[Congressional Record Volume 148, Number 101 (Tuesday, July 23, 2002)]
[Senate]
[Pages S7186-S7189]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           PRESCRIPTION DRUGS

  Mr. GRASSLEY. Mr. President, I wish to speak once again, before the 
vote this afternoon at 2:45 p.m., on the Graham prescription drug bill 
and point out that that bill sunsets in the year 2010. Also, it omits 
coverage of most drugs. First of all, the fact the bill sunsets on 
December 31, 2010, ought to be an overriding factor of how people vote 
on this amendment.
  Pages 78 and 79 of the bill say ``drug coverage must stop after 
December 31, 2010.'' That is section 1860(k), for people who want to 
look it up and verify what I am saying.
  The Graham-Miller-Kennedy bill would not provide, if enacted, a 
permanent Medicare prescription drug benefit.
  In the tripartisan bill, we are talking about a plan that is 
permanent. There is no sunset because we know that senior citizens on 
December 31, 2010, are not going to sunset themselves. They are going 
to need prescription drugs on January 1, 2001, just as much as they did 
on December 31, 2010.
  We have a bipartisan program that is permanent and continues drug 
coverage in the future. Why? Because prescription drugs ought to be a 
part of Medicare as much in the year 2002 as hospitalization was a very 
important part of Medicare in 1965.
  Medicare beneficiaries should understand that there is no guarantee 
that a prescription drug plan being offered by Senators Graham, Miller, 
and Kennedy, will continue to cover their drug expenses after 2010.
  Some refer to this as a sunset, but I wish to make clear, as this 
chart points out very well, that this is just one very obvious big 
black hole in this program that will sunset in the year 2010. 
Sunsetting a Medicare Program seems to be a very strange thing to do. 
Medicare is an entitlement program. Dependability has been one of its 
central features. So why should a new drug benefit be any different 
than any other program that we have--hospitalization, doctor care, or 
other provisions in Medicare that we have had since 1965.
  There is no need to speculate as to why the sponsors sunset their 
program in 2010. It is a device to make the costs of the bill appear 
lower than it otherwise would be. In other words, it is a mere gimmick.
  I point out another very crucial flaw with the Graham amendment and 
restrictive formularies that might keep beneficiaries from getting help 
with their medications that they and their doctor prefer. If we look at 
the tripartisan plan, any drug that is available, generic or patent 
that is available, what the doctor and what the patient decide is best 
for them is going to be available. There is a lower copay for generic 
drugs. We want to promote generic drugs over patented drugs if that is 
possible, but for sure we should not in any way limit the availability 
of drugs as is being done under the Democrat plan.
  We have a poster that shows that 100-percent brand name drugs, albeit 
approved by the FDA, are going to be available under the program we 
have in the tripartisan bill, but only 10 percent of the brand name 
drugs are covered by the Graham-Daschle-Kennedy plan, a Government-run 
process certain to be time consuming and bureaucratic. If a beneficiary 
wants to appeal the fact that the drug they want and their doctor wants 
for them is not available under the Kennedy plan, it is possible to go 
through a Government appeal process to get the preferred drug covered.

[[Page S7187]]

