[Congressional Record Volume 146, Number 78 (Tuesday, June 20, 2000)]
[Senate]
[Pages S5465-S5467]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAHAM (for himself, Mr. Bryan, Mr. Robb, Mr. Conrad, Mr. 
        L. Chafee, Mr. Baucus, Mr. Rockfeller, and Mrs. Lincoln):
  S. 2758. A bill to amend title XVIII of the Social Security Act to 
provide coverage of outpatient prescription drugs under the Medicare 
Program; to the Committee on Finance.


             the medicare outpatient drug act (the mod act)

  Mr. GRAHAM. Mr. President, I rise today with Senators Bryan, Robb, 
Conrad, Chafee, Baucus, Rockefeller, and Lincoln to introduce the 
Medicare Outpatient Drug Act of 2000.
  We are all aware of the fundamental changes in Americans' life 
expectancy throughout the century. When Medicare was created in 1965, 
the average life expectancy for a woman who reached the age of 65 was 
80 and for a man 78 years of age. In 1998, the life expectancy jumped 
to 84 years for a woman and 81 for a man. Projections for the year 2100 
assume that the average life span for an individual who reaches 65 will 
be 94 years for a woman and 91 for a man.
  These statistics paint a clear picture--seniors are living longer and 
to ensure their quality of life, they must have guaranteed access to 
prescription medications. The Republicans say that they want a 
prescription drug benefit. The Democrats say that they want a 
prescription drug benefit. The question facing both parties is this: Do 
they really want a benefit or just an election year bully pulpit? If 
the answer is a benefit, we're here today to help.
  On far too many occasions in the last few years, important 
legislation has been knocked off the tracks by election year, partisan 
train wrecks. We hope that this year can be different. That is why we 
are offering a new Medicare prescription drug benefit--one that we 
believe represents a workable compromise between the Democratic and 
Republican positions.
  Our Proposal--the Medicare Outpatient Drug Act of 2000--is centrist. 
It is bipartisan. It is innovative. And we think it can pass Congress 
this year. I must mention that this effort has been a truly 
collaborative one from start to finish. The MOD Act has several key 
components:
  Universality--access for everyone;
  Consistency--keeps with the important tradition of the Medicare 
program by providing a defined, reliable benefit for all seniors alike. 
A senior in Fargo, North Dakota is assured access to the same defined 
benefit structure as a senior in Miami, Florida;
  Voluntary participation, like Medicare Part B;
  Special protections for low income Americans;
  True stop-loss protection, which ensures seamless insurance without 
gaps in coverage;
  A ramp-up payment system, which decreases beneficiary payments based 
on their increased prescription medication needs; and
  The use of Multiple Pharmacy Benefit Managers (PBMs) to administer 
the benefit and promote competition and choice.
  For many years I have spoken about the need to move the Medicare 
program from one based on acute care and illness to one focused on 
prevention and wellness. The Medicare Wellness Act of 2000, of which 
many of my colleague are cosponsors and which ensures seniors access to 
a variety of preventive programs and screenings, represents the first 
piece of this puzzle--The MOD Act represents the second step in my 
three-point plan for accomplishing this goal.
  Prescription drugs are an integral part of health care and must be 
integrated in to the current Medicare system as a defined benefit--not 
as an ``add on.'' It is my understanding that the House Republicans 
have proposed a bill that entrusts the private insurance market to 
provide a prescription drug benefit to seniors. Though, on the surface 
these ideals have appeal and they are initially less expensive or claim 
to be ``more flexible'' than a comprehensive, universal benefit, I find 
myself asking the question: Are there other Medicare benefits that are 
or should be treated in this capacity?
  Let's take the example of physician services, for example, 
anesthesiology services. Would we ask private insurance companies to 
create anesthesiology-only insurance packages? Would beneficiaries 
purchase such policies? Would they be available? What would be the 
result of extricating this benefit from the Medicare program.
  With prescription drugs representing one of the most prevalent 
treatments in health care today--I ask myself, ``Is it wise to look 
toward an approach to providing coverage of prescritpion medication 
which is arguably unworkable in everyother sector of medicine?''
  Leaders in the health insurance industry have stated that ``Lawmakers 
should avoid drug insurance-only coverage, which is unlikely to get off 
the ground and which would be impossible to price affordably.'' The MOD 
Act creates a defined, affordable, consistent prescription drug benefit 
within the Medicare system where it should be.
  The third piece to solving the Medicare puzzle lies in the need to 
give the Medicare program the tools to compete in the current health 
care market

