[Congressional Record Volume 149, Number 40 (Wednesday, March 12, 2003)]
[Extensions of Remarks]
[Pages E444-E445]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         THE MEDICARE Rx DRUG BENEFIT AND DISCOUNT ACT OF 2003

                                 ______
                                 

                       HON. JANICE D. SCHAKOWSKY

                              of illinois

                    in the house of representatives

                       Wednesday, March 12, 2003

  Ms. SCHAKOWSKY. Mr. Speaker, last week, President Bush announced his 
prescription drug proposal for Medicare beneficiaries. Rather than 
using this opportunity to promote a quality drug benefit that would be 
dependable and guaranteed for seniors and persons with disabilities on 
Medicare, the President instead announced his intention to provide a 
financial benefit to pharmaceutical and insurance companies. By pushing 
seniors into HMOs--the path to Medicare privatization--and doing 
nothing to lower drug prices, the Bush policy would enrich industry 
instead of reducing the financial burden on beneficiaries.
  Fortunately, an alternative plan, tailored to meet the needs of 
Medicare beneficiaries, would provide a comprehensive benefit that is 
both affordable and guaranteed. I support that plan, outlined by Leader 
Nancy Pelosi, Whip Steny Hoyer, and Representatives Dingell, Rangel and 
others, because it puts the needs of Medicare beneficiaries first.
  There is no benefit specified in the President's proposal. President 
Bush proposes that seniors enrolled in the traditional fee-for-service 
Medicare program would be eligible for catastrophic loss coverage, a 
discount drug card, and a $600 subsidy for those in the lowest income 
bracket. We don't know how much the catastrophic limit would be--
$5,000, $7,000, or more. A drug card and a requirement that you spend 
thousands and thousands of dollars out-of-pocket is not a benefit.
  There are several major problems with the President's proposal.
  First, a catastrophic-only benefit will help very few beneficiaries. 
The average Medicare beneficiary spends $2,500 a year for prescription 
drugs, meaning that they would get no benefit. For example, if the cap 
for catastrophic coverage is set at $6,000, it would only cover 8 
percent of Medicare beneficiaries. This enormous out-of-pocket expense 
is on top of existing Medicare cost-sharing requirements, which are 
already high.
  Second, the Bush administration continues to promote drug cards, even 
when evidence shows the cards provide little assistance. Seniors would 
purchase the card for approximately $25 and then receive only 10 
percent to 15 percent off their prescription drugs. In other words, an 
average beneficiary with $2,500 in drug bills would pay $2,125 to

[[Page E445]]

$2,250 under the Bush plan. In contrast, drug companies receive about 
$25 per person, per year from any number of the over 40 million current 
Medicare beneficiaries. Drug cards are marketed by private companies, 
and herein lies the true motivation to promote them.
  Not only do the cards provide a financial windfall for private 
companies, but they fail to offer meaningful assistance to Medicare 
beneficiaries. Even with the card, there is no guarantee that needed 
prescription drugs would be covered. Likely, drugs would have to be on 
a pre-approved list to be covered.
  Third, a $600 subsidy for Medicare recipients who are living at the 
poverty level is simply inadequate. Low-income elderly and disabled 
persons do not have the resources to purchase their medicine. Too 
often, they are forced to skip taking their necessary prescription 
because they can't afford it. President Bush's plan would offer the 
poorest Medicare beneficiaries a way to get $600 more worth of 
medicine, but unless they are eligible for Medicaid, they are still 
left to pay the rest of their costs on their own.
  Catastrophic coverage, discount cards, and a possible subsidy 
constitute the extent of the President's plan unless beneficiaries move 
out of the traditional Medicare program and into a private plan, such 
as a PPO or HMO. Currently 89 percent of Medicare's beneficiaries are 
enrolled in the traditional fee-for-service program where they can 
choose their physician. President Bush is effectively pushing them out 
of that program and into a private plan, where they would supposedly 
receive an actual drug benefit. However, the details of the actual drug 
benefit--the premium level, cost-sharing requirements, and value of the 
benefit itself--are not delineated in the President's proposal. The 
lack of detail present throughout the proposal is extremely 
disconcerting.
  Medicare+Choice is a haunting reminder of how private plans under 
Medicare can leave beneficiaries without choice, benefits, and 
providers. The plans not only lowered benefits and raised cost-sharing, 
but in many places pulled out of the market altogether. The drug 
benefit that Medicare+Choice initially offered has since largely 
dissipated. In 1999, only 11 percent of Medicare+Choice enrollees had a 
drug cap of $500 or less, meaning that plan would only cover up to $500 
of drug costs. By 2002, that percentage exploded, leaving 50 percent of 
enrollees with a drug cap of less than $500. Since 1999, 2.4 million 
beneficiaries have been dropped from the Medicare+Choice program 
completely. In over 30 years, the Medicare program has never dropped a 
beneficiary from coverage.
  The Administration wants to use the drug benefit as a carrot to lure 
beneficiaries into private plans. This forces elderly and disabled 
populations to choose between doctors they know and trust and the 
medications they know they need. We are not fooled by what the 
administration is doing. They have no intention of offering a drug 
benefit to Medicare recipients. The reason why President Bush is 
pushing this approach is because he is attempting to privatize the 
entire Medicare program.
  It is imperative that we critically examine the risks involved in 
pushing beneficiaries into private plans, even though the list of 
concerns is long and daunting. Private insurance plans are inherently 
risky and unstable. Covered benefits would vary from plan to plan, from 
state to state, from one year to the next--leaving millions of 
beneficiaries with unstable coverage, if any at all. Private insurance 
plans are not available in every city or state, can drop coverage at 
any time, occasionally go bankrupt, and can be taken over by other HMOs 
that later change the rules. Under Medicare, the same basic package is 
available everywhere.