  Why should we put people to that test of bureaucratic decisionmaking 
when we have other programs that are available to make the drug that 
the doctor wants and thinks best for that patient? We do have that in 
the tripartisan plan. Controls on the pharmacy that can participate in 
the program, surely this is the biggest gap in coverage.
  In any case, the important point is it is going to take another act 
of Congress to continue the program once it sunsets in the year 2010. 
Once a program like this sunsets, it could be difficult to pass 
legislation which would be required to extend it. I do not think that 
is a particularly good deal for our seniors. Having a drug benefit that 
disappears into a black hole is a terrible idea, as sunsetting is 
equivalent to disappearing into a black hole.
  I would like to have Senators who are still in doubt about how they 
are going to vote this afternoon look at the tripartisan 21st century 
Medicare amendment as a reasonable alternative because it is 
bipartisan, because it is middle ground between the least expensive and 
the most expensive plans. It is not a big cost to Medicare, and it is 
something that brings permanency and that is predictable well into the 
future for Medicare. That is what we should have, and that is what we 
have in the tripartisan drug plan.
  Any Senators on my side of the aisle who want to speak should get 
here soon.
  I reserve the remainder of my time.
  Mr. FEINGOLD. Mr. President, I rise today in strong support of a 
comprehensive and affordable prescription drug benefit for America's 
seniors. At the same time, we must modernize the entire Medicare 
benefits package by promoting regional equity in Medicare spending to 
ensure access to Medicare's basic services.
  The absence of affordable prescription drug coverage for most seniors 
is devastating, and we must address this issue with the same vigor that 
our predecessors in Congress brought to their effort to enact the 
original Medicare program.
  The addition of a prescription drug benefit will be the largest 
expansion of the Medicare program since it was initiated in 1965. But 
we should not simply add a benefit, we must get it right.
  Congress must pass an attractive benefit with an affordable premium 
and a provision on catastrophic costs that is an insurance policy for 
all Medicare beneficiaries. While I recognize that the cost of any new 
benefit will be shared with Medicare beneficiaries, any deductibles or 
co-payments must be low enough to ensure significant participation in 
the program.
  I am very encouraged that my colleagues from Florida and Georgia have 
recognized the importance of a comprehensive benefit through the 
Medicare program. It is affordable, comprehensive, and reliable. I am 
particularly supportive of their effort to fund a defined benefit with 
no deductible.
  While I am certainly open to working with my colleagues on the 
benefit structure, I am very concerned about proposals to enact this 
benefit outside the Medicare program that would amount to a privatized 
benefit. Past efforts to offer privatized benefits outside the Medicare 
benefit structure have simply not worked in Wisconsin.
  The Medicare+Choice program has offered very few choices to most 
Wisconsin seniors. While the structures of some of the private Medicare 
prescription drug benefits are plainly different from the 
Medicare+Choice program, I remain concerned that states like Wisconsin 
will end up with few choices. As with Medicare HMOs in the 
Medicare+Choice program, Wisconsin seniors will likely be faced with 
little choice with Medicare prescription drug HMOs.
  We must also harness the purchasing power of the Medicare program to 
ensure that the Federal Government gets a fair price for the 
prescription drug program. That's the reason why I support the Hatch-
Waxman reforms in the underlying bill.
  By closing a series of loopholes in the original Hatch-Waxman law, 
these reforms will increase competition by preventing brand-name 
pharmaceutical firms from blocking generic drugs from entering the 
market. While I strongly support the original Hatch-Waxman law because 
it promoted competition and consumer choices, the reforms in the 
underlying bill will modernize the law and strengthen competition in 
the marketplace.
  If we simply allow pharmaceutical companies to dictate the price of 
prescription drugs to consumers, the cost of the prescription drug 
benefit will skyrocket out of control. I am not advocating price 
controls. But we must ensure that taxpayers and Medicare beneficiaries 
get a fair price.
  And I have further concerns on behalf of American taxpayers, as each 
of the proposals we are likely to consider actually digs our deficit 
hole deeper at a time when our budget deficit already is getting worse 
every day.
  In its recently released mid-session review of the budget, the Office 
of Management and Budget estimates that the budget deficit for the 
current fiscal year, the one ending on September 30, will be a whopping 
$165 billion, and that includes the Social Security Trust Fund 
balances.
  If you look at the real budget deficit--the one that does not use the 
Social Security Trust Funds to help mask our fiscal problems--the 
figure is $322 billion.
  The projected $322 billion deficit for this year is just shy of the 
$340 billion deficit that we faced when I was first elected to the U.S. 
Senate in 1992.
  We spent the balance of the last decade climbing out of that deficit 
hole, and in the end, thanks to the virtuous cycle of fiscally 
responsible budget policies and a growing economy, we were able to 
balance our books and actually began to pay down some of the massive 
Federal debt that was racked up during the 1980s and early 1990s.
  But in the course of a little over a year, thanks in large part to 
the fiscally reckless tax cut enacted last year, the administration and 
Congress have squandered what was achieved during the previous eight 
years.
  Even OMB's estimate of the real deficit over the next five years is 
over $1 trillion! And that estimate may be based on overly optimistic 
assumptions.

