (1) Study.--During 2002 and 2003, the Secretary shall 
     conduct a study on the feasibility and advisability of 
     establishing an annual open enrollment period for the program 
     under part D (as added by subsection (a)). Such study shall 
     reflect data reported by private entities administering 
     benefits under such part and shall include--
       (A) a review of the costs, effectiveness, and 
     administrative feasibility of an annual open enrollment 
     period for beneficiaries who--
       (i) previously declined enrollment; or
       (ii) who previously disenrolled and desire to reenroll;
       (B) an evaluation of a premium penalty for late enrollment 
     based on actuarially determined costs to the program of late 
     enrollment; and
       (C) a projection of the costs if open enrollment was 
     allowed without a penalty.
       (2) Report.--The Secretary shall prepare a report setting 
     forth the outcome of the study and may include in the report 
     a recommendation as to whether an annual open enrollment 
     period should be implemented under such part.
       (c) Conforming Amendments.--
       (1) Amendments to federal supplementary health insurance 
     trust fund.--Section 1841 of the Social Security Act (42 
     U.S.C. 1395t) is amended--
       (A) in the last sentence of subsection (a)--
       (i) by striking ``and'' after ``section 201(i)(1)''; and
       (ii) by inserting before the period the following: ``, and 
     such amounts as may be deposited in, or appropriated to, the 
     Prescription Drug Insurance Account established by section 
     1860F'';
       (B) in subsection (g), by inserting after ``by this part,'' 
     the following: ``the payments provided for under part D (in 
     which case the payments shall come from the Prescription Drug 
     Insurance Account in the Supplementary Medical Insurance 
     Trust Fund),'';
       (C) in the first sentence of subsection (h), by inserting 
     before the period the following: ``and section 1860D(b)(4) 
     (in which case the payments shall come from the Prescription 
     Drug Insurance Account in the Supplementary Medical Insurance 
     Trust Fund)''; and
       (D) in the first sentence of subsection (i)--
       (i) by striking ``and'' after ``section 1840(b)(1)''; and
       (ii) by inserting before the period the following: ``, 
     section 1860D(b)(2) (in which case the payments shall come 
     from the Prescription Drug Insurance Account in the 
     Supplementary Medical Insurance Trust Fund)''.
       (2) Prescription drug option under medicare+choice plans.--
       (A) Eligibility, election, and enrollment.--Section 1851 of 
     the Social Security Act (42 U.S.C. 1395w-21) is amended--
       (i) in subsection (a)(1)(A), by striking ``parts A and B'' 
     inserting ``parts A, B, and D''; and
       (ii) in subsection (i)(1), by striking ``parts A and B'' 
     and inserting ``parts A, B, and D''.
       (B) Voluntary beneficiary enrollment for drug coverage.--
     Section 1852(a)(1)(A) of such Act (42 U.S.C. 1395w-
     22(a)(1)(A)) is amended by inserting ``(and under part D to 
     individuals also enrolled under that part)'' after ``parts A 
     and B''.
       (C) Access to services.--Section 1852(d)(1) of such Act (42 
     U.S.C. 1395w-22(d)(1)) is amended--
       (i) in subparagraph (D), by striking ``and'' at the end;
       (ii) in subparagraph (E), by striking the period at the end 
     and inserting ``; and''; and
       (iii) by adding at the end the following new subparagraph:
       ``(F) the plan for prescription drug benefits under part D 
     guarantees coverage of any specifically named covered 
     prescription drug for an enrollee, when prescribed by a 
     physician in accordance with the provisions of such part, 
     regardless of whether such drug would otherwise be covered 
     under an applicable formulary or discount arrangement.''.
       (D) Payments to organizations.--Section 1853(a)(1)(A) of 
     such Act (42 U.S.C. 1395w-23(a)(1)(A)) is amended--
       (i) by inserting ``determined separately for benefits under 
     parts A and B and under part D (for individuals enrolled 
     under that part)'' after ``as calculated under subsection 
     (c)'';
       (ii) by striking ``that area, adjusted for such risk 
     factors'' and inserting ``that area. In the case of payment 
     for benefits under parts A and B, such payment shall be 
     adjusted for such risk factors as''; and
       (iii) by inserting before the last sentence the following: 
     ``In the case of the payments for benefits under part D, such 
     payment shall initially be adjusted for the risk factors of 
     each enrollee as the Secretary determines to be feasible and 
     appropriate. By 2006, the adjustments would be for the same 
     risk factors applicable for benefits under parts A and B.''.
       (E) Calculation of annual medicare +choice capitation 
     rates.--Section 1853(c) of such Act (42 U.S.C. 1395w-23(c)) 
     is amended--
       (i) in paragraph (1), in the matter preceding subparagraph 
     (A), by inserting ``for benefits under parts A and B'' after 
     ``capitation rate'';
       (ii) in paragraph (6)(A), by striking ``rate of growth in 
     expenditures under this title'' and inserting ``rate of 
     growth in expenditures for benefits available under parts A 
     and B''; and
       (iii) by adding at the end the following new paragraph:
       ``(8) Payment for prescription drugs.--The Secretary shall 
     determine a capitation rate for prescription drugs--
       ``(A) dispensed in 2002, which is based on the projected 
     national per capita costs for prescription drug benefits 
     under part D and associated claims processing costs for 
     beneficiaries under the original medicare fee-for-service 
     program; and

[[Page S3845]]

