[Congressional Record Volume 149, Number 100 (Wednesday, July 9, 2003)]
[House]
[Pages H6448-H6455]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
A MEDICARE PRESCRIPTION DRUG PLAN IS NEEDED
The SPEAKER pro tempore (Mr. Gerlach). Under the Speaker's announced
policy of January 7, 2003, the gentleman from New Jersey (Mr. Pallone)
is recognized for 60 minutes as the designee of the minority leader.
Mr. PALLONE. Mr. Speaker, I do not expect to use all the time unless
I am joined by some of my Democratic colleagues, but the purpose of my
being here this evening is to talk about the need for a Medicare
prescription drug plan; and as my colleagues know, just before the
break, before the July 4 break, we did here in the House pass a
Republican Medicare prescription drug proposal and another bill was
passed in the other body that was sponsored by the Republican
leadership, and I just wanted to say as emphatically as I could this
evening that I believe very strongly that neither of these proposals,
which would now go to conference, that neither of these proposals
accomplish the goal of providing America's seniors with a prescription
drug benefit that is worth having.
I say that because I think it has to be understood that the effort to
provide a prescription drug benefit is basically an effort to, in my
opinion, or at least
[[Page H6449]]
it has been sold as such by the President and the Republican
leadership, as an effort to try to get almost all seniors involved on a
voluntary basis in a prescription drug program that they would see as
meaningful, that covers most of their drug expenses, and if we look at
the bills that were passed by the Republican leadership in both Houses
of Congress, they do not do that.
Essentially what happens is that seniors have to pay out more in
terms of premiums than they would get for the most part. If we have a
voluntary program that most seniors do not sign up for, which is I
believe strongly what would happen if either of these proposals became
law, then we would not end up with the universality that is necessary
for an insurance program like Medicare where, in the case of the
existing Medicare program that pays for your hospital bills and your
doctor bills, 99 percent of seniors sign up. If 10 or 15 percent of the
seniors sign up for the proposal that has been passed in either House,
effectively the program would be a failure because most seniors would
not join. You would not have an insurance pool that actually went
across the board and covered all seniors, and I am very fearful that
that is what would result from either the bill that was passed here in
the House, proposed by the Republican leadership, or the bill that was
proposed by the Republican leadership in the other body.
I see that I have been joined by one of my colleagues, and I just
wanted to say before we get into a little dialogue hopefully among the
Democrats that the Democrats proposed in the House a substitute bill
which most Democrats supported and a few Republicans, I believe, that
basically would be along the lines of the existing Medicare program and
would be the opposite in the sense that I believe 99 percent of seniors
would sign up for the program because it is generous enough to provide
prescription drug coverage that most seniors would want to take
advantage of.
Essentially what we did in our Democratic alternative to the
Republican bill was to model the program on the existing Medicare
program. Under the existing Medicare program part A, seniors' hospital
bills are paid for. Under the existing Medicare program part B,
seniors' doctors' bills are paid for, and if I could use that as a
model because that is essentially what the Democrats used as a model.
Under part B, right now you pay a certain amount which I think is
maybe $45 a month premium. You have a $100 deductible so when if you go
in January and your doctor bill is a little over $100, that first $100
is not paid for. That is the deductible, but after that, 80 percent of
your costs are paid for by the Federal Government, and you have a
copayment of 20 percent for your doctor bills.
It makes sense to go that route because most seniors, 99 percent,
realize that part B is worth having. So they pay the $45 a month, and
they get 80 percent of their costs after the $100 deductible paid for
by the Federal Government, and it is a good bargain. You are paying so
much a month, but you are getting a lot back in terms of value.
So we as Democrats said, well, let us do the same thing. This has
been a very successful program, part B; 99 percent of the seniors sign
up for it. This has been a very successful program when it comes to
paying the hospital bills or your doctor bills. Let us follow the same
example with regard to prescription drugs, and our Democratic
alternative, or substitute, said that seniors would pay $25 a month
premium. They would have a $100 deductible, just like part B; and 80
percent of the cost of their prescription drugs would be paid for.
There would be a 20 percent copay, up to $2,000. Once a senior expends
$2,000 out of pocket for the copay, then 100 percent of the costs are
paid for by the Federal Government.
I do not understand why this is so difficult to comprehend and why
the Republican leadership or the President cannot simply go along with
this. It is modeled after a very successful Medicare program. Seniors
will quickly understand that it is a good benefit. They will sign up
for it. I guarantee 99 percent of the seniors, if not close to 100
percent, would sign up for this type of a program and take advantage of
it.
Instead, the Republicans say now we cannot do that for various
reasons. We can get into that if my colleagues like; but they say, oh,
no, no, we cannot do that. They come up with a very complicated,
confusing, in my opinion, way of trying to administer a prescription
drug benefit that relies on private plans that for the most part says
that you have to join an HMO or some kind of managed care program to
get any kind of drug benefit, which means that you lose your choice of
doctors and possibly your choice of hospitals. They do not provide, as
I said before, any kind of meaningful benefit even with the
privatization and the fact that you are forced into an HMO.
I just wanted to give an example of why I think that these two, both
the House version and the Senate Republican version, are unworkable and
just briefly.
This is the Senate bill which some people feel is better, but I do
not really think is. It is maybe slightly better than the House bill,
but not anything that anybody would sign up for.