  It is against that backdrop that we are now considering Medicare 
prescription drug proposals.
  There is no doubt that we need to modernize Medicare by adding a 
prescription drug benefit. I strongly favor such a reform. But we 
should find offsets to fund a drug benefit.
  It would be far better if we pay for this new program. Unless we pay 
for this needed reform, it will always be at risk of being severely cut 
back or even eliminated. Medicare beneficiaries can not rely on any 
drug benefit enacted under such circumstances, and we will do a 
disservice to them if we do so.
  We must enact a real prescription drug benefit, one that provides 
meaningful help to seniors, and one which beneficiaries will know will 
be there for them when they really need it, not placed on the budget 
chopping block the instant it is enacted.
  Congress could achieve some of these cost savings by modernizing 
other aspects of the Medicare program. For example, I am hopeful that 
the Senate will consider proposals to modernize the underlying Medicare 
program to promote regional fairness among Medicare beneficiaries.
  We must address Medicare's discrimination against Wisconsin's seniors 
and health care providers. The Medicare program should encourage the 
kind of high-quality, cost-effective Medicare services that we have in 
Wisconsin. By encouraging this high-quality, low-cost care, we may well 
achieve cost savings to the program and offset part of the cost of a 
prescription drug benefit.
  To give an idea of how inequitable the distribution of Medicare 
dollars is, imagine identical twins over the age of 65. Both twins 
worked at the same company all their lives, at the same salary, and 
paid the same amount to the Federal Government in payroll taxes, the 
tax that goes into the Medicare Trust Fund. But if one twin retired to 
New Orleans, LA, and the other retired in Madison, WI, they would have 
vastly different health care options under the Medicare system. The 
twin in Louisiana would get much more.
  For example, in most parts of Louisiana, the first twin would have a 
wide array of options under Medicare. The high Medicare payments in 
those areas allow Medicare beneficiaries to choose between an HMO or 
traditional fee-for-

[[Page S7188]]

