[Congressional Record Volume 148, Number 99 (Friday, July 19, 2002)]
[Senate]
[Pages S7096-S7099]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AMERICA'S SENIORS NEED PRESCRIPTION DRUG COVERAGE
Mr. KYL. Mr. President, I want to talk about the delivery of
prescription drugs to America's seniors. It is a subject that Senators
have been talking about pretty much all week long, but people tuning in
might wonder whether we are really making any progress toward getting a
bill passed. That is what I would like to address this morning.
For quite a long time now, we have appreciated the fact that when
Medicare was created, treating people with medications was not the
preferred or first or primary method of treatment. So much of what
Medicare covers today is the cost of invasive surgery, and the cost of
just about every other kind of treatment except treatment through the
use of medication or prescription drugs. Over the last 25 years, it has
become increasingly common for physicians first to treat with
medications, if possible. It seems second nature to us now. When
Medicare was first established, that was not the case. As a result,
most prescription drugs were not covered as part of Medicare.
Over the years, people learned how to receive supplemental drug
coverage through Medigap insurance and other ways to pay for
prescription drugs, but the combination of the fact that Medicare
itself did not set out to cover those drugs and, second, that the cost
of drugs has obviously increased over the years has made it more
difficult for some seniors to be able to pay for their prescription
drugs, especially since, again, this is what their physicians are
prescribing as the best way to treat them in many cases.
Add to that the fact that people are, fortunately, living longer
today, but that the longer one lives, the more likely they are going to
need to take various kinds of drugs, and we have a situation in which
clearly it is time for Congress to respond with an inclusion of a
Medicare drug benefit for all of America's seniors. We have been
working on that now for quite a long time.
I find it interesting that on the Republican side there are three or
four very good, somewhat different, ways of approaching this because
Members on our side have been working hard to try to fashion a set of
benefits we can afford and which will also provide the kind of care we
want for our senior citizens, and now we have a number of options.
I sit on the Finance Committee. Last year, when Senator Grassley
chaired the Finance Committee, we began working legislation through the
Finance Committee to try to bring to the Senate floor so we could
provide a prescription drug benefit to Medicare. Then the control of
the Senate changed.
Toward the end of last year, Republican members continued to meet
and, in fact, began reaching across the aisle to meet with the
Democratic members of the Finance Committee and also with the
Independent Member of the Senate, Senator Jeffords, who had left the
Republican Party and caucused with the Democrats but is identified as
an Independent, and over the months, representatives of the Republican
Party, the Democratic Party, and Senator Jeffords have come together on
an approach that has now acquired the name, the tripartisan approach--
because it is not just the two parties but, it is actually three
parties--an approach that actually will deliver a very good
prescription drug benefit to our seniors and a plan that actually is
unique among all of the different ideas that have been brought to the
floor because it can actually pass the Senate.
It has more than 51 votes in the full Senate, we believe, and it
could pass the Finance Committee. Senator Breaux is one of the leaders
in this coalition, and he has been a leader in the Finance Committee in
support of this. So a great deal of work has been done to try to
develop the kind of reform that is necessary to provide prescription
drugs to our seniors.
[[Page S7097]]
Then why the discussion on the Senate floor and what is going to
happen next week? Well, at the early part of next week, we are finally
going to have a chance to vote on some alternatives. There will be at
least two. One will be this tripartisan plan I mentioned that has been
offered by Senators Grassley, Hatch, Snowe, Jeffords, Breaux, and
others, and the other will be a competing plan brought by some members
of the Democratic Party, led by Bob Graham from the State of Florida.
The two proposals approach the prescription drug issue in fairly
different ways. I am hoping we will have a good debate about the
difference between those two approaches.
There are also approaches from other Republican colleagues who are
even more different and in some ways provide a very direct benefit to
seniors at a much lower cost than either of the two bills I just
described. The problem is that at the end of next week, it is doubtful
the Senate will have passed any of these bills.
How can that be if, as I said, there is majority support at least for
one of the bills? I fear the problem is a political one, that there are
some people who would rather have an issue than a bill, a problem
rather than a solution, because of course the problem can continue to
be talked about in a campaign context. I would rather have a bill that
provides the benefit we can all take credit for, but if politics is the
primary motivation, then clearly doing something is a good way to
appeal to voters. But of course the whole point is it is the right
thing to do.
It is past time that we provided a drug benefit to our seniors. Why
is it that my prediction is what it is? Ordinarily, if the Finance
Committee brought a bill to the floor, we would vote on it and the
majority would prevail. It either wins or it loses. But in this case,
even though the Finance Committee has been working very hard under the
chairmanship of Senator Baucus's and Senator Grassley's leadership on
the Republican side, we are close to being able to mark up the bill in
the Finance Committee and bring it to the floor. It is clear that the
Senate majority leader has, according to Senator Baucus, indicated the
bill would have to be acceptable to him in order for it to come out of
the Finance Committee and brought to the floor. That was not the case
with the so-called tripartisan bill. The legislation that has been
brought to the floor by the majority leader is not legislation that
would have come out of the Finance Committee.