[[Page S5466]]

place. My colleagues and I will soon be introducing a reform bill that 
will have the dual effect of providing significant savings to offset 
the bill that we are introducing today.
  I encourage my colleagues to join us in cosponsoring this important 
piece of legislation.
  Mr. BRYAN. Mr. President, I am very pleased to join my colleagues in 
unveiling this important bipartisan legislation. Our proposal to offer 
a prescription drug benefit for all Medicare beneficiaries is sound, 
comprehensive, and workable.
  We are introducing this bill for a very simple reason: the majority 
of Medicare beneficiaries lack meaningful prescription drug coverage, 
and we have an historic opportunity to do something about.
  The inadequacy of the current Medicare benefits package is clear. It 
simply does not make sense for a health insurance program to exclude 
coverage of one of the most critical components of health care.
  In 1996, 90 percent of Medicare beneficiaries had at least one 
chronic condition; drugs are frequently the best way to manage those 
conditions. Why offer hospitalization and physician visits to treat 
high blood pressure, heart problems, and depression, but not one of the 
most effective treatment options?
  Many Medicare beneficiaries are faced with the choice of paying 
extremely high prices at retail outlets--much higher than the prices 
paid by those with coverage--or going without medically necessary 
prescription drug.
  With bipartisan support and unprecedented budget surpluses we can 
give our seniors and those with disabilities another choice: to enroll 
in a Medicare prescription drug plan that is guaranteed to be 
accessible and affordable.
  What should this plan look life? The Medicare Outpatient Drug Act 
contains several important provisions:
  First, it provides prescription drugs as a defined, comprehensive and 
integral component of the Medicare Program. We need to be able to say 
exactly what we are promising seniors, and we need to make sure they 
will get it--the only way to do that is to include it in the basic 
Medicare benefits package along with everything else.
  Relying on private insurers to offer this benefit ``would result in a 
false promise'' to use the words of the President of the HIAA.
  Second, our bill provides the greatest help to those with the 
greatest need--beneficiaries with the lowest incomes and the highest 
drug expenditures.
  We do that by providing additional subsidies for those with the 
lowest-incomes, increasing the government's share of coinsurance as the 
beneficiaries out-of-pocket costs increase, and income-relating the 
premium for high-income beneficiaries.
  The bottom line: all seniors will be guaranteed access to affordable 
drugs, and will have the peace of mind of knowing that full coverage is 
provided for any and all expenses above $4000.
  Third, ``The Medicare Outpatient Drug Act'' encourages maximum 
competition to achieve the greatest discounts, and uses the private 
sector to deliver and manage the benefit.
  Finally, it is consistent with the need to strengthen and modernize 
the Medicare program overall. Providing drug coverage is the first 
step, but more work is needed. We will be introducing legislation soon 
that takes the next steps.
  The bill we are offering today bridges the gap between the proposals 
offered by the President and the House GOP.
  It gives beneficiaries what they need: long-overdue coverage of 
prescription drugs, and also injects competition into the program and 
provides choices for beneficiaries.
  This is the first bill to offer universal, guaranteed, affordable, 
fully-defined comprehensive coverage--no limits, not gaps, no gimmicks.
  Beneficiaries will know what they are getting, and they will know 
without a doubt that the benefit will actually be provided.
  ``The Medicare Outpatient Drug Act'' is not a tough call. It will 
accomplish our goals of providing affordable, accessible coverage, and 
it will work.
  This is legislation that Congress should enact this year. I look 
forward to working with my colleagues on both sides of the aisle to 
ensure that we do just that.
  Mr. ROBB. Mr. President, 2 weeks ago, at a health care forum I 
sponsored in Virginia, a doctor told me of a woman with breast cancer 
splitting her Tamoxofin pills with two other breast cancer patients, 
because the drug was so expensive that the other two couldn't afford 
it. This is a touching story from the perspective of a woman trying to 
help two peers, but from a health care perspective, it's an 
abomination. Not only does splitting a dose for one person into three 
negate the effects of the drug for all three women, but the lack of 
access to this drug only makes them sicker.
  Unfortunately, stories like these are all too common today. Modern 
medicine has become more and more dependent on prescription drugs, yet 
the Medicare program, which provides health care for our nation's 
elderly and disabled, has not changed with the times. As a result, 
Medicare often finds itself in the position of paying for expensive 
hospital care, yet not paying for the prescription drugs that could 
help keep a patient out of the hospital. And as prescription drugs 
become more essential to seniors' health care, we hear many stories 
like the one I've told you today.
  It's time we did something to change this. While over 90 percent of 
private sector employees with employer-based health insurance have 
prescription drug coverage, the 38 million Medicare beneficiaries in 
America today have no basic prescription drug benefit. At the same 
time, the average Medicare beneficiary fills eighteen prescriptions 
each year, and will have an estimated average annual drug cost of 
nearly $1,100 in 2000. We have an obligation to our seniors, and future 
generations of seniors, to strengthen and modernize Medicare by adding 
a prescription drug benefit.
  Unfortunately, both the House and Senate have made little progress 
toward passing a drug benefit this year. By and large, moderate, 
bipartisan solutions have been absent from the debate.
  I am pleased to join my colleagues Senator Graham, Senator Bryan, 
Senator Conrad, Senator Chafee and Senator Baucus in introducing a bill 
which we believe will break this logjam, the Medicare Outpatient Drug 
Act, or MOD Act, of 2000. In crafting the MOD Act, we have combined the 
best elements of insurance-based plans--which aim to promote 
competition and innovation--and the President's plan--which offers a 
dependable, universal benefit to all seniors. The result is a bill that 
all sides should be able to agree on.
  Like the President's plan, our bill will offer a defined Medicare 
benefit that will be available to all seniors, regardless of their 
health status or place of residence. But unlike the President's plan, 
our bill will allow private entities to compete for Medicare 
beneficiaries--allowing seniors and the disabled to choose from a 
variety of options that are custom-tailored to their specific 
prescription drug needs.
  Moreover, the MOD Act is the first prescription drug bill to offer 
Medicare beneficiaries a comprehensive drug benefit, with no gaps in 
coverage, and full protection against sky-high out-of-pocket costs. The 
MOD Act gradually increases its level of coverage as beneficiaries get 
sicker, so that the greatest assistance is devoted to those who need it 
most.
  There is only a handful of legislative days left in the Senate this 
year, and if we're going to get anything done on the prescription drug 
front, we'll have to settle on a proposal that is moderate and 
bipartisan. The Medicare Outpatient Drug Act is that bill, and I urge 
each of my colleagues to give it their full support.
  Mr. L. CHAFEE. Mr. President, I am pleased to join Senators Graham, 
Bryan, Robb, Conrad, and Baucus in introducing the Medicare Outpatient 
Drug (MOD) Act of 2000 today.
  The Medicare Outpatient Drug Act addresses an area of great concern 
to our nation's seniors: the need for a Medicare prescription drug 
benefit. Seniors today are facing staggering and burdensome drug 
prices. Studies show that the average American over 65 spends more than 
$700 per year on drug prescriptions. In Rhode Island, seniors pay twice 
as much for certain prescription drugs as the drug companies' most 
favored customers (for example, Medicaid and the Veteran's 
Administration). On average, Rhode Island seniors pay 84 percent more 
than prescription drug consumers in Canada or Mexico.

