[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.
____________________