Under the Senate bill, a beneficiary would pay $420 a year in
premiums, would have a $475 deductible, and after the deductible is
met, a beneficiary in Medicare would share the costs. In other words,
50 percent of your drug bills would be paid for by the Federal
Government, 50 percent you pay out of pocket, up to $4,500 in total
drug expenses, and then there is what we call a doughnut hole. If your
drug bills are from $4,500 to $5,800, you pay 100 percent of the costs,
and then after that, over $5,800 you pay 10 percent.
Now, when I say seniors will not want this, keep in mind what you are
talking about here. You are talking about a premium that you have to
pay per month. You have not a $100 deductible, but a $275 deductible;
but then only 50 percent of your costs are paid for by the Federal
Government. You have to pay the other 50 percent and there is this
doughnut hole at some point where the Federal Government does not pay
anything. Why in the world would you sign up for it?
I talked to my seniors during the July 4 break. I met a lot of them.
I asked them a lot of the question, would you sign up for that. Most of
them said no. The only way you would sign up is if your drug bills were
so expensive and you had enough money to not only pay the premium but
also to pay the 50 percent copay; and most seniors, unless they are in
certain financial circumstances and they have a huge drug bill expense,
they would not do it.
The House bill is even worse. Under the House bill, there is $420 in
premium, $250 deductible; and after the deductible is met, the
beneficiary in Medicare would share drug costs 80/20, like I said with
the Democratic bill, 80 percent paid for by the Federal Government, but
only up to $2,000 in total drug expenses. After that, from $2,000 to
$4,000 or to $4,900, the senior pays 100 percent of the costs. Again,
why in the world would you sign up for such a thing?
Essentially, if you look at the situation in the House version, the
majority of seniors fall into the doughnut hole, and most seniors under
the House or the Senate bill would end up paying more out of pocket
than they would benefit from the Federal Government.
So what we have been saying, Democrats, is the Republicans are
essentially involved in a sham here. The President says, oh, okay, we
are going to provide prescription drug benefits. The House Republicans
and the Senate Republicans say we are going to do it, but the benefit
is not worth what you pay out. You have to join private plans for the
most part, which means an HMO, and you lose your doctor. You might even
lose your choice of hospital. Why in the world would you sign up for
it?
If you do not adopt the type of program like the Democratic
substitute, which is modeled after the existing Medicare program, the
bottom line is you do not have a program that has any meaning to
seniors, and I am just afraid we have this huge hoax that is being
played upon us by the Republican leadership and the President. If
something actually comes out of the conference and is signed into law,
people are not going to know they are getting something that is
meaningless. They will not even find out till 2006 what it really means
because it does not go into effect for another 3 years; and in the
meantime, I guess the President and the Republicans can go around and
[[Page H6450]]
say we have done something for prescription drugs, but they really
would not have done anything at all.
I see my colleagues are here; and I would like to yield, first of
all, to the gentleman from Washington who is a physician and member of
the Committee on Ways and Means and has been a leader on this issue,
and I have to say to my friend that I know he has been active for
universal health care, and we do not have a majority in this House to
pass a universal health care, but I support it because I really believe
that ultimately we have to have a health care program that does not
just deal with drugs but deals with all health care and that everyone
can take advantage of. So I admire his work, and I would like to yield
to the gentleman.
Mr. McDERMOTT. Mr. Speaker, I want to commend the gentleman for
having this, staying up here at 10 o'clock at night, talking about this
issue because I think the people need to understand the idea of
universal health care is that everybody puts into the pot, and then
when they get sick, they take out of the pot. Nobody, when they pay for
their health insurance, stands around saying, gee, I hope I get sick so
I can take something out of the pot. That is not the way people think.
We have given universal health care to senior citizens. We have said
anybody over 65 in this country is eligible for Medicare, and we put
them all in together; and they put all their money in together
collectively, and we put together a Medicare program that has worked
very well since 1964. It has not required people's children to pay for
anything. They have been able to have their own dignity. They had their
own card. They paid for their own health care during all that period.
I sat on the Medicare commission. I was one of the 16 people sitting
on that commission for a year back in the mid-1990s, and there is a
determined effort by the Republicans to privatize Medicare.
What does privatize mean? It means to separate all the American
people from one another and make them deal individually with this
particular problem in their life, their health care.
{time} 2200
They would be given a voucher, and they could privately go out to a
private insurance company and find somebody who would give them a
benefit.
Now, if we were to take my mother and myself, my mother is 93 and I
am 65, if we were to take those two people and say, send them out with
the same amount of money, we know that they are going to get different
benefits. Well, they have tried this. They have offered the Medicare
through an HMO, and people went and joined, and then the HMO closed,
and they lost all the benefits. And people have been jerked around over
the last 4 or 5 years by this whole process, but they are determined.
And this bill is the real final effort to do that.
It is kind of like when I was a little kid. My mother wanted me to
take cod liver oil. There was some vitamins in it, and she wanted me to
have those. But cod liver oil tastes terrible, so she would always mix
it with orange juice. That is exactly what they are doing here. They
want people to take the cod liver oil of privatizing health care, and
they are filling the glass with orange juice, which is the drug
benefit.
So that is the first thing people have to understand. The drug
benefit is not intended to give them a drug benefit, it is to get them
to drink the cod liver oil, the privatization of Medicare.
Now, how did they design this? Why do I say they do not intend to
give a drug benefit? Very simple. They said, well, let us put up $400
billion. Now, that sounds like a lot of money to people. I mean, it
sounds like a lot to me. But if we are going to fix the problem right,
to do the deal right, it is going to take way more than that, probably
twice that amount. But they just said, well, we will put $400 million
in, and we will kind of mix it around so people will not see what we
are really doing.