       ``(B) dispensed in each subsequent year, which shall be 
     equal to the rate for the previous year updated by the 
     Secretary's estimate of the projected per capita rate of 
     growth in expenditures under this title for an individual 
     enrolled under part D.''.
       (F) Limitation on enrollee liability.--Section 1854(e) of 
     such Act (42 U.S.C. 1395w-24(e)) is amended by adding at the 
     end the following new paragraph:
       ``(5) Special rule for provision of part d benefits.--In no 
     event may a Medicare+Choice organization include as part of a 
     plan for prescription drug benefits under part D a 
     requirement that an enrollee pay a deductible, or a 
     coinsurance percentage that exceeds 50 percent.''.
       (G) Requirement for additional benefits.--Section 
     1854(f)(1) of such Act (42 U.S.C. 1395w-24(f)(1)) is amended 
     by adding at the end the following new sentence: ``Such 
     determination shall be made separately for benefits under 
     parts A and B and for prescription drug benefits under part 
     D.''.
       (H) Protections against fraud and beneficiary 
     protections.--Section 1857(d) is amended by adding at the end 
     the following new paragraph:
       ``(6) Availability of negotiated prices.--Each contract 
     under this section shall provide that enrollees who exhaust 
     prescription drug benefits under the plan will continue to 
     have access to prescription drugs at negotiated prices 
     equivalent to the total combined cost of such drugs to the 
     plan and the enrollee prior to such exhaustion of 
     benefits.''.
       (3) Exclusions from coverage.--
       (A) Application to part d.--Section 1862(a) of the Social 
     Security Act (42 U.S.C. 1395y(a)) is amended in the matter 
     preceding paragraph (1) by striking ``part A or part B'' and 
     inserting ``part A, B, or D''.
       (B) Prescription drugs not excluded from coverage if 
     appropriately prescribed.--Section 1862(a)(1) of such Act (42 
     U.S.C. 1395y(a)(1)) is amended--
       (i) in subparagraph (H), by striking ``and'' at the end;
       (ii) in subparagraph (I), by striking the semicolon at the 
     end and inserting ``, and''; and
       (iii) by adding at the end the following new subparagraph:
       ``(J) in the case of prescription drugs covered under part 
     D, which are not prescribed in accordance with such part;''.

     SEC. 102. MEDICAID BUY-IN OF MEDICARE PRESCRIPTION DRUG 
                   COVERAGE FOR CERTAIN LOW-INCOME INDIVIDUALS.

       (a) State Option To Buy-In Dually Eligible Individuals.--
       (1) Coverage of premiums as medical assistance.--Section 
     1905(a) of the Social Security Act (42 U.S.C. 1396d) is 
     amended in the second sentence of the flush matter at the end 
     by striking ``premiums under part B'' the first place it 
     appears and inserting ``premiums under parts B and D''.
       (2) State commitment to continue participation in part d 
     after benefit limit reached.--Section 1902(a) of such Act (42 
     U.S.C. 1396a) is amended--
       (A) by striking ``and'' at the end of paragraph (64);
       (B) by striking the period at the end of paragraph (65)(B) 
     and inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(66) provide that in the case of any individual whose 
     eligibility for medical assistance is not limited to medicare 
     or medicare drug cost-sharing and for whom the State elects 
     to pay premiums under part D of title XVIII pursuant to 
     section 1860E, the State will purchase all prescription drugs 
     for such individual in accordance with the provisions of such 
     part D, without regard to whether the benefit limit for such 
     individual under section 1860B(b) has been reached.''.
       (b) Medicare Cost-Sharing Required for Qualified Medicare 
     Beneficiaries.--Section 1905(p)(3) of the Social Security Act 
     (42 U.S.C. 1396d(p)(3)) is amended--
       (1) in subparagraph (A)--
       (A) in clause (i), by striking ``and'' at the end;
       (B) in clause (ii), by inserting ``and'' at the end; and
       (C) by adding at the end the following new clause:
       ``(iii) premiums under section 1860D.''; and
       (2) in subparagraph (D)--
       (A) by inserting ``(i)'' after ``(D)''; and
       (B) by adding at the end the following:
       ``(ii) The difference between the amount that is paid under 
     section 1860B and the amount that would be paid under such 
     section if any reference to `50 percent' therein were deemed 
     a reference to `100 percent' (or, if the Secretary approves a 
     higher percentage under such section, if such percentage were 
     deemed to be 100 percent).''.
       (c) Medicare Drug Cost-Sharing Required for Medicare-
     Eligible Individuals With Incomes Between 100 and 150 Percent 
     of Poverty Line.--
       (1) Definitions of eligible beneficiaries and coverage.--
     Section 1905 of the Social Security Act (42 U.S.C. 1396d) is 
     amended by adding at the end the following new subsection:
       ``(x)(1) The term `qualified medicare drug beneficiary' 
     means an individual--
       ``(A) who is entitled to hospital insurance benefits under 
     part A of title XVIII (including an individual entitled to 
     such benefits pursuant to an enrollment under section 1818, 
     but not including an individual entitled to such benefits 
     only pursuant to an enrollment under section 1818A);
       ``(B) whose income (as determined under section 1612 for 
     purposes of the supplemental security income program, except 
     as provided in subsection (p)(2)(D)) is above 100 percent but 
     below 150 percent of the official poverty line (as defined by 
     the Office of Management and Budget, and revised annually in 
     accordance with section 673(2) of the Omnibus Budget 
     Reconciliation Act of 1981) applicable to a family of the 
     size involved; and
       ``(C) whose resources (as determined under section 1613 for 
     purposes of the supplemental security income program) do not 
     exceed twice the maximum amount of resources that an 
     individual may have and obtain benefits under that program.
       ``(2) The term `medicare drug cost-sharing' means the 
     following costs incurred with respect to a qualified medicare 
     drug beneficiary, without regard to whether the costs 
     incurred were for items and services for which medical 
     assistance is otherwise available under the plan:
       ``(A) In the case of a qualified medicare drug beneficiary 
     whose income (as determined under paragraph (1)) is less than 
     135 percent of the official poverty line--
       ``(i) premiums under section 1860D; and
       ``(ii) the difference between the amount that is paid under 
     section 1860B and the amount that would be paid under such 
     section if any reference to `50 percent' therein were deemed 
     a reference to `100 percent' (or, if the Secretary approves a 
     higher percentage under such section, if such percentage were 
     deemed to be 100 percent).
       ``(B) In the case of a qualified medicare drug beneficiary 
     whose income (as determined under paragraph (1)) is at least 
     135 percent but less than 150 percent of the official poverty 
     line, a percentage of premiums under section 1860D, 
     determined on a linear sliding scale ranging from 100 percent 
     for individuals with incomes at 135 percent of such line to 0 
     percent for individuals with incomes at 150 percent of such 
     line.
       ``(3) In the case of any State which is providing medical 
     assistance to its residents under a waiver granted under 
     section 1115, the Secretary shall require the State to meet 
     the requirement of section 1902(a)(10)(E) in the same manner 
     as the State would be required to meet such requirement if 
     the State had in effect a plan approved under this title.''.
       (2) State plan requirement.--Section 1902(a)(10)(E) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)(E)) is amended--
       (A) in clause (iii), by striking ``and'' at the end; and
       (B) by adding at the end the following new clause:
       ``(v) for making medical assistance available for medicare 
     drug cost-sharing (as defined in section 1905(x)(2)) for 
     qualified medicare drug beneficiaries described in section 
     1905(x)(1); and''.
       (3) 100 percent federal matching of state medical 
     assistance costs for medicare drug cost-sharing.--Section 
     1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) is 
     amended--
       (A) by redesignating paragraph (7) as paragraph (8); and
       (B) by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) except in the case of amounts expended for an 
     individual whose eligibility for medical assistance is not 
     limited to medicare or medicare drug cost-sharing, an amount 
     equal to 100 percent of amounts as expended as medicare drug 
     cost-sharing for qualified medicare drug beneficiaries (as 
     defined in section 1905(x)); plus''.
       (d) Medicaid Drug Price Rebates Unavailable With Respect to 
     Drugs Purchased Through Medicare Buy-In.--Section 1927 of the 
     Social Security Act (42 U.S.C. 1396r-8) is amended by adding 
     at the end the following new subsection:
       ``(l) Drugs Purchased Through Medicare Buy-In.--The 
     provisions of this section shall not apply to prescription 
     drugs purchased under part D of title XVIII pursuant to an 
     agreement with the Secretary under section 1860E (including 
     any drugs so purchased after the limit under section 1860B(b) 
     has been exceeded).''.
       (e) Amendments to Medicare Part D.--Part D of title XVIII 
     of the Social Security Act (as added by section 2) is amended 
     by inserting after section 1860D the following new section:


 ``special eligibility, enrollment, and copayment rules for low-income 
                              individuals

       ``Sec. 1860E. (a) State Agreements for Coverage.--
       ``(1) In general.--The Secretary shall, at the request of a 
     State, enter into an agreement with the State under which all 
     individuals described in paragraph (2) are enrolled in the 
     program under this part, without regard to whether any such 
     individual has previously declined the opportunity to enroll 
     in such program.
       ``(2) Eligibility groups.--The individuals described in 
     this paragraph, for purposes of paragraph (1), are 
     individuals who satisfy section 1860C(a) and who are--
       ``(A)(i) eligible individuals within the meaning of section 
     1843; and
       ``(ii) in a coverage group or groups permitted under 
     section 1843 (as selected by the State and specified in the 
     agreement); or
       ``(B) qualified medicare drug beneficiaries (as defined in 
     section 1905(v)(1)).
       ``(3) Coverage period.--The period of coverage under this 
     part of an individual enrolled under an agreement under this 
     subsection shall be as follows:

[[Page S3846]]

       ``(A) Individuals eligible (at state option) for part b 
     buy-in.--In the case of an individual described in subsection 
     (a)(2)(A), the coverage period shall be the same period that 
     applies (or would apply) pursuant to section 1843(d).
       ``(B) Qualified medicare drug beneficiaries.--In the case 
     of an individual described in subsection (a)(2)(B)--
       ``(i) the coverage period shall begin on the latest of--

       ``(I) January 1, 2002;
       ``(II) the first day of the third month following the month 
     in which the State agreement is entered into; or
       ``(III) the first day of the first month following the 
     month in which the individual satisfies section 1860C(a); and

       ``(ii) the coverage period shall end on the last day of the 
     month in which the individual is determined by the State to 
     have become ineligible for medicare drug cost-sharing.
       ``(b) Special Part D Enrollment Opportunity for Individuals 
     Losing Medicaid Eligibility.--In the case of an individual 
     who--
       ``(1) satisfies section 1860C(a); and
       ``(2) loses eligibility for benefits under the State plan 
     under title XIX after having been enrolled under such plan or 
     having been determined eligible for such benefits;

     the Secretary shall provide an opportunity for enrollment 
     under the program under this part during the period that 
     begins on the date that such individual loses such 
     eligibility and ends on the date specified by the Secretary.
       ``(c) Definition.--For purposes of this section, the term 
     `State' has the meaning given such term under section 1101(a) 
     for purposes of title XIX.''.
       (f) Removal of Sunset Date for Cost-Sharing in Medicare 
     Part B Premiums for Certain Qualifying Individuals.--
       (1) In general.--Section 1902(a)(10)(E)(iv) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(E)(iv))is amended to 
     read as follows--
       ``(iv) subject to section 1905(p)(4), for making medical 
     assistance available for medicare cost-sharing described in 
     section 1905(p)(3)(A)(ii) for individuals who would be 
     qualified medicare beneficiaries described in section 
     1905(p)(1) but for the fact that their income exceeds the 
     income level established by the State under section 
     1905(p)(2) and is at least 120 percent, but less than 135 
     percent, of the official poverty line (referred to in such 
     section) for a family of the size involved and who are not 
     otherwise eligible for medical assistance under the State 
     plan;''.
       (2) Relocation of provision requiring 100 percent federal 
     matching of state medical assistance costs for certain 
     qualifying individuals.--Section 1903(a) of the Social 
     Security Act (42 U.S.C. 1396b(a)), as amended by subsection 
     (c)(3), is amended--
       (A) by redesignating paragraph (8) as paragraph (9); and
       (B) by inserting after paragraph (7) the following new 
     paragraph:
       ``(8) an amount equal to 100 percent of amounts as expended 
     as medicare drug cost-sharing for individuals described in 
     section 1903(a)(10)(E)(iv); plus''.
       (3) Repeal of section 1933.--Section 1933 is repealed.
       (4) Effective date.--The amendments made by this subsection 
     shall take effect on January 1, 2002.

     SEC. 103. CATASTROPHIC PRESCRIPTION DRUG COVERAGE BENEFIT.