service plan, and, because area health care providers are reimbursed at 
such a high rate, those providers can afford to offer seniors a broad 
range of health care services. The twin in Madison would not have the 
same access to care. Because of low Medicare payments in Madison, there 
is no option to choose an HMO, and there are fewer health care agencies 
that can afford to provide care under the traditional fee-for-service 
plan.
  How can two people with identical backgrounds, who paid the same 
amount in payroll taxes, have such different options under Medicare? 
They can because the distribution of Medicare dollars among the 50 
States is grossly unfair to Wisconsin, and much of the Upper Midwest. 
Wisconsinites pay payroll taxes just like every American taxpayer, but 
the Medicare funds we get in return are much less than what other 
states receive.
  The low payment rates received in Wisconsin are in large part a 
result of our historic high-quality, cost-effective practice of health 
care. In the early 1980s, Wisconsin's lower-than-average costs were 
used to justify lower payment rates. Since that time, Medicare's 
payment policies have only widened the gap between low- and high-cost 
states.
  I have introduced a package of legislation that will take us a step 
in the right direction by reducing the inequities in Medicare payments 
to Wisconsin's hospitals, physicians, and skilled nursing facilities. 
At the same time, my proposals would establish pilot programs to 
encourage high-quality, cost-effective Medicare practices. My proposal 
would reward providers who deliver higher quality at lower cost. It 
would also require that the pilot states create plans to increase the 
amount of providers providing high-quality, cost-effective care to 
Medicare beneficiaries.
  Congress must modernize Medicare and add a prescription drug benefit. 
It should do so in a fiscally-responsible manner. And it must also 
restore basic equity to the Medicare program and stop penalizing higher 
quality providers of Medicare services.
  The issue before us is an important one. And it is important enough 
to do it right.
  Mr. THOMPSON. Mr. President, I rise today to discuss the important 
issue of adding a prescription drug benefit to the Medicare program. As 
a part of the debate on this drug pricing bill, we are considering 
amendments to provide Medicare beneficiaries with coverage for their 
prescription drug costs. This would be the largest expansion of any 
Federal entitlement program since Congress enacted Medicare in 1965. 
And as I listen to the debate, I am concerned that this body is 
ignoring some very serious issues, namely the cost of what we are doing 
and whether we can afford to take this action given the current budget 
situation.
  I think each of us here today would agree that the Medicare program 
is outdated. If we were creating this program from scratch right now, 
there is no question that we would include coverage for prescription 
drugs. Medicines have become integral to the treatment of disease, in 
many cases replacing costly surgical procedures. However, in our desire 
to address one serious flaw in Medicare, I am concerned that we are 
missing the broader questions of the impact of our actions on future 
generations of taxpayers and on the sustainability of the Medicare 
program. We cannot legislate in a vacuum.
  I want to begin my remarks by reminding my colleagues of the 
demographic time bomb we are facing in this country. The first wave of 
the 76 million baby boomers will begin retiring in 2008. Between now 
and 2035, the number of Americans over the age of 65 will double. We 
will go from having 3.4 workers to support Medicare and Social Security 
beneficiaries today to 2.3 workers by 2026. Not only is the over-65 
population growing rapidly, but they are living longer. Increased life 
expectancy is a good thing, but it also has serious implications for 
the Federal budget and entitlement spending.
  According to the Medicare Trustees' most recent report to Congress, 
the Medicare Part A Trust Fund is scheduled to be in a cash deficit 
beginning in 2016 and will go bankrupt in 2030. Spending on Medicare 
Part B, which covers outpatient services, is growing at a faster rate 
than our economy. Over the next 10 years, the Medicare trustees 
estimate that Part B spending will increase on average by 6.1 percent 
each year, compared to a growth rate in the economy of 5.1 percent per 
year. The Congressional Budget Office projects that Federal 
expenditures on Medicare, Social Security and Medicaid combined will 
grow from the current 7.8 percent of GDP to 14.7 percent of GDP in 
2030. I think it's important to remember that the Federal Government 
has generally taken no more than 20 percent out of the economy in taxes 
to fund the government. Entitlement spending is moving dangerously 
close to that limit.
  David Walker of the General Accounting Office testified before the 
Senate Budget Committee earlier this year, and he warned us that by 
2030, absent any changes to Social Security and Medicare, there will be 
virtually no money left for discretionary spending such as national 
defense, education or law enforcement. This estimate does not take into 
consideration any new spending Congress may authorize, such as adding a 
Medicare prescription drug benefit or increasing Medicare payments to 
health care providers. As inadequate as the current Medicare program 
may be, it is not sustainable even in its current form.
  In addition, I feel compelled to offer additional context to this 
debate. We all know that our world and budget situation have changed 
dramatically over the past 10 months. The latest projections from the 
Office of Management and Budget are that our deficit this year could 
reach $165 billion. In addition, the requirements of protecting our 
Nation and combating terrorism have placed urgent new claims on Federal 
resources.
  In fiscal year 2002, we will spend at least $29.2 billion on homeland 
security. The supplemental appropriations bill would spend an 
additional $5.8 billion, bringing the total to nearly $38 billion. The 
President's budget request for fiscal year 2003 proposes spending of 
$37.7 billion for homeland security. This amount is double what we were 
spending on homeland security items prior to the September 11 attacks. 
The Brookings Institute recently recommended funding of $45 billion for 
fiscal year 2003 on homeland security.
  We are also in the process of considering the President's proposal to 
create a new Department of Homeland Security. The cost of creating this 
new department could be another billion dollars. The truth is that we 
just don't have a good notion of how much homeland security spending 
will cost in the coming years, but we know that the costs will be 
tremendous, and we know that we must spend whatever it takes.