Worst of all, as my colleague pointed out, this does not go into
effect until 2006. They can put advertisements on television in the
next campaign in 2004, or in 2006 they can put advertisements out and
say, we gave you a drug benefit, because it will not go into effect
until 2006. Now, most Americans look at politicians and they say, I do
not know if I can trust them or not, and I want to see what actually
happens. Well, when you put something out there so far, the people will
never know that what they see advertised in the 2004 campaign, with all
these millions of dollars of ads from the drug companies and from the
Members of Congress who voted for this, that, in fact, it was never
intended to work.
Now, I will tell you why I know that. I was walking through the
tunnel between the Capitol and one of the office buildings today, and
one of the Republican Members said to me, do you think this bill is
ever going to come out of the conference committee? Do you think the
Senate and the House will ever solve it and bring a bill back to the
floor? I said, no. He said, I do not think so either, and we hope it
does not. This was a Republican talking. We hope it does not. I said,
you do? He said, well, it is not a good plan. It does not solve the
problem.
So they know it does not solve the problem, but they want to say, I
voted for a pharmaceutical benefit, and my opponent opposed it. Or my
opponent does not think it is good, but I wanted to give
pharmaceuticals to senior citizens. They have no interest in the
reality of this bill.
Now, I think there is a couple of things that are really sort of
buried in this bill that people have to understand. They said we do not
want the Secretary of Health and Human Services to negotiate for all
the 40 million old people in this country. We want each little
insurance company to negotiate with the drug companies as best they
can. Every other country in the world that has an industrialized
country like us, France, Germany, Canada, anybody, the government
negotiates for everybody. My colleagues know that that works better.
If I were to go into a store and say, I want to buy 100 loaves of
bread, I will get a better price. It is going to be less per loaf than
it would if I were to buy one loaf at a time. But the Republicans set
this up so that Tommy Thompson, the Secretary of Health and Human
Services, cannot go and negotiate for them. They made it impossible to
save money, or save big money.
We know what happens in the Veterans' Administration, we get a 50
percent discount because they negotiate a price for every veteran. All
5 million of them get the benefit of a negotiated price for 5 million
people. But when it comes to seniors, we say, no, no, you are on your
own, Grandma. You can go 1 at a time or 2 at a time or 10 at a time, or
whatever, but you cannot have the benefit of this. I think that alone
should make people sort of wonder about this.
The second thing they do is that they say, well, you can go into a
Medicare HMO, some kind of health maintenance organization, and get
your benefits, if they will take you; or you can stay in regular
Medicare with your doctor that you have known for the last 30 years and
knows everything that has ever happened to you, so that when you go in
the doctor does not have to say, well, let us start with when you were
6 years old; when did you have the mumps; when did you have the
measles?
You know, when you get to be 65, or like my mom, 93, who remembers
what year it was that you had the measles? You want a doctor that knows
you and that you have dealt with for 30 or 40 years, so that they say,
well, Mrs. McDermott, how is X, or whatever the problem is that they
have been following. Seniors do not want to have to start over again
with a new physician.
But they say if you stay in Medicare, you are going to have to pay
more for the drugs. Now, the problem with that is that drives up the
premium. Right now the premium for seniors is something under $60.
HCFA, the Health Care Financing Administration, that administration
says that the premiums next year, if this bill goes into effect, would
go up to $90 a month for nothing. It would just go up $90. Why? Because
the sick people would stay in Medicare, the old standard Medicare, and
the healthy ones would go get into these HMOs where they could get a
better deal. So sick people who want to stay with their doctor are
going to be stuck paying more money than people who are younger and
healthier and are acceptable into some kind of an HMO.
I believe, and what the gentleman is saying, is that it should be a
Medicare benefit that everybody gets in the
[[Page H6451]]
whole United States. It does not make any difference whether you live
in Ohio or New Jersey or Washington or Atlanta, Georgia, or wherever,
you ought to get the same benefit. It should not be dependent on
whether you can find an HMO that negotiates better or anything else.
For instance, maybe a parent would like to move from Tennessee, where
they had a pretty good deal, to Montana where their kids are living.
They want to move to Montana because they want to be near the
grandkids. That is what my parents did. My parents left Oklahoma in
1972 to live with us in Washington State when my dad retired and there
were grandkids. My mother said, hey, we are going out to be near the
grandkids. Well, why should there be any difference in the benefit
between Oklahoma and Washington State?
This bill will guarantee that there is a difference. It may be
better, it may be worse. My parents would not have anything to say.
Anybody who moves under this new system will have no idea what they are
going to.
And then there is this question of a donut hole. Frankly, the bill
mystifies me in that it seems to imply that the Republicans think that
old people are not paying attention; that somehow we are going to
whistle this past them, and they will not see what this is about. My
colleague explained it. First of all, the Democratic plan is the only
one that says what the premium will be, $25 a month, and there is a
$100 deductible. They spell it out in the law. The Republicans do not
give us that. They say there will be a premium, and there will be a
deductible, but people are buying a pig in a poke right off the bat.
Then you pay for that, and, at a certain point, you do not get any
benefits. You are still getting your monthly bill for your premiums.
You have to keep paying those premiums. Meanwhile every bit of drugs
you pay for you have to pay all out of your pocket.