       (a) Recommendations With Respect to a Medicare Catastrophic 
     Drug Benefit.--
       (1) In general.--Not later than 6 months after the date of 
     enactment of this Act, the Secretary of Health and Human 
     Services (in this section referred to as the ``Secretary'') 
     shall submit to the Committee on Finance of the Senate and 
     the Committee on Ways and Means and the Committee on Commerce 
     of the House of Representatives detailed recommendations on 
     structuring a catastrophic drug benefit for medicare 
     beneficiaries.
       (2) Recommendations described.--The recommendations under 
     paragraph (1) shall--
       (A) ensure coverage of the costs of prescription drugs 
     above a specified level of out-of-pocket expenditures;
       (B) conform to the administrative structure established in 
     this Act;
       (C) have a projected cost that does not exceed the amounts 
     described in subsection (b)(3)(A); and
       (D) take effect no later than January 1, 2003.
       (3) Final regulations.--
       (A) In general.--If legislation of a medicare catastrophic 
     drug benefit is not enacted that meets the requirements of 
     paragraph (2) by June 1, 2001, the Secretary of Health and 
     Human Services shall promulgate final regulations containing 
     such standards no later than January 1, 2002.
       (B) Certification by omb and hcfa.--A final regulation 
     promulgated by the Secretary under subparagraph (A) shall not 
     take effect unless the Director of the Office of Management 
     and Budget and the Chief Actuary of the Health Care Financing 
     Administration certify that aggregate Federal expenses 
     incurred in providing the catastrophic drug benefit under 
     this section will not exceed $50,000,000,000 between fiscal 
     years 2003 and 2010. If either certification is not provided, 
     the Secretary shall submit a revised recommendation on 
     structuring a catastrophic drug benefit to the appropriate 
     committees of Congress under paragraph (1) no later than 30 
     days after the Secretary receives a notification that such 
     certification will not be provided.
       (b) Catastrophic Prescription Drug Coverage Reserve Fund.--
       (1) Establishment of reserve fund.--There is established a 
     reserve fund which shall be known as the ``Catastrophic 
     Prescription Drug Coverage Reserve Fund'' (in this subsection 
     referred to as the ``Reserve Fund'').
       (2) Amounts in reserve fund.--Subject to subparagraph (B), 
     the Reserve Fund shall consist of such amounts as are 
     appropriated to the Reserve Fund under paragraph (3).
       (3) Appropriation to reserve fund.--
       (A) In general.--
       (i) Fiscal years 2003 through 2010.--There are appropriated 
     to the Reserve Fund for the period beginning with fiscal year 
     2003 and ending with fiscal year 2010, $50,000,000,000.
       (ii) Subsequent fiscal years.--There are authorized to be 
     appropriated to the Reserve Fund for each subsequent fiscal 
     year, such sums as may be necessary to carry out the 
     provisions of this section.
       (B) Availability.--Sums appropriated under subparagraph 
     (A)(i) shall remain available, without fiscal year 
     limitation, until expended.

     SEC. 104. COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG COVERAGE FOR 
                   TRANSPLANT PATIENTS.

       (a) Revision of Medicare Coverage for Immunosuppressive 
     Drugs.--
       (1) In general.--Section 1861(s)(2)(J) of the Social 
     Security Act (42 U.S.C. 1395x(s)(2)(J)) (as amended by 
     section 227(a) of the Medicare, Medicaid, and SCHIP Balanced 
     Budget Refinement Act of 1999 (113 Stat. 1501A-354), as 
     enacted into law by section 1000(a)(6) of Public Law 106-113) 
     is amended by striking ``, to an individual who receives'' 
     and all that follows before the semicolon at the end and 
     inserting ``to an individual who has received an organ 
     transplant''.
       (2) Conforming amendments.--
       (A) Section 1832 of the Social Security Act (42 U.S.C. 
     1395k) (as amended by section 227(b) of the Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 
     (113 Stat. 1501A-354), as enacted into law by section 
     1000(a)(6) of Public Law 106-113) is amended--
       (i) by striking subsection (b); and
       (ii) by redesignating subsection (c) as subsection (b).
       (B) Subsections (c) and (d) of section 227 of the Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 
     (113 Stat. 1501A-355), as enacted into law by section 
     1000(a)(6) of Public Law 106-113, are repealed.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to drugs furnished on or after the date of 
     enactment of this Act.
       (b) Extension of Certain Secondary Payer Requirements.--
     Section 1862(b)(1)(C) of the Social Security Act (42 U.S.C. 
     1395y(b)(1)(C)) is amended by adding at the end the 
     following: ``With regard to immunosuppressive drugs furnished 
     on or after the date of enactment of the Medicare Expansion 
     for Needed Drugs (MEND) Act of 2000, this subparagraph shall 
     be applied without regard to any time limitation.''.

     SEC. 105. GAO STUDY AND BIENNIAL REPORTS ON COMPETITION AND 
                   SAVINGS.

       (a) Ongoing Study.--The Comptroller General of the United 
     States shall conduct an ongoing study and analysis of the 
     prescription drug benefit program under part D of the 
     medicare program under title XVIII of the Social Security Act 
     (as added by this title), including an analysis of--
       (1) the extent to which the competitive bidding process 
     under such program fosters maximum competition and 
     efficiency; and
       (2) the savings to the medicare program resulting from such 
     prescription drug benefit program, including the reduction in 
     the number or length of hospital visits.
       (b) Initial Report.--Not later than September 1, 2001, the 
     Comptroller General shall submit to Congress a report on the 
     extent to which the competitive bidding process under the 
     prescription drug benefit program under part D of the 
     medicare program under title XVIII of the Social Security Act 
     (as added by this title) is expected to foster maximum 
     competition and efficiency.
       (c) Biennial Reports.--Not later than January 1, 2004, and 
     biennially thereafter, the Comptroller General of the United 
     States shall submit to Congress a report on the results of 
     the study conducted under this section, together with any 
     recommendations for legislation that the Comptroller General 
     determines to be appropriate as a result of such study.

     SEC. 106. MEDPAC STUDY AND ANNUAL REPORTS ON THE 
                   PHARMACEUTICAL MARKET, PHARMACIES, AND 
                   BENEFICIARY ACCESS.