Why is that important? Because a point of order lies against
legislation that does not come out of committee. In practical terms,
that means you have to have 60 votes on the Senate floor to pass it.
What has been set up is a process that is set up to fail. By not
allowing the Finance Committee to bring its bill to the floor and be
voted on by a majority of 51, we are setting up a requirement that any
bill has to pass with 60 votes because it did not come out of
committee; 60 votes will be very difficult to achieve because the
Senate is divided roughly \50/50\ among the two parties.
We have different approaches to this solution, this problem. The only
bill that likely would pass is the so-called tripartisan compromise.
But if it has to have 60 votes, that is a stretch, as well. I am not
sure we can get 60 votes.
At the end of the day, by virtue of the process that has been
created, we are not likely to end up with any legislation at the end of
next week. Then what will we do? Point fingers: It is your fault. No,
it is your fault.
The bottom line will be that the American people end up the losers.
Our seniors will not have a prescription drug benefit because the
Senate decided to operate in a way that guaranteed that conclusion.
The House of Representatives has passed a bill that is a good bill.
It is not exactly what I would do, but it is a good start. The Senate
should act in the same way.
Let me describe a little bit about what this tripartisan bill does.
Even though it is not a bill I would have written, I am willing to
support it, primarily because it does have a number of good ideas, and
it can be passed and we can move on, get a bill to conference and to
the President for signature to begin providing Medicare drug benefits
for our seniors.
The tripartisan plan is a comprehensive plan. It is a permanent plan
with respect to providing drugs to all Medicare beneficiaries. It also
has another feature that the other plans, by and large, do not, in that
it provides reforms of Medicare that will ensure that as the program
continues on out into the future, it will actually work. The problem
with both Social Security and Medicare today is without serious
modernizations neither one can provide the benefits that have been
promised. Those are commitments that we should be ensuring we can keep.
Under this plan, Medicare beneficiaries will have a new drug benefit
option. They can keep their current Medicare plan and do nothing, or
they can buy into the new drug plan provided for them. If they sign up
for the new plan, it is completely voluntary on their part. If they
sign up for the new plan, they will have choices so that they can pick
what best suits them. They would pay a premium that is estimated to be
about $24 a month, very similar to the monthly premium seniors now pay
for Medicare Part B. They would be able to choose between competing
plans. The plans would compete for their business and therefore would
offer the best possible arrangements for each individual senior. The
plans generally would have an annual deductible of $250. This is
similar to the Part B deductible seniors now pay which is currently
$100.
A key difference is after $3,700 in out-of-pocket drug spending by
the beneficiary, the Government would pay 90 percent of the costs, and
the beneficiary would only pay 10 percent. As Medicare beneficiaries
know, traditional fee-for-service Medicare does not have this type of
important stop-loss coverage for the benefits it provides; stop-loss
meaning after you pay a certain amount you do not have to pay anymore,
the Government would begin paying the bulk at that point. It is
important to protect the beneficiaries from high drug costs,
particularly those who have a significant illness, or a longstanding
illness that will require them to pay for drugs over a long period of
time.
Another important aspect of the proposal is it is affordable. The CBO
has estimated the cost, what we call scoring, will be $370 billion over
10 years. Given it is estimated the alternative offered by the House
Democrats cost in the neighborhood of $800 billion to $900 billion over
10 years, and the Graham-Miller proposal will cost almost $600 billion
over 10 years, we clearly have an inability to fund that kind of a
program. I believe the tripartisan plan is a much more affordable and
practical plan.
In an artificial attempt to keep down their costs, the Graham-Miller
plan sunsets after just 6 years. The proponents of this plan claim the
reason they sunset their legislation after 6 years, in the year 2010,
is they want the ability to look to see whether changes are necessary.
The fact is, it is a very expensive plan, about $600 billion over 10
years, if enacted on a permanent basis, making it undesirable from a
political point of view. That is one of the reasons that plan should
not be supported.
Let me also say we can examine legislation at any time, whether or
not it sunsets, and we can review legislation every year and propose
amendments to it. We do not need to sunset this legislation.
I mentioned the fact that traditional fee-for-service Medicare does
not have the stop-loss provision so people can continue to pay for
high-cost drugs on and on. Under the tripartisan plan, beneficiaries
will have a chance to join this new fee-for-service option instead of
joining Medicare Part A and Part B, as they do now. It would have a
combined deductible, instead of two separate deductibles that
beneficiaries have to deal with today.