Now, I tried to explain this at a couple of retirement homes in
Seattle, and people just say, that does not make any sense. What are
they trying to do? What is this about? The minute you explain to people
what this really does, it falls apart flat. And yet they are coming in
here, pressing this bill and talking about all the things they have
done. But people should remember that it is not passed until it goes
into effect. And there, I think, is going to be a very big fight
between the Senate and the House on this issue because the Senate does
not want to privatize health care. They are resisting the idea of
putting the orange juice with the cod liver oil. They said, no cod
liver oil. This is orange juice.
They are doing a drug benefit over there, and in some ways that makes
it a little better. It is not as generous maybe as ours is, but neither
one of them works very well. The only bill that really works is the one
the House Democrats put out which gives people a fixed payment and a
fixed deductible and a fixed amount that they have to pay 'til
whenever.
And nobody wants this benefit. This idea that you are going to get an
insurance company running in to offer an insurance policy to all the
seniors, just ask yourself, and you do not have to be a rocket
scientist to know why this will not work, who buys an insurance policy?
You do not buy an insurance policy unless you have a car, right? You do
not buy fire insurance if you do not own a home. Why would you buy
this, paying month after month for a drug benefit, if you did not need
any drugs? As soon as you need them, boy, you want to run in right away
and get it. But why would seniors, if they had something else or they
were tight with money, they would say, why should I buy it?
So the only people who are going to buy are people who have big drug
bills. Maybe they have cancer and their cancer treatments are very
expensive, or maybe they have had a kidney transplant and they have
drugs that are very expensive. There are a whole raft of conditions
which require people to spend an awful lot on pharmaceuticals. Those
are the people who are going to buy it. So an insurance company is
sitting there saying to themselves, no way.
The way insurance companies work is you sell a premium to everybody,
and then you hope nobody gets sick so you can give all the money that
is left to your stockholders. That is how they work. It is no mystery,
and it is not wrong. It is the way they operate. Well, why would you
want to take in a bunch of sick people who want drugs and give them a
drug benefit?
Well, the government, these guys recognize that. They realize the
insurance industry will not do it. So what they said was, I know what,
we will let them offer the plan, and then we will take 99 percent of
the risk. The Congress will take it. And if there is any profit to be
made, the insurance company can take it out the door.
This is absolutely a fraud for the government to use all of its money
and not try and control it, not look for the fraud and the waste and
the abuse; turn it over to the insurance company, who has no risk.
None. There is no explanation for why they would come up with a plan
like this except that they hope it does not pass.
And I hope it does not pass. I would like a real bill to pass,
because God knows people are really having trouble, and there are so
many things we could do that would not be hard to do.
I see my colleague has brought some things here about the Canadian
plan, and I will just say one or two more things and then turn it over
to her.
The Canadian Government did not go through any big plan or anything,
they just passed a law that said that the price you pay in Canada is
going to be the average of the G-7 countries. Now, the G-7 countries
are the seven most vibrant economies in the world, Japan, Germany,
France, Great Britain, the United States, and so forth. So whatever the
price is in Germany, they write that down, write down the price in
France, add them all together and divide by seven, and that is the
price in Canada. They never pay above the median. They always pay in
the middle.
Now, that is why people leave my State on buses on a weekly basis to
go up to Canada. Anybody who lives near the Canadian border knows about
this. Or they have pharmacies up there, and they mail in up there, and
they have it all worked out so they can get them filled and have them
sent back. What the pharmaceutical companies are doing now, just to
show you how much they hate that, they have cut off the amount of drugs
going to these pharmacies in British Columbia, which is north of
Washington State.
{time} 2215
Mr. Speaker, they say to them you could not possibly sell this many
drugs in British Columbia, so we are only going to give you 40 percent
of your order so they cannot ship the other 60 percent down to the
United States. They are cutting off their supply. It is incredible the
lengths to which the pharmaceutical industry will go.
In closing, in case Members would like to shed a tear for
pharmaceutical companies, the Fortune 500, which is the 500 biggest
companies in the United States, 10 of those companies are
pharmaceutical companies. Those 10 companies last year had a profit of
$38 billion. That was 50 percent of all 500 companies. Ten companies
produced 50 percent of the profit of the whole of the Fortune 500.
Now, I believe in research, and I believe in all of the things that
pharmaceutical companies do, and I am not against pharmaceutical
companies; but I think enough is enough. I think my colleague who has
some Canadian prices here will make a very interesting case on this
point.
Mr. PALLONE. Mr. Speaker, I yield to the gentlewoman from Ohio (Ms.
Kaptur), who has been a leader on this issue.
Ms. KAPTUR. Mr. Speaker, I thank the gentleman for organizing this
Special Order tonight, and certainly the people of New Jersey have sent
the right Member here to fight this great fight. It is a privilege to
stand here also with the gentleman from Washington (Mr. McDermott), who
is such a critical member of our Committee on Ways and Means and knows
more about this probably than any other Member of the House, and has
fought so hard to maintain the Medicare program that our Democratic
forebears created, and we proudly stand on their shoulders. To stand
here with both you gentlemen tonight is truly an honor.
I wanted to mention, as the gentleman from Washington (Mr. McDermott)
said, the pharmaceutical companies around this Nation are making
unbelievable profits off the pocketbooks of our senior citizens and
their
[[Page H6452]]
families, and to also mention that the reason we have such a terrible
bill before us in the House and why we were denied the opportunity to
offer a Democratic alternative, we were not even given a chance to
debate our alternative, is because these very same pharmaceutical
companies helped elect the people who have created this bill for the
Congress.
