[Congressional Record Volume 149, Number 94 (Tuesday, June 24, 2003)]
[House]
[Pages H5801-H5802]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       DO NOT PRIVATIZE MEDICARE

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Pennsylvania (Mr. Hoeffel) is recognized for 5 minutes.
  Mr. HOEFFEL. Mr. Speaker, there are two things wrong with the 
Republican prescription drug bill. Perhaps more than just two but two I 
wanted to talk about this evening.
  The first is this bill would privatize the program. It would 
privatize the prescription drug benefit and it would privatize Medicare 
itself. The second thing wrong with the Republican prescription drug 
bill is that it would actually forbid, prohibit, any negotiation

[[Page H5802]]

by the government with pharmaceutical companies to bring down the cost 
of the drugs.
  Now, let me address the first question. Privatization of this 
proposed drug benefit is a very bad thing. It would, instead of 
establishing a drug benefit in Medicare, a guaranteed benefit set by 
the government, responsible to the Congress as all of the rest of 
Medicare has been situated and constituted for the past 40 some years, 
the Republican plan would set up a prescription drug plan through 
private insurance companies and HMOs.
  Now, those companies have a pretty bad track record in terms of 
delivering the same product year after year at the same price. In fact, 
they do not. And in the Medicare+Choice program, at least in the 
Philadelphia area that I represent, the private HMOs have been 
increasing the costs of Medicare+Choice, taking away the benefit, 
making a program that they offered a very elaborate benefit at a 
relatively low cost and taking away those benefits and increasing the 
costs.
  The same thing would happen if we set up a prescription drug program 
through a privatized insurance based system.
  The second thing wrong with this privatization is after 10 years they 
will privatize Medicare itself through this voucher concept that would 
have vouchers made available in a particular area based upon all of the 
bidding done by private companies and HMOs as well as Medicare. And 
that balanced figure, that blended figure would be the voucher provided 
for an individual to purchase Medicare. And what would happen is the 
companies would undercut Medicare, they would attract younger seniors 
and healthier seniors, they would be allowed, therefore, to save money 
because they would not be paying as many bills, and each year in each 
cycle of bidding those private companies would be able to drop their 
premiums lower than what Medicare would have to charge. Medicare would 
be stuck with older seniors and sicker seniors and it would be the end 
of Medicare as we know it. That is what this is going to be achieved if 
we allow the privatization of Medicare in this bill.
  The second major problem is the prohibition on negotiating with the 
drug companies for lower prices. I do not get it. I do not understand 
it. What is the point of setting up a Medicare based prescription drug 
plan if we do not use the Federal Government's bargaining power to 
negotiate with the large pharmaceutical companies for a lower price? 
That is the whole point. That is why other countries that have large 
bargaining units negotiating with the pharmaceutical companies have 
much lower prices than we do.
  The Committee on Government Reform under the ranking member, the 
gentleman from California (Mr. Waxman), just did a study in my 
district. The seniors in the 13th Congressional District of 
Pennsylvania benefit paid twice as much for their drugs as seniors pay 
for the very same drugs on average in Canada, England, France, Germany 
and Italy, twice as much because those countries have a combination of 
bargaining power that they use to negotiate with the drug companies for 
lower prices.
  This Republican bill prohibits such negotiation by the Secretary of 
HHS with the drug companies. That is nonsensical and that alone is a 
good reason to vote no. Those are two reasons. There are many more. We 
should defeat this bill. Pass the substitute proposed by the gentleman 
from New York (Mr. Rangel) and the gentleman from Michigan (Mr. 
Dingell) and give seniors a real prescription drug program.

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