[[Page S5467]]

  We must update the Medicare program to include a prescription drug 
benefit. This bipartisan, comprehensive bill will provide universal 
coverage to all 39 million Medicare beneficiaries in this country. As 
you know, Medicare was established in 1965 at a time when prescription 
drugs were not widely used. These days, drug therapies have replaced 
overnight stays in hospitals and long convalescence in nursing 
facilities. In light of this, we must update the Medicare program to 
keep pace with these scientific and medical advances.
  This legislation does many things that other legislative proposals do 
not. First, it provides universal coverage on a voluntary basis to 
every Medicare-eligible individual. Second, it is based on a standard 
insurance model, with coinsurance, a deductible, and a defined stop-
loss benefit. In other words, once a senior pays $4,000 in annual drug 
costs, our plan covers the rest. Third, the amount of a senior's 
premium would be directly related to his/her income, on a sliding 
scale. In other words, the lowest-income senior will receive the 
greatest subsidy. Conversely, the highest-income senior will receive 
the lowest federal subsidy.
  Finally, this legislation emulates market-based insurance coverage by 
allowing multiple ``pharmacy benefit managers'' (PBMs) to contract with 
Medicare to provide the pharmaceutical benefit to seniors. This would 
ensure competition in the delivery of this benefit, which means a 
better benefit and lower prices for consumers. This competition would 
also prevent the government from ``setting'' drug prices. In my view, 
price setting would weaken the ability of pharmaceutical companies to 
conduct valuable research and development into new drug therapies that 
one day may cure diseases such as cancer, Parkinson's Alzheimer's, 
diabetes, and HIV/AIDS.
  In sum, I believe our proposal to be one of the most responsible and 
comprehensive drug bills in Congress. It achieves these twin goals 
while relieving seniors of the huge burden of high drug bills. Seniors 
should never have to choose between filling a prescription for needed 
medication or buying groceries. Sadly, this is often the case today.
  This past April, I received a letter from an elderly couple in Rhode 
Island, with a list of their prescription drug expenses for 1999 
enclosed. This couple spent almost $7,000 in 1999 on these 
prescriptions. They are living on a fixed income, and told me that 
their savings are being wiped out by the high cost of prescription 
medications. In addition, the grandmother of one of my staffers cannot 
afford Prilosec, which she needs to prevent nausea. She cannot hold 
down food without this drug. This grandmother has to get her Prilosec 
prescription from her daughter, who has it prescribed and then ships it 
to her mother.
  This should not be happening. Our bill will ensure that these seniors 
will get the prescription medications they need without having to wipe 
out their personal savings or resort to getting the prescription 
through a relative.
  I urge my colleagues to join us in supporting this important 
legislation and finally provide this necessary medical coverage to our 
nation's seniors.

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