[Congressional Record Volume 149, Number 99 (Tuesday, July 8, 2003)]
[Extensions of Remarks]
[Pages E1415-E1416]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        MEDICARE PRESCRIPTION DRUG AND MODERNIZATION ACT OF 2003

                                 ______
                                 

                               speech of

                        HON. JAMES C. GREENWOOD

                            of pennsylvania

                    in the house of representatives

                        Thursday, June 26, 2003

  Mr. GREENWOOD. Mr. Speaker, I support this new, innovative Medicare 
prescription drug benefit, and commend Energy and Commerce Committee 
Chairman Tauzin and Health Subcommittee Chairman Bilirakis for 
developing a proposal that is fiscally responsible, modernizes the 
Medicare program, and delivers a sound prescription drug benefit.
  A prescription drug benefit in Medicare is the most important social 
policy that Congress can deliver this Congress. Period.
  My home state of Pennsylvania has the second highest number of 
seniors in the country, and these seniors are living longer, healthier 
lives, thanks in part to modern medications. Death rates from heart 
disease, cancer and stroke are going down, and hundreds of new 
medications are now being developed to combat diseases of aging, 
including Alzheimer's, Parkinson's, and arthritis.
  Unfortunately, along with these new drug therapies comes a higher 
price to those that need them. Seniors without adequate access to these 
drugs will not be able to benefit from the stunning advances in health 
care resulting from the newest pharmaceutical products. Society will 
spend more money on their health care, because many new drugs actually 
serve as preventive measures and often prevent costly hospitalizations.
  Medicare in its current form does not cover most prescription drugs. 
When it was created in 1965, it was a good program for its time. 
President Johnson, on signing Medicare into law on July 30, 1965, said, 
``No longer will older Americans be denied the healing miracle of 
modern medicine. No longer will illness crush and destroy the savings 
they have so carefully put away over a lifetime so that they might 
enjoy dignity in their later years.''
  But with advancements in drug treatment, modern medicine has grown 
increasingly expensive, as Medicare does not pay for these wonderful 
outpatient drugs. We need to modernize Medicare. As long as Medicare 
does not cover outpatient drug benefits, seniors will not be as healthy 
as they could be, and they will pay more out-of-pocket costs for 
preventive medications.
  Nearly two-thirds of seniors have some insurance coverage that helps 
pay for prescription drugs through private employer plans or 
supplemental (Medigap) coverage; however, the remaining third has 
absolutely no coverage for prescription drugs.
  This is not good enough. Seniors, living on limited income, should 
not be the last payers of retail prices for drugs in our great country. 
But we should not impose price controls so that seniors can afford 
their prescriptions. Instead, we need to use the tools that the private 
sector does, using leverage and bargaining for discounts. Medicare 
needs to take advantage of reduced prices that we can achieve using the 
tools that are used by private entities, operating in the employer-
provided health care market.
  We need to be careful about how we reform Medicare. Those two-thirds 
of seniors who have drug coverage are pleased with what coverage they 
have and don't want a big government solution that could increase their 
costs. Congress passed the Medicare Catastrophic Coverage Act in 1988 
with the intention of easing the cost of catastrophic events for 
Medicare recipients. However, instead of helping, it made things much 
worse for seniors who already had catastrophic coverage. They ended up 
paying more out-of-pocket for fewer health benefits. It was so 
devastating that Congress was forced to repeal the legislation the very 
next year.
  Mr. Speaker, this bill finds the right mix. It establishes a generous 
prescription drug benefit, using the private sector tools that provide 
significant savings for seniors when they purchase prescription drugs. 
And, it reforms and strengthens the Medicare program in the right way.
  This bill also provides significant relief to seniors in Pennsylvania 
by strengthening the Medicare+Choice program. Over the past few years, 
seniors who have enrolled in Medicare+Choice have seen programs 
increase their premiums, decrease their benefits, or leave the program 
altogether. For example, in the largest plan in my district, seniors 
have seen their premiums rise from $0 to $94 per month.
  This bill stabilizes the Medicare+Choice program. And, it 
fundamentally reforms the program by creating the ``MedicareAdvantage'' 
program. This program provides for significantly more stability by 
allowing for competitive bidding by the plans. The MedicareAdvantage 
program will help these plans so that they remain a viable option for 
millions of seniors, and continue to provide a variety of health 
services, such as vision, hearing, and preventative care that are not 
offered through the traditional Fee for Service program.
  Mr. Speaker, let me talk for a minute about the reforms in the bill. 
It provides for the creation of a new enhanced fee-for-service program 
that gives beneficiaries new options and choices for services. Finally, 
the Medicare program will incorporate the most popular option in 
private health insurance (and the health insurance offered in the 
federal employees health benefits program), preferred provider 
organizations (PPO). These new PPOs will create significant new options 
for services for seniors.
  Furthermore, this bill will not only include improving access to 
prescription drugs, but will modernize the Medicare program by 
increasing the availability of wellness programs and streamlining the 
often cumbersome paperwork that seniors face in getting Medicare 
benefits.
  Finally, I am pleased that H.R. 1 has included provisions to reform 
the payments for the drugs that Medicare does cover in part B. These 
reforms represent the culmination of a multi-year investigation by the 
Energy and Commerce Committee.
  Presently, providers are reimbursed for the cost of these drugs at 95 
percent of the average wholesale price (AWP). Congress and Medicare 
officials have wrestled for years with the difficult issue of how to 
set a fair and appropriate Medicare reimbursement rate for prescription 
drugs covered by Medicare part B. The reimbursement benchmark we have 
used since the early 1990s has been the AWP, which is reported by drug 
companies and price reporting services. prior to that, providers were 
reimbursed on a cost basis, which is cumbersome and inflationary.

[[Page E1416]]

  Over the past decade, what we have learned is that the AWP is a 
fictitious number that must be changed. Rather than an accurate 
barometer of the price at which physicians purchase the drugs used in 
their practice, the AWP benchmark is more like a car's ``sticker 
price,'' which is usually much higher than the actual acquisition cost. 
Under competitive pressure, manufacturers and wholesalers will 
routinely discount drug prices to physicians, lower their cost, while 
maintaining a higher AWP. In a competitive spiral, these discounts 
grow, increasing the net profits on the drugs, while the Medicare 
program continues to pay the higher AWP.
  Unfortunately, due to the 20 percent copay that all beneficiaries pay 
for part B services, Medicare beneficiaries presently pay $200 million 
more than they should in inflated co-pays. What's more, the Medicare 
program itself pays over $1 billion more than we should.
  The new system, based on competitive bidding and choice, pays 
appropriately for drugs and reimburses physicians appropriately for 
services. Under this new model, we provide physicians a choice--either 
continue to do business as they have or enter a new program that 
provides drugs to physicians for administration on a replacement basis. 
These reforms are fair, sound and must be enacted.
  Earlier this year, Congress set aside $400 billion for the 
development of a prescription drug benefit in Medicare. This is a 
significant and meaningful commitment by Congress for our Nation's 
seniors. Some may quibble about the size of the benefit. However, I am 
convinced that we can pass legislation so that every senior has access 
to the latest prescription drug products and has catastrophic coverage 
for very serious, very costly medical conditions. We owe it to our 
seniors to pass and have the President sign into law, a prescription 
drug benefit this year.

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