  On top of these security-related claims on our Federal resources, we 
need to remember that a majority of Congress just voted to increase 
spending on farmers by $90 billion above the current level over the 
next 10 years. I opposed that legislation, because I believe much of 
that money would be better spent on other priorities, including a 
prescription drug benefit. And let us not forget that we voted in May 
to create a new, $20 billion federal health care entitlement for 
workers displaced by trade. These things add up. We're spending money 
we no longer have.
  I do believe that Congress should address the needs of the one-third 
of seniors who have no prescription drug coverage now. But when I look 
at the cost of adding a prescription drug benefit, it is clear to me 
that there is just no inexpensive way to provide seniors with a 
meaningful drug benefit. CBO projects that seniors' spending on 
prescription drugs over the next 10 years will be $1.8 trillion. That 
is 21 percent higher than CBO's 10-year estimate from last year. 
Although two-thirds of that increase is due to the changing budget 
window, dropping the low-cost year, 2002, and adding the higher cost 
year, 2012, this projection still concerns me.
  The various Medicare prescription drug proposals we are debating have 
10-year cost estimates ranging from a low of $150 billion for the 
Hagel/Ensign, bill to $370 billion for the tripartisan bill, to as much 
as $600 billion for the Graham/Kennedy bill. Can we really rely on the 
accuracy of these numbers?
  Last year's budget resolution set aside $300 billion over 10 years 
for Medicare modernization and a prescription drug benefit. My 
colleagues on the

[[Page S7189]]

other side of the aisle strongly supported that $300 billion number as 
sufficient to pay for a Medicare drug benefit. If we were to trend that 
$300 billion forward one year, we would be looking at a $350 billion 
drug package. This year, the budget resolution that was reported by the 
Senate Budget Committee, but never passed by the full Senate, contains 
$500 billion over 10 years for a Medicare prescription drug benefit and 
for increased Medicare provider payments and for providing health 
coverage to the uninsured. How is it that we are even considering a 
$600 billion bill that would only provide prescription drug coverage?
  I am firmly in the camp of those who believe that we should not add a 
prescription drug benefit to Medicare without also making much-needed 
changes to strengthen the program. The Medicare and Social Security 
Trustees advise us that we can make relatively small changes now to put 
the Medicare and Social Security programs on sound financial footing 
for the future. But, the longer we wait, the harder it will be. This 
debate over a Medicare prescription drug benefit provides us with an 
excellent opportunity to begin taking steps that will make Medicare 
sustainable over the long term.
  I want to commend the members of the tri-partisan group for their 
efforts to put us on the path toward a strengthened Medicare program. 
They have worked hard for more than a year to craft their bill to 
provide a reasonable and permanent drug benefit, unlike the proposal of 
my colleague from Florida. And, they have drafted the only proposal 
that makes any meaningful improvements to the Medicare program. I 
believe that the tri-partisan proposal would provide greater security 
for today's seniors and for tomorrow's seniors. The new fee-for-service 
plan, Medicare Part E, would make the transition to Medicare more 
seamless for those Americans who are beginning to age into the Medicare 
program by providing them with a benefit that more closely resembles 
the private health plan they are used to. The tri-partisan bill would 
also provide seniors with protection from unusually high health care 
costs for the first time.
  I am deeply disappointed that the Finance Committee has not been 
given the opportunity to mark up either the tri-partisan bill or any 
other Medicare prescription drug bill. It is a shame that the Majority 
Leader has decided once again to by-pass the committee process, which 
might have yielded a product that could garner the 60 votes needed to 
pass a Medicare prescription drug benefit. Even more important is that 
we would not be in the current parliamentary situation of needing 60 
votes to waive a budget point of order on these bills if the Senate had 
passed a budget this year.
  In the likely event that neither of two comprehensive prescription 
drug proposals garners 60 votes, then I would hope we could at least 
pass the Hagel/Ensign proposal. The Hagel/Ensign amendment would 
provide the neediest seniors with assistance with their prescription 
drug costs. It would allow all seniors to benefit from group discounts. 
And, it would provide all seniors with protection from unusually high 
drug costs. These benefits could be implemented immediately, and the 
proposal would buy us time to find bipartisan consensus on an 
affordable, comprehensive Medicare prescription drug benefit.
  I hope we can carry forward the spirit of the tri-partisan group and 
work together to address the needs of our seniors who lack prescription 
drug coverage, bring Medicare into the 21st century and set it on sound 
financial footing, and do so while recognizing the new budget world in 
which we live.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Carnahan). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GRASSLEY. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Madam President, I yield back our 3 minutes.
  The PRESIDING OFFICER. All time is yielded back.

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