Additionally, it would eliminate the beneficiary cost sharing for
preventive benefits, such as breast cancer screening, prostate cancer
screening, and screening for glaucoma. This allows Medicare
beneficiaries to receive these benefits without having to pay a so-
called copay.
One of the important aspects of the new option is the ultimate $6,000
stop-loss coverage, especially important if a Medicare beneficiary has
a long hospital stay. As I said, there are those
[[Page S7098]]
who have serious illnesses that simply cannot afford to pay more than
that. This new option is a complete benefits package as opposed to just
a prescription drug package. Instead of just trying to address the
issue of providing drugs, the tripartisan bill puts it into a new
option in the traditional Medicare Program that currently exists so
people will know what they have a comprehensive plan. They can make an
intelligent choice and know that it is all there for them together.
I will comment on another important part of the plan, and that is
that it uses the current market system that seniors are familiar with
to deliver the benefits. The alternative is a strictly Government plan
that has to be run by Government bureaucrats. They will make the rules.
They would establish exactly what the benefits are over time and what
the costs of those are. By using the market that is currently used,
there is competition to provide the product that is the best for
seniors at the lowest cost, so that seniors' needs will actually keep
the costs down and keep the benefit structure positive, as opposed to
the Government bureaucrats making those decisions.
The tripartisan plan includes coverage for drugs within all
therapeutic categories and classes, and provides timely appeals if
there is any denial of drug coverage in a particular case. This allows
the beneficiary to continue to have access to the needed drug and to
call on outside experts to review any decision that would deny them
those drugs.
The plans that participate in the program will have to meet access
and quality standards that are decided by the Department of Health and
Human Services, including pharmacy access standards. We want to make
sure in the rural areas Medicare beneficiaries have access to
pharmacies they can go to and get good advice. In rare cases, where
beneficiaries may not have a choice of at least two of these plans, the
legislation guarantees they would have an option of a fallback plan.
Providing affordable drug coverage is the goal of the tripartisan
plan. That is why it subsidizes private plans to provide this drug
benefit. Using this delivery method, as I said before, will both
provide competition to hold down the costs and maintain the kind of
program benefit that seniors are used to at the present time.
The CBO has told the authors of the tripartisan plan that using this
delivery method not only ensures Medicare beneficiaries access to the
new drug plans but also the most effective use of taxpayer dollars. We
know the plan will become more expensive over time. Seniors care just
as much about taxes as anyone else and they want to know it is
affordable. The more affordable it is, the more likely they can expand
the benefit to seniors. So that is in their interests, as well.
In contrast, the Graham-Miller plan uses government contractors to
administer their drug benefit. These contractors would have little
interest in holding down the cost of prescription drugs for Medicare
beneficiaries. We all know what the ultimate result of this would be:
the federal government would establish price controls on prescription
drugs to hold down the costs. This would have a devastating impact on
prescription drugs. Let me offer a real life example of what will
happen here.
In some major cities today you have price controls, or rent controls
on housing. We all know what happens when you have these rent controls.
The bottom line is the prices either go up or the conditions of the
tenements go down because the people who own them are no longer in a
position to continue to upgrade them because they cannot make a profit
on them.
What happens is that a severe shortage of housing is created and most
people who do not have access to rent controlled housing have to pay
very large amounts just to live in a small apartment. We are familiar
with this in the area of housing.
The same thing would happen with respect to drugs. If you use the
alternative plan, which will ultimately lead to an attempt by the
Government to control the prices--whenever you try to control the price
of something, you get less of it. That is exactly what would happen
here. People who do not have access will pay extremely high costs. Just
as there is no incentive to build new rental housing units in areas
with price controls, there will be no incentive to create new
prescription drugs. After all, if you cannot make a profit with a new
drug that you create, why would you go to the effort and expend the
money to try to develop that new drug and put it on the market? It is
just not worthwhile to spend the amount of money necessary to create a
product when you cannot even cover the costs when you sell it.
If we just think about price controls, if they had existed on
prescription drugs over the last 20 years, you are probably not likely
to have seen the creation of the fantastic new drugs we all have the
benefit of today--to control cholesterol levels, like Lipitor; to help
people with allergies; to help people with diabetes; and the list goes
on. This could be the result of the Democratic alternative which would
try to impose price controls without providing an incentive to create
these new drugs. Over time, that will result in inferior medical care
because fewer and fewer drugs are being brought to market that will
help seniors as well as everyone else.
This is another reason we should support the tripartisan plan that
essentially builds on the system we have today, that gives seniors at
least two types of choices. Medicare beneficiaries can either continue
in the existing Medicare system or get to choose the new options. If
you get into the new options, you are going to have at least two plans
to choose from. So there is a lot of choice at the same time that it is
also very similar to the current system private employees and federal
workers have to receive their health care.