And an organization like PhRMA gave 95 percent of its political
contributions last year to one political party, the party that
prevailed by one vote here in this House 2 weeks ago in getting this
very flawed bill before us. Now, the Republican Party has produced a
bill that is really a trick on the senior citizens of this country. It
is a trick because of the language they use in the title that does not
bear out real substance on the inside. Let me give a couple examples
just to refine what my colleagues have talked about tonight.
I think the gentleman from New Jersey (Mr. Pallone) talked about the
Democratic bill, which we were not allowed to offer, had a maximum
premium per month for our seniors of $25. The Republican bill that
passed starts out at $35 a month, but it does not have a cap so we
really do not know what that monthly premium is going to be.
The Democratic plan is a defined benefit plan. You know exactly what
it costs, and you know exactly what you get from it. The Republican
plan is what we call a defined contribution plan. You only get so much,
and then you do not know how much more you are going to have to pay. It
is very unpredictable.
In the Democratic plan, which we were not allowed to offer, and
imagine, a measure that affects over 40 million Americans and we were
not even allowed to offer our alternative. I say to the majority, what
are they afraid of? The deductible under the Democratic plan is $100
for seniors. Under the Republican plan, it is $250. Under the
Democratic plan after you have paid your $2,000, if you reach that
level which we call a catastrophic level, then you do not pay anything
after that. We pick up the costs, the people of the United States
through the premiums. Under the Republican plan, they make seniors pay
an additional $1,500 beyond the $2,000 cap that we have in our bill,
which means that it is going to cost seniors much more money under that
plan.
So you pay a higher monthly cost, and we are not really sure how high
that will go under the Republican plan. You pay a higher deductible.
You have to pay costs over $2,000, up to $3,500, and the reference that
the gentleman from Washington (Mr. McDermott) made to the fact that the
Democratic bill provided for negotiated pricing for different drugs,
the Republican plan prohibits us from negotiating the best price like
we do already for the Department of Veterans Affairs and for the
Department of Defense.
This is just a chart of some of the drugs that people buy. Norvasc,
seniors in my district are very familiar with Norvasc which is used for
high blood pressure. The general price at a drugstore is $182.99. The
Canadian price is $152.82. Through our negotiated pricing through the
Department of Veterans Affairs, we have gotten a price of $102.11. We
wanted to get the same kind of negotiated pricing in the bill that was
debated 2 weeks ago. We were not allowed to even offer the amendment.
I went up to the Committee on Rules, which met after midnight so
nobody in America could really see what was going on, and we had to
wait until 4:30 in the morning only to be denied the opportunity to
offer this best-price amendment. We were trying to get not just
Canadian prices, but even better prices on many of these drugs based on
negotiated pricing. Our amendment was not even allowed to be offered.
So the Republican plan is really a tricky plan, and you have to read
the fine print. The differences are very striking.
Let us say you live in a part of the country that has no plans. Let
us say these private insurers who do not seem to be flocking to provide
regular coverage under Medicare, if a plan does not exist in your part
of the country, under the Democratic plan there is a fall-
back government prescription drug plan that you can opt for. It
requires that in the bill so no part of America would remain uncovered.
The Republican bill does not provide that kind of fall-back where two
private drug plans might fail to emerge, and we know they probably will
fail to emerge.
I was home over the weekend talking to seniors, and one woman said, I
belong to an existing HMO in this community for prescription drugs, but
right now my coverage stops at $600. I cannot get anything beyond that.
If my drugs cost more than $600, I have to pay that. So the current
plans that exist are very, very inadequate.
I wanted to just take a moment to give, again, very specific
information about the difference between the Democratic bill that we
were not allowed to offer and the Republican bill which passed here by
one vote in the middle of the night as they twisted arms, and we could
see it happening right down that aisle.
If a senior's yearly drug costs are $1,500 for prescription drugs,
their out-of-pocket expenses under the Democratic plan would be $680.
Their out-of-pocket costs under the Republican plan would be $920,
which means that seniors whose drug costs are up to $1,500 a year would
pay $240 more a year under the Republican plan.
If a senior's yearly drug costs are $3,000 a year, their out-of-
pocket expenses under the Democratic plan would be $980, but their out-
of-pocket costs under the Republican plan would be $2,020. So the
Republican plan costs seniors $1,040 more if their drug expenses go up
to $3,000. What if their drugs cost $4,500 a year? Under the Democratic
plan, their out-of-pocket costs would be $1,280; but under the
Republican plan, their out-of-pocket costs would be $3,520. So the
Republican plan costs seniors $4,500 more if their drug costs go up to
$4,500 a year. So the sicker they get, the more it costs them under the
Republican plan.
I must say, I have a lot of seniors in my district and they do not
earn more than $8,000 under Social Security. The Republican plan is an
unaffordable plan. What if you are so sick that your drug costs are
over $12,000? Under the Democratic plan, your out-of-pocket costs would
be $2,300. Under the Republican plan, your costs would be $3,920. So
the Republican plan would cost seniors in that case $1,620 more a year.
So under the Democratic bill, as I have explained here, we tried to
provide for negotiated pricing to match the Canadian prices and even
better them in some instances. We were not allowed the opportunity to
offer our amendment, and that is a major cost-saving amendment because
it would use the power of group buying which every housewife in America
knows about. Anybody who does shopping knows if you buy 12 cans of
something, it is less expensive per unit than if you buy one. We are
trying to do the same for 40 million people across this country.