       (a) Ongoing Study.--The Medicare Payment Advisory 
     Commission established under section 1805 of the Social 
     Security Act (42 U.S.C. 1395b-6) shall conduct an ongoing 
     study and analysis of the prescription drug benefit program 
     under part D of the Social Security Act (as added by this 
     title), including an analysis of the impact of the 
     prescription drug benefit program on--
       (1) the pharmaceutical market, including costs and pricing 
     of pharmaceuticals, beneficiary access to such 
     pharmaceuticals, and trends in research and development;
       (2) franchise, independent, and rural pharmacies; and
       (3) beneficiary access to prescription drugs, including an 
     assessment of--
       (A) out-of-pocket spending;

[[Page S3847]]

       (B) generic and brand-name utilization; and
       (C) pharmacists' services.
       (b) Report.--Not later than January 1, 2004, and annually 
     thereafter, the Medicare Payment Advisory Commission shall 
     submit to Congress a report on the results of the study 
     conducted under this section, together with any 
     recommendations for legislation that such Commission 
     determines to be appropriate as a result of such study.

             TITLE II--ENHANCED MEDICARE PREVENTION PROGRAM

     SEC. 201. MEDPAC BIENNIAL REPORT.

       (a) In General.--Section 1805(b) of the Social Security Act 
     (42 U.S.C. 1395b-6(b)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (C), by striking ``and'' at the end;
       (B) in subparagraph (D), by striking the period and 
     inserting ``; and''; and
       (C) by adding at the end the following new subparagraph:
       ``(E) by not later than January 1, 2002, and biennially 
     thereafter, submit the report to Congress described in 
     paragraph (7).''; and
       (2) by adding at the end the following new paragraph:
       ``(7) Evaluation of actuarial equivalence of medicare and 
     private sector benefit packages.--
       ``(A) Evaluation.--The Commission shall--
       ``(i) evaluate the benefit package offered under the 
     medicare program under this title; and
       ``(ii) determine the degree to which such benefit package 
     is actuarially equivalent to that offered by health benefit 
     programs available in the private sector to individuals over 
     age 65.
       ``(B) Report.--The Commission shall submit a report to 
     Congress that shall contain--
       ``(i) a detailed statement of the findings and conclusions 
     of the Commission regarding the evaluation conducted under 
     subparagraph (A);
       ``(ii) the recommendations of the Commission regarding 
     changes in the benefit package offered under the medicare 
     program under this title that would keep the program modern 
     and competitive in relation to health benefit programs 
     available in the private sector; and
       ``(iii) the recommendations of the Commission for such 
     legislation and administrative actions as it considers 
     appropriate.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

     SEC. 202. NATIONAL INSTITUTE ON AGING STUDY AND REPORT.

       (a) Studies.--The Director of the National Institute on 
     Aging shall conduct 1 or more studies focusing on ways to--
       (1) improve quality of life for the elderly;
       (2) develop better ways to prevent or delay the onset of 
     age-related functional decline and disease and disability 
     among the elderly; and
       (3) develop means of assessing the long-term development of 
     cost-effective benefits and cost-savings benefits for health 
     promotion and disease prevention among the elderly.
       (b) Report.--Not later than January 1, 2006, the Director 
     of the National Institute on Aging shall submit a report to 
     the Secretary regarding each study conducted under subsection 
     (a) and containing a detailed statement of research findings 
     and conclusions that are scientifically valid and are 
     demonstrated to prevent or delay the onset of chronic illness 
     or disability among the elderly.
       (c) Transmission to Institute of Medicine.--Upon receipt of 
     each report described in subsection (b), the Secretary shall 
     transmit such report to the Institute of Medicine of the 
     National Academy of Sciences for consideration in its effort 
     to conduct the comprehensive study of current literature and 
     best practices in the field of health promotion and disease 
     prevention among the medicare beneficiaries described in 
     section 204.
       (d) Authorization of Appropriations.--
       (1) In general.--There are authorized to be appropriated 
     $100,000,000 for fiscal years 2001 through 2006 to carry out 
     the purposes of this section.
       (2) Availability.--Any sums appropriated under the 
     authorization contained in this subsection shall remain 
     available, without fiscal year limitation, until September 
     30, 2005.

     SEC. 203. INSTITUTE OF MEDICINE 5-YEAR MEDICARE PREVENTION 
                   BENEFIT STUDY AND REPORT.

       (a) Study.--
       (1) In general.--The Secretary shall contract with the 
     Institute of Medicine of the National Academy of Sciences to 
     conduct a comprehensive study of current literature and best 
     practices in the field of health promotion and disease 
     prevention among medicare beneficiaries including the issues 
     described in paragraph (2) and to submit the report described 
     in subsection (b).
       (2) Issues studied.--The study required under paragraph (1) 
     shall include an assessment of--
       (A) whether each covered benefit is--
       (i) medically effective; and
       (ii) a cost-effective benefit or a cost-saving benefit;
       (B) utilization of covered benefits (including any barriers 
     to or incentives to increase utilization); and
       (C) quality of life issues associated with both health 
     promotion and disease prevention benefits covered under the 
     medicare program and those that are not covered under such 
     program that would affect all medicare beneficiaries.
       (b) Report.--
       (1) In general.--Not later than 5 years after the date of 
     enactment of this section, and every fifth year thereafter, 
     the Institute of Medicine of the National Academy of Sciences 
     shall submit to the President a report that contains a 
     detailed statement of the findings and conclusions of the 
     study conducted under subsection (a) and the recommendations 
     for legislation described in paragraph (2).
       (2) Recommendations for legislation.--The Institute of 
     Medicine of the National Academy of Sciences, in consultation 
     with the Partnership for Prevention, shall develop 
     recommendations in legislative form that--
       (A) prioritize the preventive benefits under the medicare 
     program; and
       (B) modify preventive benefits offered under the medicare 
     program based on the study conducted under subsection (a).
       (c) Transmission to Congress.--
       (1) In general.--On the day on which the report described 
     in subsection (b) is submitted to the President, the 
     President shall transmit the report and recommendations in 
     legislative form described in subsection (b)(2) to Congress.
       (2) Delivery.--Copies of the report and recommendations in 
     legislative form required to be transmitted to Congress under 
     paragraph (1) shall be delivered--
       (A) to both Houses of Congress on the same day;
       (B) to the Clerk of the House of Representatives if the 
     House of Representatives is not in session; and
       (C) to the Secretary of the Senate if the Senate is not in 
     session.

     SEC. 204. FAST-TRACK CONSIDERATION OF PREVENTION BENEFIT 
                   LEGISLATION.