Let me finally talk about how much the Government is paying Medicare
providers to serve Medicare beneficiaries. It is a very serious
concern. At some point we are going to have to deal with it. In the
House of Representatives there was, I think, $30 billion added to their
prescription drug benefit legislation to ensure that physicians and
hospitals and other providers would receive the money they need
literally to stay in business.
We have emergency rooms around the country that are closing because
they are not being paid. It is going to be necessary for us to provide
some supplemental funding to the hospitals and other health care
providers literally to continue to provide the benefits we are
promising through programs such as Medicare and Medicaid. If there are
not doctors and hospitals to serve people, we can pass all the laws we
want, but it is not going to do people any good. So we are going to
have to address this issue, whether it is on this legislation or
legislation down the road.
My colleagues may appreciate that by Federal law, under the Medicare
Program, physicians will receive a 17-percent cut over the next 4 years
in what Medicare pays them to see a Medicare patient. Since private
plans frequently base their reimbursements on what the Government
Medicare plan reimburses, the effect is, for virtually all physicians,
that they are seeing this kind of drastic cut in what they are
reimbursed, either by the Government--which provides about 50 percent
of the health care--or by the private plans, which provide the
remainder.
According to a March 12, 2002, New York Times story, 17 percent of
family doctors are not taking new Medicare patients because of this
problem. They are simply not getting paid enough to cover their
overhead costs.
Last year, Senators Jeffords and Breaux and I introduced legislation
that would have partially fixed this problem. This legislation now has
80 cosponsors in the Senate. That means virtually everybody in the
Senate has said we need to adopt this legislation. It would help to fix
this problem of declining reimbursements for providers.
Additionally, Home health care agencies will be taking a 15-percent
reduction in payments starting October 1, skilled nursing facilities
will experience a 17-percent cut in some of their Medicare rates, and
these are just a few of the examples of payment reductions. So we are
not going to be able to provide quality care under Medicare if we are
not able to sustain the experts who are providing that care today.
I am looking forward to working with my colleagues to ensure that
through the reimbursements we will add, whether in this legislation or
[[Page S7099]]
some other legislation this year, we will be able to provide that
supplemental help to them until we are able to straighten out the
payment formulas under which Congress reimburses the hospitals and
other providers that are providing care called for by Medicare.
Let me summarize the point about the difference between the two
prescription drug proposals and how we are likely to pass a drug bill
that will actually be signed into law. If we had been able to pass a
bill out of the Finance Committee, we would only have to have a bare
majority--51 votes. The tripartisan bill has support on both sides of
the aisle, Democrat and Republican as well as Senator Jeffords, another
cosponsor, to be able to pass. We could actually get together with the
House of Representatives, make the changes, the compromises between the
House bill that has already been passed and this bill, and get it to
the President for his signature, and by the beginning of the fiscal
year we could actually be implementing a new drug for our seniors that
they do not currently have.
But because that does not fit in with the plans of the majority
leader, we are now in a situation where any bill that is brought here
is going to have to have 60 votes to pass. Because of the realities of
the political environment in which we operate, it is unfortunately the
case that it is going to be very difficult to get 60 votes for any
plan.
The one that has the best chance is the tripartisan plan that I
alluded to earlier. It is not the bill I would have written, but I am
willing to support it because it is a good proposal that has the best
chance we have to actually get something passed and deliver a real
benefit to our seniors. We will have time to work the issues in the
conference committee. We will have time to continue to modify the
legislation after it is passed and signed into law. But we have to act,
and every year we do not act is a year in which more and more seniors
are denied the benefit that they need, that their physicians are
prescribing for them and, unfortunately, many of them cannot afford.
It seems to me we should put ideologies and politics aside and try to
do something good for the seniors of our country and lay those
differences aside to the extent that we can actually pass a bill. It is
a good bill. It is a very good bill in terms of providing the benefits.
It is costly, but with the reforms in Medicare that are included within
it, I think over time we will be able to afford these costs. After all,
it is a commitment that we should be satisfying for our seniors.
I urge my colleagues, when the time comes early next week, to lay
aside partisan differences, to support the tripartisan bill, the only
bill that has a chance of succeeding here, and move on with the
political process so we can work with the House of Representatives,
pass it on to the President, who I am quite sure will sign it, and
begin providing a prescription drug benefit to our seniors.
Going all the way back to when Medicare was created, we treated
people differently. Today we know medications are the primary method of
treatment. We have to recognize that here in the Senate, something that
all seniors understand very well. Let's recognize the reality, let's
provide this drug benefit and really keep faith with the seniors we
represent.
I suggest the absence of a quorum.
The PRESIDING OFFICER (Mrs. Lincoln). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mrs. LINCOLN. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Johnson). Without objection, it is so
ordered.
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