[Congressional Record Volume 149, Number 170 (Friday, November 21, 2003)]
[Senate]
[Pages S15373-S15376]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
MEDICARE PRESCRIPTION BENEFITS
Mr. BAUCUS. Mr. President, I would like to speak a few minutes about
the upcoming Medicare conference report that will be before this body--
I don't know when--maybe Sunday, Monday, Tuesday. Before I do so, I
would like to thank and compliment many people who helped bring this
legislation to this point. For many years, many of us in Congress have
urged the passage of prescription drug benefits legislation for
seniors. We have been close to passage many times in the last several
years.
I remember last year, for example, about this time when Congress was
close to adjournment. I called a meeting together in my office for one
last chance--Senator Kennedy, Senator Snowe, myself, Senator Hatch, and
other Senators who were vitally concerned about passing prescription
drug legislation. We worked mightily. We worked very hard. At the very
end, the talks collapsed. It didn't work, largely for political,
partisan reasons, I might add, and we were not able to get a bill
passed.
Here we are again. We are at the brink. We are on the verge. We are
very close to getting prescription drug legislation passed. This time I
very much hope that all of us--as Senators and House Members--put
partisan differences aside and suspend judgment. That is, we should
look at the legislation, look at the facts, and not listen to the
rhetoric from various groups, to see what really makes sense.
There are a number of people I wish to thank at this time--the
chairman of the committee, Senator Chuck Grassley, who has worked very
hard; Senator Breaux, also a member of the committee; Senator Olympia
Snowe, a member of the committee.
In addition, Congressman Bill Thomas, chairman of the Ways and Means
Committee, has worked extremely diligently. The Speaker of the House,
the majority leader of the House, Tom DeLay; the majority leader of the
Senate, Bill Frist--there are many people who have worked very hard. I
thank them very much for their efforts and for their work.
One person I also wish to thank is Senator Ted Kennedy. Senator
Kennedy worked very hard to help us pass prescription drug legislation
in the Senate not too many weeks ago. He worked very hard. He worked
with me. He worked with the minority leader. He worked with the
majority leader. He worked with various Members of the Senate who were
critical to passage of the bill.
I thank Senator Kennedy for his yeoman's work to help pass
prescription drug benefits legislation in the Senate. He also worked
very hard to help get a conference report put together. He spent a good
deal of time with the conferees, with myself, with the Senator from
South Dakota, Mr. Daschle, the Senator from Tennessee, Mr. Frist, and
many other people trying to help get prescription drug legislation
passed. I regret at this point that he and I have a different view of
this bill. He believes there are certain flaws in this bill. I think
this is a good bill and should be passed. Nevertheless, Senators should
know that Senator Ted Kennedy has done a great job in helping move this
legislation to the point it is today. Without his efforts, this bill
would be flawed in many areas. He helped make this, in my judgment,
quite a good bill.
Why should we pass prescription drug benefits legislation? I suppose
the main reason is that times have changed so dramatically. In 1965,
when Medicare was enacted--and it was enacted by a large vote margin--
prescription drugs were not necessary. Most senior citizens were more
concerned with doctors, office calls, and hospital visits for their
medical concerns, rather than prescription drugs.
Look what has happened in the last 38 years since the Medicare Act
passed. Prescription drugs and generic drugs are so vitally important
today. They replace procedures. They help prevent the onset of disease.
Often times, the medications people take tend to prevent, forestall,
and delay all kinds of maladies. They are really important, much more
important today and getting more important every day.
In addition, prescription drugs are becoming more expensive--much
more expensive--and it is putting seniors in a bind. Many low-income
seniors are in a real bind.
I worked at a pharmacy during one of my work days at home. I have
worked at many different jobs in Montana. I show up at 8 o'clock in the
morning with a sack lunch. I have worked in sawmills, I have waited
tables. One day I was working in a pharmacy in Montana. I saw senior
citizens walk up to the pharmacist in a quiet voice and ask how perhaps
they could change their
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medication or what prescription should they cut back on because they
couldn't afford to pay for them all.
Seniors couldn't afford to pay it. It was stunning, and it was sad.
It was a revelation to me. You hear about it, but when you see it, it
has a real effect. It happens. Many low-income seniors are having a
very difficult time trying to make ends meet. Sometimes it is a
tradeoff between buying prescription drugs, buying food, and paying the
rent. It happens way too frequently, and it is just not right for our
country, the United States of America, to let this happen.
This legislation does a good job in remedying this situation. First
of all, it is $400 billion of prescription drug benefits for seniors
spread out over 10 years--$400 billion. That is a lot of money, but we
have a lot of seniors who have great needs.
Under this legislation, seniors will find they will not have to pay
all the cost of the drug but, rather, 25 percent, and the rest will be
picked up by Medicare, the Federal Government, through the mechanism
that is designed in this bill. They will only pay a quarter. But if you
are a low-income senior, you are in a much better position under this
legislation.
One-third of United States seniors are classified as low-income. A
full one-third are low-income. Under this bill, low-income citizens
will find that 90 percent of their benefits are covered--90 percent.