       (a) Rules of House of Representatives and Senate.--This 
     section is enacted by Congress--
       (1) as an exercise of the rulemaking power of the House of 
     Representatives and the Senate, respectively, and is deemed a 
     part of the rules of each House of Congress, but--
       (A) is applicable only with respect to the procedure to be 
     followed in that House of Congress in the case of an 
     implementing bill (as defined in subsection (d)); and
       (B) supersedes other rules only to the extent that such 
     rules are inconsistent with this section; and
       (2) with full recognition of the constitutional right of 
     either House of Congress to change the rules (so far as 
     relating to the procedure of that House of Congress) at any 
     time, in the same manner and to the same extent as in the 
     case of any other rule of that House of Congress.
       (b) Introduction and Referral.--
       (1) Introduction.--
       (A) In general.--Subject to paragraph (2), on the day on 
     which the President transmits the report pursuant to section 
     203(c) to the House of Representatives and the Senate, the 
     recommendations in legislative form transmitted by the 
     President with respect to such report shall be introduced as 
     a bill (by request) in the following manner:
       (i) House of representatives.--In the House of 
     Representatives, by the Majority Leader, for himself and the 
     Minority Leader, or by Members of the House of 
     Representatives designated by the Majority Leader and 
     Minority Leader.
       (ii) Senate.--In the Senate, by the Majority Leader, for 
     himself and the Minority Leader, or by Members of the Senate 
     designated by the Majority Leader and Minority Leader.
       (B) Special rule.--If either House of Congress is not in 
     session on the day on which such recommendations in 
     legislative form are transmitted, the recommendations in 
     legislative form shall be introduced as a bill in that House 
     of Congress, as provided in subparagraph (A), on the first 
     day thereafter on which that House of Congress is in session.
       (2) Referral.--Such bills shall be referred by the 
     presiding officers of the respective Houses to the 
     appropriate committee, or, in the case of a bill containing 
     provisions within the jurisdiction of 2 or more committees, 
     jointly to such committees for consideration of those 
     provisions within their respective jurisdictions.
       (c) Consideration.--After the recommendations in 
     legislative form have been introduced as a bill and referred 
     under subsection (b), such implementing bill shall be 
     considered in the same manner as an implementing bill is 
     considered under subsections (d), (e), (f), and (g) of 
     section 151 of the Trade Act of 1974 (19 U.S.C. 2191).
       (d) Implementing Bill Defined.--In this section, the term 
     ``implementing bill'' means only the recommendations in 
     legislative form of the Institute of Medicine of the National 
     Academy of Sciences described in section 203(b)(2), 
     transmitted by the President to the House of Representatives 
     and the Senate under section 203(c), and introduced and 
     referred as provided in subsection (b) as a bill of either 
     House of Congress.
       (e) Counting of Days.--For purposes of this section, any 
     period of days referred to in section 151 of the Trade Act of 
     1974 shall be computed by excluding--
       (1) the days on which either House of Congress is not in 
     session because of an adjournment of more than 3 days to a 
     day certain or an adjournment of Congress sine die; and

[[Page S3848]]

       (2) any Saturday and Sunday, not excluded under paragraph 
     (1), when either House is not in session.

  Mr. KENNEDY. Mr. President, Senator Daschle, Senator Moynihan, and I, 
and the majority of the members of our caucus are introducing 
legislation to provide prescription drug coverage under Medicare. It is 
a program supported not only by the Senate Democrats but by House 
Democrats and the President as well. Senior citizens deserve 
prescription drug coverage under Medicare. Democrats are committed to 
providing it and providing it this year.
  It is long past time for Congress to mend the broken promise of 
Medicare. Medicare is a guarantee of affordable health care for every 
senior citizen, but that promise is being broken every day because 
Medicare does not cover prescription drugs. The need is urgent. Too 
many elderly citizens face an impossible choice between food on the 
table and medicine they need to stay healthy or to treat their 
illnesses. They take half the pills their doctors prescribe, or do not 
even fill a needed prescription at all because they cannot afford the 
high cost of the prescription.
  They pay twice as much for the drugs they need because they pay full 
price, while almost everyone with private insurance pays less because 
of negotiated discounts. Too many seniors end up in the hospital at 
immense cost to Medicare because they cannot afford the drugs they 
need, or can't afford to take them correctly.
  Opponents say we cannot afford this coverage, in spite of the budget 
surplus. The issue is priorities. Health care for the elderly is more 
important than new tax breaks for the wealthy.
  Others say this coverage should be available only to the elderly who 
are poor. But senior citizens want Medicare, not welfare. They should 
not be forced into poverty in order to obtain the medications they 
need.
  The ongoing revolution in health care makes this coverage more 
essential now than ever. Coverage of prescription drugs under Medicare 
is as critical today as coverage of hospital and doctor care. Senior 
citizens need help now. The President knows it, Democrats and the House 
and Senate know it, senior citizens know it, and so do their children 
and grandchildren.
  Congress should listen to their choices. The time for excuses is 
over. The time for action is now.
  I will take a few moments of the Senate's time to review where we are 
on the issue of Medicare and Medicare coverage. This chart shows the 
number of senior citizens who have prescription drug coverage.

       Senior citizens lack affordable, reliable, quality 
     coverage.

  The only group of senior citizens who have coverage today that is 
reliable, affordable, and dependable are the 4 million seniors covered 
under Medicaid. Today, we have 12 million senior citizens who 
effectively have no coverage at all; that is a third of all of our 
senior citizens. Eleven million seniors have employer sponsored 
coverage, and I will come back to that because employer sponsored 
coverage is disappearing.
  Three million seniors have coverage under Medicare HMOs, 4 million 
are covered under Medigap--and we will examine that particular 
phenomenon--4 million under Medicaid, and 3 million now switched plans 
during the year or have other coverage.
  We have a about a third who have no coverage whatsoever. Another 
third have employer-sponsored coverage, but we are finding that this 
coverage is declining rapidly. Medicare HMO coverage is also declining, 
and Medigap coverage is often unaffordable. That is the current 
situation. Let's look a little further. If we look at the income of 
senior citizens, what we see is that 57 percent of senior citizens have 
incomes under $15,000; 21 percent have incomes above $15,000 but under 
$25,000. If you add those together, obviously 78 percent are below 
$25,000. Elderly people in our country have very modest means--very, 
very modest means.
  The average income for a person over 65 is just above $13,000. The 
cost of coverage is going up. I just showed a chart of the different 
types of coverage we had, pointing out one-third of our senior citizens 
have no coverage, and another third have health coverage that is 
related to their former job. The next chart shows firms offering 
retiree health coverage.