Imagine the savings involved, and the premium costs are less and
guaranteed under the Democratic plan. Under the Republican plan, they
start at $35 and raise it. The deductible is more affordable under the
Democratic plan; under the Republican plan, it is more expensive.
If I can just perhaps summarize why the Republican plan might be so
bad and why it really is a trick on our seniors, it is because
fundamentally the Republican Party has never supported Social Security
and Medicare. Back when Social Security was first created by this
Congress long before I was born, and we go back to the Committee on
Ways and Means votes, there were no Republican votes to create Social
Security back in the 1930s when you go into the record of what happened
back in that Committee on Ways and Means room.
When it got to the floor, enough people were embarrassed that they
voted for it. Some did, not all. But back in committee where the real
decisions are made, there was not a single Republican vote in the
committee for Social Security.
On Medicare, when President Johnson fought for the creation of
Medicare, and I was a young girl then, Senator Bob Dole said in 1995,
``I was there fighting the fight, voting against Medicare in 1965
because we knew it would not work.''
Well, for several generations of senior citizens, indeed, it has
worked. It has helped keep American families from going to the poor
house and going bankrupt; and it has given American seniors a level of
security they never
[[Page H6453]]
knew before in American history. To me, Social Security and Medicare
are the aorta of the Democratic Party of which I am proud to be a
member.
I look at some of the other quotes that have come from contemporary
Republicans. One of the Members from the other body in charge of
Republican policy said back in May as this debate got underway,
``Congress should gradually end the traditional Medicare program as an
option for new beneficiaries in the future, leaving them to choose from
a variety of private plans. I believe the standard benefit, the
traditional Medicare program has to be phased out.'' This was in The
New York Times, May 21, 2003.
In this body, the chairman of the Committee on Ways and Means, the
gentleman from California (Mr. Thomas), according to MSNBC stated, ``To
those who would say that our bill would end Medicare as we know it, our
answer is we certainly hope so. Old-fashioned Medicare isn't very
good.'' He said that June 25, 2003.
I would just like to say to the gentleman from California and to the
gentleman from the other body, for our family and for 114,000 Ohioans
in my district and for over 1.5 million Ohioans around our Buckeye
State, we believe Medicare should be here to stay. We are here to
strengthen it, not to weaken it; and we do not want to trick our
seniors. We want to provide them with a guaranteed, affordable benefit
that is voluntary if they wish to participate in something that is
available to all.
It is a great pleasure to be here this evening to put on the record
the truth and the actual costs of both plans and to say to the
gentleman from New Jersey (Mr. Pallone) thank you so very much for
allowing me to join you this evening and to say I was somewhat offended
this week when we came back here and our colleagues yesterday passed a
measure in this House to give Members of Congress better prescription
drug coverage than we are willing to give every single senior citizen
that is out there.
{time} 2230
Members of Congress make over $150,000 a year. Some do not accept all
of that. A lot of people donate some of that to charitable causes. But
what is interesting is that the Republican majority in this House snuck
through a bill here yesterday that would actually ask senior citizens
to pay 100 percent of their drug costs, between $2,000 and $3,500 a
year, but yet they did not apply that same measure to themselves the
other night. They are going to take that cost away from themselves. It
is really a tragedy. Why should Members of Congress exempt themselves
from the same regimen that they are asking of senior citizens across
this country who do not earn anything like $150,000 a year? It is
simply wrong.
I thank the gentleman from New Jersey (Mr. Pallone) for allowing me
to participate with him this evening and for his continuing leadership
on this really critical, I call it aorta, issue for our country and our
party.
Mr. PALLONE. Mr. Speaker, I thank the gentlewoman from Ohio. I know
the hour is late, but I just would like to comment on a few facts that
she mentioned because I think they are so important and also relate to
what our colleague from Washington said a little earlier.
First of all, yesterday when the Republicans, I guess it was the
Republicans who represent a lot of Federal workers, the gentleman from
Virginia and a couple of others that represent these districts where
there are a lot of Federal workers, and I suspect what happened is that
they went home during the break and probably got a lot of complaints
from the Federal workers in their district that they did not want to
leave the Federal program that they had as retirees, which has a very
generous prescription drug benefit, and be transferred into this
Medicare program that the Republicans are now offering in the House and
the Senate. So the first thing they did, as the gentlewoman said, when
they came back on Tuesday was to bring up this bill that said that
there was no way that any Federal employee, including Members of
Congress, of course, would be forced into this new Medicare program;
that they would be allowed to keep their generous benefits that they
have now.
I cannot argue with that. I certainly do not want any Federal
employee, because I have some as well, to lose the benefits that they
have under the Federal employee plan in order to join what the
gentlewoman and I both know is this lousy Medicare program that the
Republicans are putting forth, but it is such hypocrisy. Not only in
voting for that are Members of Congress protecting themselves, but the
Republicans are essentially admitting if they have a significant number
of Federal workers that the proposal they put forward for Medicare
prescription drugs is a lousy plan, and they want to make sure that the
Federal workers do not have to join it.
I can understand that. I mean, I agree. But why do they not admit as
Republicans that the reason they are proposing this bill is because the
plan they proposed for all the other seniors stinks essentially? We
tried to get them to admit that, and of course they would not. They
just, oh, no. That is a good program. We are proposing a good program
for all the other seniors, but the Federal workers should not have to
join it just in case maybe it is not a good program. But I agree with
the gentlewoman, the hypocrisy of that was just unbelievable.