That means low-income people can get the prescription drugs they need
and will not have to walk up to that pharmacist and, in a hushed, quiet
tone, ask what tradeoff, what drugs that person should cut back on
because he or she cannot afford them.
If you are a low-income senior--and one-third of Americans are low-
income. In my State, that is about 46,000 seniors who will be affected;
there are about 46,000 seniors in the State of Montana who are low-
income, out of about 140,000 seniors statewide. The general rule for
all seniors is 75 percent of your prescription drug costs; if you are
low-income, 90 percent of your prescription drugs will be paid for.
This is good legislation. We are here at a time when people in our
country are asking us, Should we help our seniors or should we not?
Let me mention a couple additional reasons why I support this bill.
First of all, it helps rural America. Mr. President, there is an
extra $25 billion in this bill for rural health care. The $400 billion
I mentioned earlier all goes to benefits for seniors, either directly
or indirectly. But $25 billion extra goes for providers and $25 billion
is for rural America.
Why is that so important? It is so important because of the cost and
the strain of the practice of medicine in rural America. We run the
risk of not having good, adequate health care in rural parts of our
country. We have all talked to many doctors and nurses who practice in
rural parts of our country. They talk about the hours. They want to
serve their patients. Believe me, they want to serve their patients,
but after a while there comes a time when they are just worn out.
In rural parts of America, there are often pathologists--or
pulmonologists or other specialists--who have to be on call all the
time or on call every second or third day. Why? Because there are fewer
of them in rural America than in urban America. The costs, believe it
or not, are also very high in rural America--in many cases higher than
in cities. There are the transportation costs, the cost of distances,
the travel costs, for patients, doctors, and suppliers.
Our State of Montana is a low-income State, unfortunately. Our per
capita income in Montana is low, but we are in the middle of all the
States when it comes to cost of living. We are about the bottom when it
comes to family income, but we are in the middle when it comes to
costs. It is because we are a rural State, and this is true for rural
parts of all States.
This bill finally helps address the unlevel playing field that has
existed between urban and rural America. Now rural America, finally
after many years, gets its fair share.
When I first came to the Senate years ago, I realized just how hard
it was for rural America to get a square deal, particularly in health
care. It was stunning. Every year since I have been here, I have been
working to try to get rural America a square deal compared with urban
America. I was part of an organization--and I still am--called the
Rural Medicare Caucus. In fact, I chaired it for a few years. Every
year I am here, I have--as I know my good friend from Montana, the
Presiding Officer has--worked to help to make sure that rural parts of
the country are getting a fair deal. This is not rhetoric. This is
real. After all of these years, finally rural America gets a fair deal.
I also support this legislation and strongly advocate for its passage
because it makes sure that senior citizens, wherever they live in our
country, get a universal Medicare prescription drug benefit. Now, this
certainly is true in the first years after this legislation is
effective, but it is also true in the future. It is also true when
preferred provider organization plans are designed to come into effect.
It is also true in the year 2010 when in six regions of the country,
there may be demonstration projects selected to test a new system
called premium support.
In all respects, all seniors in all parts of the country, in all
years, will have access to the same prescription drug benefit as any
other senior, in any other part of the country, in any other year. This
bill does not undermine traditional Medicare fee-for-service. The drug
benefit is universal and nationwide in all respects. The bill does not
undermine traditional Medicare--that is, Part A and B--during the years
in which it is in effect. In a few moments I will return to this and
will explain in greater detail.
This bill also very much helps address an issue that is on the minds
of a lot of Senators--retiree coverage. When the bill was debated in
the Senate, the prediction was that companies, States, municipalities,
and nonprofit organizations might drop their retiree coverage because
the bill, when passed, would provide government drug benefits to
seniors. The thinking was why should companies not just go ahead and
drop their retiree coverage.
Well, when the Senate took up this legislation, the CBO, which is the
organization we rely upon for estimates, said that the drop rate might
be about 37 percent. Since then, they have revised their numbers and
they have come up with other figures. In short, if one compares apples
with apples, the conference report that will soon be before this body
results in a retiree droppage rate that is about 50 percent less than
the bill that passed this body by a vote of 76 to 21. Maybe it is 45
percent. Stop and think about that for a moment.
For Senators who voted for the Senate bill, they can be comforted and
relieved that retiree droppage rate is estimated by CBO to be about
half of what it was in the Senate bill.
Let's focus a little bit on the retiree provisions. Essentially,
companies receive about $88 billion under this bill for their retiree
benefits. The net effect is that it will discourage companies from
dropping--not encourage droppage. We all are very concerned that
companies across America are beginning to cut back, and have cut back,
on the number of retirees who have health care benefits or on the
nature of the benefits. It is happening in America. It is happening in
America as the world becomes even more competitive with global
competition and as companies strive to cut down on their costs to
increase their profit margins. One of the ways they can do so is cut
back on employee and retiree benefits. This is happening. We know it is
happening.