  The chart indicates coverage ``drops 25 percent.''
  There was a 25-percent drop in employers covering prescription drugs 
for their retirees in the 3 years from 1994 to 1997. This is a dramatic 
reduction in coverage.
  Remember I showed the other chart that said a third had coverage 
through employer sponsored retiree benefits? This shows that the number 
of firms offering retiree health benefits is dropping absolutely 
dramatically.
  We saw there were a number of our senior citizens, about 4 million, 
who had coverage through Medicare HMOs. Look at what is happening to 
Medicare HMO coverage. It is inadequate and unreliable.
  First of all, the drug benefit is offered only at the option of HMOs, 
so some HMOs offer coverage and others do not. More than 325,000 
Medicare beneficiaries lost their HMO coverage this year. That is 
because the HMOs moved out of the areas where those seniors live. 
Seniors lost their coverage. Look at this: 75 percent of Medicare HMOs 
will limit prescription drug coverage to less than $1,000 this year. 
That is an increase of 100 percent in the number of HMOs capping 
coverage since 1998. And 32 percent of Medicare HMOs have imposed caps 
of less than $500 this year. So even though you have 4 million 
Americans who have prescription drug coverage through Medicare HMOs, 
what you find out is there is a cap on the amount of prescription drugs 
they are able to receive. After that, they pay for all prescription 
drugs themselves.
  What the trend is, the dramatic trend, is that the dollar cap is 
going down and down, with a third of HMOs having a cap of $500. Many 
seniors in Medicare HMOs will exceed the cap. What we find is that 
Medicare HMO prescription drug coverage is increasingly inadequate and 
increasingly unreliable.
  There is a dramatic reduction in the number of employers providing 
coverage for retirees, and a dramatic increase in the amount of money 
that individual seniors are paying out-of-pocket, even if they have 
some coverage under their HMO.
  The third group I pointed out were those who had Medigap coverage, 
drug coverage which basically is unaffordable. These are sample Medigap 
premiums for a 75-year-old. In Delaware, just over $2,600; just under 
$2,000 in New York and Iowa; and just under $2,400 in Maine and 
Mississippi.
  Against that background, what has been happening to the cost of 
drugs? The average seniors income is just above $13,500. A third of all 
of our seniors have no coverage; another third are losing it 
dramatically. We find that 4 million of the remaining have increasingly 
limited coverage due to caps, so they are paying more and more out of 
pocket. Medigap, which is another way they are able to get some 
coverage, is going right up through the roof. So they are being hard-
pressed, and all at a time that 78 percent of all the elderly people 
have incomes below $25,000.
  Let's see what is happening to the cost of prescription drugs. Since 
1995, drug costs have been growing at double-digit rates. On this 
chart: Percent increases in drug costs. Let's look at the increase in 
the cost of the drugs: almost 10 percent in 1995, 10 percent in 1996, 
14 percent in 1997, almost 16 percent in 1998, 16 percent in 1999.
  Let's compare that to the Consumer Price Index for all goods. It is 
2.5 percent in 1995, it is 3.3 percent in 1996, 1.7 percent in 1997--
1.7 percent cost-of-living increase and look at the cost of the 
prescription drugs-- 14 percent. In 1998 it is 1.6, and 2.7 in 1999, 
and look at the cost of these drugs.
  This is not just a peripheral issue for our seniors. When we passed 
the Medicare program in 1964, as we heard so eloquently today from both 
our leader on this side, Senator Daschle, and Congressman Gephardt, we 
had a lot of the same kinds of criticisms that are being made now 
against this program: This is the beginning of a takeover by the 
Federal Government; this is the beginning of socialism.
  Of course, they were wrong then and we were right because the 
Medicare program has worked. But one area we did not take care of was 
prescription drugs because private coverage at that time did not 
provide for drug coverage.

[[Page S3849]]