  In addition to reducing benefits, private plans could raise premiums, 
increase copayments, restrict formularies, and limit choice of doctors 
or pharmacies in order to offset costs. Between 2001 and 2002, average 
monthly premiums increased 40 percent for Medicare+Choice enrollees. 
Enrollees in these plans have also been subjected to rising copayments 
for both generic and prescription drugs. Private plans can restrict 
formularies thereby dictating and restricting covered drugs. In fact, 
some private plans have completely eliminated coverage of brand-name 
prescription drugs. This is especially troubling, considering that of 
the 50 drugs the elderly most commonly use, 40 are brandname drugs, and 
only eight of these are available in a generic version. Private plans 
restrict beneficiaries to those doctors or pharmacies included in a 
particular plan. Even though the elderly and persons with disabilities 
often choose their physicians or their pharmacies based on nearness and 
accessibility, private plans would not take this into account.
  I am not willing to compromise the health and well-being of senior 
citizens and people with disabilities so that private companies can get 
rich. Medicare beneficiaries deserve a real and substantive drug 
benefit regardless of the Medicare plan they are enrolled in. For those 
reasons, I support the House Democratic prescription drug proposal, the 
Medicare Rx Drug benefit and Discount Act of 2003.
  The House Democratic proposal adds a new Part D in Medicare that 
provides voluntary prescription drug coverage for all Medicare 
beneficiaries beginning in 2006. Those wanting the benefit would pay a 
$25 monthly premium and a $100 deductible for drug coverage. Medicare 
would pay 80 percent of drug costs, 100 percent after beneficiaries 
spent $2000 out of their own pockets on prescriptions. Full coverage of 
premiums and assistance would be provided for persons with incomes 
below 150 percent of poverty and sliding scale premiums would be in 
effect for those persons between 150 percent and 175 percent of the 
poverty level.
  Under the Democratic proposal, strong measures will be implemented to 
keep drug-prices down. First, the Secretary of Health and Human 
Services (HHS) would use the collective bargaining clout of more than 
40 million Medicare beneficiaries to negotiate fair drug prices. 
Second, drug companies will be prevented from extending patents that 
allow them to use their monopoly power to block competition and keep 
prices artificially high.
  The Medicare Rx Drug Benefit and Discount Act of 2003 offers a real 
benefit to Medicare beneficiaries as opposed to drug companies. Bush's 
proposal is served up as a gift to drug and insurance companies that 
have financed Republican elections and agendas. If the President has 
his way, insurance and drug companies will profit, but millions of 
Medicare beneficiaries will still lack affordable, comprehensive 
coverage.

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