And I mentioned one statistic yesterday that I thought was
interesting. It said the most popular plan among Federal workers is the
Blue Cross/Blue Shield standard option. And the Congressional Research
Service estimates that drug benefits under that plan are worth about 50
percent more than the proposed Republican Medicare drug benefits. So
there we go. Why would anybody want to give up their drug plan under
Blue Cross/Blue Shield and have it worth 50 percent less?
Ms. KAPTUR. Mr. Speaker, would the gentleman yield?
Mr. PALLONE. I yield to the gentlewoman from Ohio.
Ms. KAPTUR. Mr. Speaker, for many of the plans that exist around the
country today, one of the real threats of the Republican plan is that
employers who are offering drug plans today would choose to close those
down and try to put their retired employees in this flawed plan that
the Republicans have proposed. So it is actually a disincentive for
private employers to continue offering the kind of coverage that they
have traditionally. And there are many, many retirees who receive
prescription drug coverage through their employer, but this plan really
provides a way for them to cash out those better plans into a lesser
plan, and we have already seen with the Federal employees that they
were very worried about that. So Members of Congress very craftily made
sure that they were covered, but they left seniors in America behind.
They took care of a few thousand people, including themselves, but then
they left 40 million Americans behind in the bill that has come out of
this House.
Very interesting. That is not really what we are elected to do. We
are supposed to be here to represent the 280 million Americans who sent
us here, not to feather-bed here first and take care of our own first
and ignore everybody else that is out there. But that is literally what
happened here this week.
And for the Federal employees we should have a plan for all seniors
that are as good as what they get, not the reverse.
Mr. PALLONE. Mr. Speaker, if I could comment on two things that the
gentlewoman mentioned. Yesterday when we had the debate on the bill
that would protect Members of Congress and Federal employees, the
gentleman from Ohio (Mr. Strickland), one of the gentlewoman's
colleagues, got up and pointed out that when the Senate passed their
drug prescription drug bill before the break, they actually put in an
amendment at the initiative, I think, of some Members that said that in
no circumstances could Members of Congress get a more generous benefit
than the rest of the seniors. And there was a quote in an article that
the gentleman from Ohio (Mr. Strickland) brought on the floor where one
of the Republican Members was saying that he did not have to worry,
that he voted for that amendment because had he a guarantee that that
amendment would never survive the conference, and that whatever bill
came out of conference that we would finally vote on and go to the
President, if there is such a bill, would not have that provision in
it. So it was just amazing.
[[Page H6454]]
The other thing the gentlewoman said, too, is that during the break,
and I brought it with me, but I am not going to look for it now, there
was an article on the front page of The New York Times that said that
with regard to the major employers, the major companies that have
negotiated through unions or whatever or maybe just on their own, have
given generous prescription drug benefits to their retirees are
actually now lobbying Congress in this conference committee when it
starts to make sure that those provisions are still in there, because
that is exactly what they want to do. A lot of the major corporations
want to be able to drop the benefits for their retirees because they
say it costs them too much and push them into the Republican Medicare
prescription drug plan, which will not provide them with any real
benefit. So they are actually lobbying now in the next few weeks to
make sure that that provision is preserved so that they can drop the
benefits and say, we do not need to provide our retirees with benefits
because they are going to be under this new Republican Medicare
prescription drug program.
Two other things that the gentlewoman mentioned that I thought were
so important. She talked about how in the Republican bill that passed
here in the House they have this noninterference clause which the
gentlewoman was trying to get an amendment to take out, and of course
it was denied by the Republicans on the Committee on Rules; that the
language specifically says that the Secretary of Health and Human
Services, the Medicare Administrator, cannot negotiate price
reductions, which, as the gentlewoman points out, would save so much.
The reason that I think that is so significant, first of all, there
is no question that if we were able to do that, we would probably have
30 or 40 percent reduction in prices from what we have now. I mean,
everything I have ever seen shows that. So we say, why are the
Republicans not doing this? The gentlewoman kind of hinted at it when
she said they are doing the bidding of the drug companies, and the drug
companies give them all this money, and so naturally they do not want
to put it in.
What the Republicans keep saying is that the reason why they are
providing a bill that does not have as generous the benefits as what
our Democratic substitute had was because they have to fit within this
$400 billion budget. If they come up with this money, they say, we have
to fit this bill into this $400 billion over a 10-year budget, this pot
of money that we have; so we cannot do what the Democrats want because
that would cost a lot more, maybe twice as much, to provide a
meaningful benefit. But as the gentlewoman pointed out, if we were
actually able to get rid of that noninterference clause and have the
Secretary negotiate price reductions like they do with the Veterans
Administration or with the Department of Defense and the military, we
would bring the cost down so much that, in my opinion, the Democratic
bill would not even cost any more because we would be saving the money
by negotiating the price. But the reason they will not do that is
because they are in the pockets of the drug companies, and the drug
companies are never going to go for anything like that.
The other thing I wanted to say, too, is that we operate, and it is a
little bureaucratic, under this scoring system that is done by the
Congressional Budget Office that if they have a bill, they send it to
CBO, the Congressional Budget Office, and they tell them how much it is
going to cost. So the Democratic bill is like $800 billion, and the
Republican bill is like $400 billion. Again, I think if we did what the
gentlewoman wanted, which is to have the negotiated price reductions,
we would probably bring the Democratic bill down to close of what the
cost of the Republican bill is.