 I daresay prescription drugs are as necessary for our senior citizens 
today as hospital care or doctor care.
  Prescription drugs coverage is necessary for elderly people. Yet it 
is left out. In a very important way, our Medicare system is not living 
up to its guarantee--for the men and women who fought in the wars and 
brought this country out of the depths of the Depression and have 
educated their children--to live their golden years with a degree of 
security and peace with respect to their health care needs under 
Medicare. We are now finding now with that major gap--today, more than 
95 percent of the private sector provides prescription drug coverage 
although they are dropping it for retirees--that Medicare does not 
provide prescription drug coverage. It is a major gap.
  We are saying: Let's fill that gap; let's meet our commitment to our 
seniors; let's include under Medicare a program that is going to be 
worthy of our names and which is absolutely essential if we are going 
to have our seniors--our parents and grandparents--live in the peace, 
dignity, and security they deserve.
  That is why we believe the program ought to be voluntary, there ought 
to be coverage for all, it ought to provide basic coverage and have 
catastrophic coverage, and it ought to be affordable.
  The President has embraced and endorsed the program, and it is 
endorsed by the overwhelming majority of our caucus in the Senate and 
in the House of Representatives, and it is strongly supported by our 
leader and Mr. Gephardt.
  The President in the Rose Garden today asked our Republican friends 
to join in this effort to pass this legislation this year. We have to 
pass something that is going to be meaningful and worthy of our 
efforts. He invited our Republican friends to join us in this effort 
and outlined the program and spelled out the details as well as the 
cost of this program.
  When we pass this program and send it to the President's desk, we in 
the Congress will say: Why did it take us so long? Every day we delay 
passing this program, millions of our fellow citizens are being asked 
to make decisions about their very lives which they should not have to 
make. That is wrong. We ought to respond. We know how to do it. The 
question is whether we have the will.
  We are going to insist this Senate and House of Representatives 
address this issue in this Congress. We give those assurances to the 
American people, and we invite our friends on the other side of the 
aisle to join us in meeting our responsibilities to our senior 
citizens.
  Mr. BIDEN. Mr. President, I am pleased today to join Senator Daschle 
and 31 of my colleagues in introducing the Medicare Expansion for 
Needed Drugs Act. This important legislation would expand the Medicare 
program to provide outpatient prescription drug coverage for seniors 
and other Medicare beneficiaries.
  This bill is long overdue, one might say 35 years overdue. When 
Medicare was first crafted in the mid 1960's, life-saving medicine 
tended to be focused on surgical procedures: appendectomy, mastectomy, 
and so forth. Medications were being increasingly used to treat serious 
medical conditions, such as antibiotics to treat infections. However, 
for most illnesses, the medicine cabinet contained few options.
  The advances that have been made in the past 4 decades in the use of 
pharmaceuticals are nothing short of phenomenal. Diseases that were 
incurable by any means are now cured by drugs alone. For example, in 
1965, childhood leukemia was inevitably fatal. Now, thanks to new 
medicines, it is almost always curable.
  In addition, in many instances new medications have enabled us to 
avoid the need for surgical treatment altogether. In 1965, intractable 
pain from stomach ulcers was a common indication for surgery. In 2000, 
we have highly effective medications to cut down on stomach acid, which 
have virtually eliminated the need for that kind of surgery. Not only 
that, but since we have discovered that most stomach ulcers are really 
due to a bacterium, we can cure the condition entirely with 
antibiotics.
  However, all too often, the elderly and disabled cannot take 
advantage of these major advances in drug treatment because the 
Medicare program does not pay for outpatient prescription drugs. How 
ridiculous is that?: that the group in our society that is the sickest, 
that could benefit most from these medications, is the one group that 
is denied access to them.
  You would be hard pressed to name another health program in this 
country that doesn't pay for outpatient prescription drugs. Virtually 
all private health plans do. Even looking at the Federal government: 
Medicaid, Tricare, the VA, the Federal Employees Health Benefits 
Program, they all pay for prescription drugs. Only Medicare, the 
medical program for the elderly and disabled, is singled out for 
special limitations.
  What is the consequence of this Medicare limitation? Just two weeks 
ago, the New York Times had a cover story on the plight of Albert 
Russell, a retiree who lives on an $832 Social Security check. Mr. 
Russell is nearly blind from glaucoma, a condition in which the 
pressure inside the eye is too high. When the new drug Xalatan was 
released in 1996, Mr. Russell's eye doctor tried it and found that it 
was just what Mr. Russell needed; it reduced the pressure in his eyes 
better than the alternatives. The problem was the cost of the drug: $1 
per day. After several years on the medicine, Mr. Russell could no 
longer afford the cost, so he had to stop taking the medicine. Of 
course, Medicare would not pay for such an outpatient prescription 
drug. In an attempt to save Mr. Russell's vision, his eye doctor 
recommended an alternative: an expensive eye surgery. For Mr. Russell, 
the surgery would not be as effective as the medication, but there was 
one big factor in its favor: Medicare would have no reluctance about 
paying for the surgery. So, as compared to surgery, the medication 
would be better and easier for Mr. Russell, and probably cheaper in the 
long run for the taxpayer, but under the current Medicare situation, 
this common sense solution is out-of-bounds. This situation must be 
changed.
  So what's in this bill for consumers? The bill makes prescription 
drug coverage voluntary and available to all Medicare beneficiaries. 
There is no deductible required, and there is an out-of-pocket cap that 
puts an absolute maximum limit on how much one person will have to pay 
for drugs in any given year. Participants pay a monthly premium, and 
the government splits the cost of drugs 50/50 with the beneficiary (up 
to a gradually increasing limit). There is absolutely no question that 
this bill is an important improvement for the health of our seniors.
  I think it is important to keep in mind what this bill is not. First, 
it is not perfect. The coverage for prescription drugs is not in parity 
with coverage for alternative medical treatments, such as surgery. This 
difference reflects cost constraints, but I am optimistic that this 
aspect can be addressed in future legislation.
  Second, this bill is not for everyone. Individuals who have better 
coverage of prescription drugs than is afforded in this bill, perhaps 
through an employer-sponsored retiree health plan, can keep that 
coverage. In fact, employers will be offered subsidies to encourage 
them to maintain prescription drug coverage for their retirees.
  Third, this bill is not a prelude to price controls on drugs. The 
legislation makes no mention of or need for price controls, and it is 
not our intention to propose or implement price controls. This bill 
deals primarily with access to pharmaceuticals, not their cost. The 
high cost of medications is a concern to many of us in this country, 
but that is a very complex problem that is not, and should not be, 
addressed in this bill.
  Finally, this bill is not the comprehensive overhaul of the Medicare 
program that we all agree is needed. The 1965 program needs to be 
brought up to new millennium standards to make it easier for the 
program to keep up with rapid future advances in medical technology. 
The benefit package (including enhanced preventive measures), the 
financing of graduate medical education, the provider payment 
mechanisms; these are all items that must be addressed. But not in this 
bill. Seniors need help now with prescription drugs, and they cannot 
wait the months or years that it will take to complete the needed 
comprehensive revision of Medicare.

[[Page S3850]]

  Mr. President, I encourage all of my colleagues on both sides of the 
aisle to work together to enact this legislation and to make sure that 
our Medicare beneficiaries aren't relegated to a second class health 
care system.
  Mr. ROBB. Mr. President, I wanted to say a few words about the 
Medicare Expansion for Needed Drugs, or MEND Act, which our leader, 
Senator Daschle introduced today. The MEND Act an important first step 
toward modernizing Medicare through the creation of a voluntary, 
affordable, universal prescription drug benefit.
  While the bill has many elements that I support, I am also interested 
in looking at ways that we might create a prescription drug bill that 
distributes its benefits for senior citizens in a more targeted way. I 
am working with several of my colleagues on the Finance Committee to 
create such a bill, and hope to introduce it in the next two weeks. 
With it, we will have two strong options for giving our seniors the 
help they so desperately need with the skyrocketing costs of 
prescription drugs.
  Mr. President, I applaud the minority leader for his determination in 
working to help our nation's seniors with the high cost of prescription 
drugs, and for his efforts in bringing this bill to the floor.

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