[Congressional Record Volume 146, Number 84 (Wednesday, June 28, 2000)]
[Senate]
[Pages S6016-S6021]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BREAUX (for himself, Mr. Frist, Mr. Kerrey, Mr. Bond, Mr. 
        Santorum, Ms. Landrieu, Mr. Ashcroft, and Ms. Collins):
  S. 2807. A bill to amend the Social Security Act to establish a 
Medicare Prescription Drug and Supplemental Benefit Program and to 
stabilize and improve the Medicare+Choice program, and for other 
purposes; to the Committee on Finance.


        medicare prescription drug and modernization act of 2000

 Mr. FRIST. Mr. President, I am pleased to be here today to 
join Senators Breaux, Kerrey, Bond, Santorum, Landrieu, Ashcroft, and  
Collins in introducing the ``Medicare Prescription Drug and 
Modernization Act of 2000''--a truly bipartisan effort to address the 
real need to provide seniors the prescription drugs they deserve and 
strengthen and improve the Medicare program overall.
  Last fall, I introduced the ``Medicare Preservation and Improvement 
Act of 1999'', with Senators Breaux, Kerrey, and  Hagel. This was the 
first bipartisan attempt to comprehensively reform Medicare in the 
program's 35 year history. When Medicare was first enacted in 1965, it 
had the goal of providing seniors necessary acute health care that 
would otherwise have been unaffordable. However today's health care 
delivery systems are far more advanced than the program's creators

[[Page S6021]]

ever imagined. Our goal over the past year was to create an atmosphere 
for further discussion on ways to strengthen and improve the Medicare 
program, including proposals for an outpatient prescription drug 
benefit. Today, we take the first step in the right direction--a 
direction to bring Medicare in line with the benefits and delivery 
systems commonplace in the 21st century today.
  Building on last year's bill and the findings of the Bipartisan 
Commission on the Future of Medicare, the ``Medicare Prescription Drug 
and Modernization Act of 2000'' takes the first steps towards long-term 
Medicare reform while adding a much needed outpatient prescription drug 
benefit to the program. Unlike in 1965, prescription drugs are integral 
to the delivery of health care and treating diseases prevalent among 
the elderly population. We must include a prescription drug benefit in 
the Medicare system. However, we must also address some of the other 
problems facing Medicare.
  For instance, we must recognize the need to update the total benefit 
package and increase the flexibility of the program. Today's Medicare 
coverage is inadequate, covering only 53 percent of beneficiary's 
average health costs, and still does not include coverage for many 
preventive services, eyeglasses, or dental care, much less prescription 
drugs.
  Medicare is also facing a doubling of beneficiaries over the coming 
decades. Today, there are 39 million Medicare beneficiaries, but within 
the next 10 years, 77 million baby boomers will begin entering the 
program. Our ability to effectively respond to this increased demand is 
further limited by the declining number of workers paying payroll 
taxes, which fund Medicare obligations each year, as the number of 
workers per retiree has continued to decline, from 4.5 in 1960 to 3.9 
today. This figure is expected to further decline to 2.8 in 2020.
  We all know that Medicare spending consumes much of the federal 
budget. But this will only get worse. Currently absorbing nearly 12 
percent of the federal outlays, Medicare will balloon to 25 percent of 
the federal budget by 2030. The program, which relies on general 
revenues to pay for close to 40 percent of total program expenditures 
today, will continue to use an increasing share of general revenues, 
leaving fewer and fewer federal dollars available to support other 
federal programs.
  Finally, with over hundred thousand pages of HCFA regulations 
governing Medicare, the program has become so bloated and heavily 
micro-managed that it cannot adopt to the daily advances in medicine 
and health care delivery. Even when life-saving diagnostic tests become 
available, such as a breakthrough prostate cancer-screening test that 
came on the market in the early 1990s, it takes years before they can 
be approved. Medicare has only recently begun reimbursing for prostate 
screening and only because a new law was passed to allow it.
  The very fact that Congress must past such laws illustrates perfectly 
the problem with a heavily micro-managed system. No government program 
can possibly keep up with the increasingly rapid rate at which new 
drugs and technologies are brought to the market. As a physician, I 
know that today, more than ever, access to lifesaving drugs and 
technology as they become available is the key to providing quality 
health care, and we must modernize Medicare to meet these demands.
  The need to modernize Medicare has never been more apparent. The 
measures included in the ``Medicare Prescription Drug and Modernization 
Act of 2000'' will provide seniors the option to choose the kind of 
health care coverage that best suit their individual needs, including 
enhanced benefits, outpatient prescription drug coverage, and 
protections against high out-of-pocket drug costs.
  The ``Medicare Prescription Drug and Modernization Act of 2000'' 
establishes that Competitive Medicare Agency (CMA), an independent, 
executive-branch agency to spearhead an advanced level of Medicare 
management and oversight--leaving behind the intransigent bureaucracy 
and outdated mindset infecting the program and instead guaranteeing 
seniors choice, health care security, and improved benefits and 
delivery of care. Modeled after the Social Security Administration, the 
CMA functions in a manner similar to the Office of Personnel 
Management, which has a 40-year track record of success in providing 
quality comprehensive health coverage for the millions of federal 
employees and their families through the Federal Employees Health 
Benefits Program.
  Vital to this bill is the Prescription Drug and Supplemental Benefit 
Program that provides beneficiaries outpatient prescription drugs and 
other additional benefits through new Medicare Prescription Plus plans 
offered by private entities or through Medicare+Choice plans. The drug 
benefit will provide, at a minimum, a standard prescription drug 
package consisting of a $250 deductible, 50 percent cost-sharing up to 
$2,100, and stop-loss protection at $6,000. Seniors are guaranteed this 
minimum benefits, but also have the choice of other drug benefit 
packages. I recognize more than anyone that a one-size-fits-all 
approach to health care does not work. It is important to pass along 
the same choices we, as members of Congress, have, Seniors deserve no 
less.
  We ensure that low-income beneficiaries receive necessary drug 
coverage by providing premium subsidies. Beneficiaries below 135 
percent of poverty, beneficiaries receive a 100 percent premium subsidy 
and 95 percent of all cost-sharing. Beneficiaries between 135% and 150 
percent of poverty receive premium subsidiaries on a sliding scale from 
a much as 100 percent to no less than 25 percent, and all 
beneficiaries, regardless of income, will receive a 25% premium 
subsidy. Since 39 percent of beneficiaries below 150 percent of poverty 
have no drug coverage, this provision alone will provide comprehensive 
drug coverage for over 5 million seniors and individuals with 
disabilities.