But beyond that I wanted to put out, because I think this is so
important, and the gentleman from Washington (Mr. McDermott) has
mentioned in the past, is that having people have access to
prescription drugs is a preventative measure, and if they can take the
prescription drugs and do not have to go to the hospital or the nursing
home or have a serious operation, ultimately the Federal Government and
the Medicare program are saved so much money that it is incredible. But
the bureaucrats and the CBO, and I do not mean to attack them because I
like them, but they do not allow us to take that into consideration.
So not only could we bring the costs down through negotiated price
reductions, but I think personally that if we were able to get all
these people to have access to prescription drugs who did not, the
Federal Government would save billions in not having to have
operations, not having people institutionalized, hospitals, nursing
homes. All that is paid for by the Federal Government.
Ms. KAPTUR. Mr. Speaker, would the gentleman yield?
Mr. PALLONE. I yield to the gentlewoman from Ohio.
Ms. KAPTUR. Mr. Speaker, the gentleman raised such good points on
that, and I would just show another drug that some seniors buy is
Prozac, which is used for depression. The U.S. retail price on that is
about $302.97. It is a very expensive drug. In our country today with
the Veterans Department and the DOD, Department of Defense,
negotiating, we can get that down to $186.98. And so we can look at the
drug saving.
Here is another one, Prilosec, which is used for heartburn, which
sells at about $134.99. With negotiation by the Department of Veterans
Affairs and the Department of Defense, we have gotten that down to
$63.32. Some of these prices are half. So when we look at what we are
paying in the private sector, let us say, where they do not have
negotiated pricing, if we apply that to what would be spent under the
Medicare Part D that the Democrats have proposed, we would save
literally billions and billions of dollars.
And I wanted to say to the gentleman that I intend to place in the
record tonight the names of these pharmaceutical companies and how much
money they contributed to political campaigns back in 2002 so that
people who are listening can take it right from the Congressional
Record tonight. The source is the Center for Responsive Politics. And
we will also place in the Record which political parties they gave
money to. And one can go down the list, and, without question, the vast
majority of money from the pharmaceutical giants that the gentleman
from Washington (Mr. McDermott) talked about this evening who make 50
percent of the profits of the Fortune 500, that is incredible. Was it
Will Rogers who said we are getting the Government they are paying for?
And they have paid for plenty here, and they are weighing in heavily.
Frankly, I have seen some of our colleagues defeated around the country
because of the ads, the hundreds of thousands of dollars of ads that
they put on the air. And that is why we cannot get a really good
prescription drug bill out of this Congress because they got what they
paid for, and they protected themselves from negotiated pricing in this
bill.
Who would imagine that a bill on prescription drugs would prohibit
the Government of the United States from trying to get the best price
through group buying?
Mr. PALLONE. Mr. Speaker, the amazing thing about it, too, is that if
we listen to what the Republican leadership says and what the President
says, the reason they say they want to privatize Medicare and privatize
access to prescription drugs is because they want to create
competition, and I throw back to them and say why in the world if they
believe in competition would they want to deny the Secretary the
ability to negotiate for all these seniors lower prices? Is that not a
form of competition? Is that not my saying, look, I have got the
ability here to influence the price because I am going to go out and I
am going to say if they give it to me for less price, I am going to buy
it from them, or if they give it to me for an even lesser price, I am
going to buy it from them? And I have got all these seniors, and
whoever wants to give me the best price, that is whom I am going to buy
it from. Is that not competition?
It seems to me that their ideology on this one is almost like
Socialist or something because they are saying, we do not want
competition, we do not want the Secretary to be able to go out and get
these companies to compete.
[[Page H6455]]
{time} 2245
I do not understand it. It is driven by, as you say, the fact they
are getting all these campaign contributions from the drug companies.
It is not really an ideological argument anymore, because they are
denying competition.
Ms. KAPTUR. Right. If you look at the rest of the world, a country
like Canada negotiates price. Even parts of our government, the
Department of Veterans Affairs gets a much better price than other
seniors pay simply because they do group buying and do negotiated
pricing with these companies. With the kinds of billions and billions
of dollars of profit they have, there is a little cushion there for our
senior citizens.
I just want to thank the gentleman very much for standing up for the
Democratic bill that should have been allowed to be offered here on
this floor and was not. It is a sad day for our seniors.
2002 Pharmaceutical Contributions, By Party
Pharmaceutical Research and Manufacturers of America:
$3,180,552; Democrats 5%; Republicans 95%.
Pfizer Inc.: $1,804,522; Democrats 20%; Republicans 80%.
Bristol-Myers Squibb: $1,590,813; Democrats 16%;
Republicans 83%.
Eli Lilly & Co.: $1,581,531; Democrats 25%; Republicans
75%.
Pharmacia Corp.: $1,480,241; Democrats 22%; Republicans
78%.
GlaxoSmithKline: $1,301,438; Democrats 22%; Republicans
78%.
Wyeth: $1,188,919; Democrats 17%; Republicans 83%.
Johnson & Johnson: $1,075,371; Democrats 39%; Republicans
61%.
Schering-Plough Corp.: $1,057,978; Democrats 21%;
Republicans 79%.
Aventis: $954,349; Democrats 22%; Republicans 78%.
Mr. PALLONE. I know we get so enthusiastic about this, that we forget
about the time.
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