  We also address the high costs of drugs by ensuring that no 
beneficiary will ever pay retail prices for prescription drugs again. 
We do this through a prescription drug discount card program that 
passes on price discounts negotiated between pharmaceutical companies 
and insurers to beneficiaries. For example, today a senior may pay $100 
for a particular drug. Under the ``Medicare Prescription Drug and 
Modernization Act of 2000'', this senior would have access to the 
insurers negotiated rate of $70, but then would also receive an even 
further discount through coinsurance, reducing the total price of the 
drug by over 60 percent down to just $35.
  The ``Medicare Prescription Drug and Modernization Act of 2000'' 
modernizes Medicare by establishing a new competitive system under 
Medicare+Choice where plans bid for the costs of delivering care and 
compete with traditional Medicare based on benefits, price, and quality 
so that beneficiaries receive the highest-quality, affordable health 
care possible. Under this new system, plans are allowed maximum 
flexibility to reduce current beneficiary Part B premiums and cost-
sharing as well as offer new and additional benefits to beneficiaries, 
including outpatient prescription drug coverage.
  Finally, the ``Medicare Prescription Drug and Modernization Act of 
2000'', for the first time in Medicare's history provides lawmakers and 
the public a better measure for evaluating Medicare's financial health 
and establishes strong reporting requirements for the Medicare program 
as a whole.
  Medicare must be modernized to provide seniors integrated health care 
choices, including outpatient prescription drug coverage. This 
afternoon my colleagues and I have moved beyond the demagoguery and 
disinformation campaigns and have come together to propose bipartisan 
legislation that balances the very real need for outpatient 
prescription drug coverage with the need for meaningful modernizations. 
By moving forward on this legislation, I believe we can truly provide 
choice and security for our Medicare beneficiaries to ensure their 
individual health care needs are met, today and well into the 
future.
                                 ______