This legislation tends to discourage companies from cutting back. It
tends to help companies keep coverage. It discourages dropping retiree
coverage--it does not accelerate it. Again, it is because of the
additional dollars that are going to companies. The companies still get
the tax deduction for their health benefit plans. That is unchanged. In
addition, under this legislation, the payments to the companies for
retiree coverage are tax free. One could even say perhaps there is a
little double-dipping because the assistance is tax free. This is a
tremendous additional financial benefit to companies, to nonprofits, to
cities, and other plans to encourage them to keep their coverage. It is
a bonus. It is an incentive. This is another reason passage of this
legislation is important--because it helps companies keep their retiree
health plans. As a result, employers
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will tend less to drop retiree coverage. They will probably tend to
maintain and increase it.
There is also a myth about this bill that is there is a coverage gap
on prescription drug coverage that will leave seniors out in the cold.
Well, the truth about this so-called donut hole gap is the majority of
seniors will never reach the spending level where they would not have
coverage. Even more important, seniors who are low-income get full
coverage in the benefit gap.
Of course, we wish we had more money to give a complete benefit to
everyone without any donut hole, but we do not have an infinite number
of dollars. We only have $400 billion. It sounds like a lot, and it is
a lot, but if we are going to give a universal drug benefit to seniors
that is honest, that makes sense, that does something, not over the top
but that makes sense for all seniors, it would cost a lot more than
$400 billion. We have limited ourselves to $400 billion, and at $400
billion there are going to be some people who will not get quite the
same benefit as other people, but they will all get the benefit.
I might add that if we looked at each State, the number of seniors
who have coverage for prescription drugs varies. In some States it is
very high. In some States it is low. Compare that with the passage of
this bill, every State gets about 96.6 percent. That is virtually 100-
percent coverage. That is a big improvement.
Let's take the State of Delaware, for example. I know the Senators
from Delaware know their State a lot better than I. Today, about 27
percent of seniors in Delaware have no drug coverage. Only 3.4 percent
will be without coverage once this bill is enacted. Let me restate this
positively; 27 percent of seniors in Delaware today do not have drug
coverage. When this bill passes, virtually every Delawarean will have
drug coverage.
The same is true of the State of California. Now about 21 percent of
California's seniors and disabled live without prescription drug
benefits. This bill will reduce this number to 5 percent. Again, most
seniors, in California and in every other State, would benefit as a
consequence of this legislation.
I would like to address some concerns others have raised regarding
this bill. The concerns are that this legislation undermines
traditional fee-for-service Medicare--that this is the beginning of
undermining Medicare, the camel's nose under the tent. This is the
charge.
What are the facts? The bottom line: Fee-for-service Medicare,
traditional fee-for-service Medicare as we know it today, is held
harmless under this bill. This is the bottom line. So if you are a
senior in the United States of America you can decide that you want to
keep traditional Medicare and that you do not want to join a private
plan--any of the plans that may or may not exist in the future. That
is, it is voluntary. A senior can either join or not join. It depends
on what he or she wants to do. It is an honest choice because fee-for-
service traditional Medicare remain what it is today. It is held
harmless. That is, the deductible doesn't change, the copay doesn't
change, the benefits don't change. What exists today is what exists
under this legislation. I hope Senators listen to that. I hope staffs
of Senators listen to that. I hope the others who are listening, who
are concerned about the bill, listen to that.
Let me explain this in greater detail. The bill finally provides a
prescription drug benefit for senior citizens. We have had this
opportunity many times in the past. We now have the chance to seize
this opportunity. The bill also makes some changes in the general
Medicare structure in terms of setting up some health care plans in the
future, assuming the plans actually take shape, form, and come into
existence. They don't exist today. I am referring to regional PPOs;
that is, regional preferred provider organizations. They don't exist
today. There are other managed care companies called HMOs in many
cities. They exist in the cities primarily because they can cherry-pick
counties. They can pick the counties in which they want to provide
service, and if they do not want to pick one county because it is less
profitable, they do not have to. If they want to serve another county
because it is more profitable for them, they do. This is the way HMOs
operate today. This is the system today.
This legislation says, beginning in the year 2006, our country will
be divided up into various regions. Insurance companies will be allowed
to offer Medicare services, including drugs, in any of the regions. The
question remains, What about traditional fee-for-service? What happens
to traditional fee-for-service in an area where a company sets up a
plan? What if one wants to remain in traditional Medicare? The answer
is, fee-for-service is held harmless. There is no change in fee-for-
service.
If regional PPOs serve a region, it has to serve the entire region.
It can't choose this part of this State and that part of that State. It
has to serve the entire region--people in the cities, people in the
rural parts of that region. Everybody has to get the same deal.
The senior living in one of these regions has a choice. The senior
can stay in traditional fee-for-service Medicare or can join the plan.
But fee-for-service Medicare is held harmless. There is no change to
traditional Medicare.
Obviously, this does not undermine traditional Medicare as we know
it. This bill builds up and strengthens Medicare. There are additional
dollars here for hospitals, for doctors, for providers who will provide
traditional Medicare. So this bill does not in any way undermine
traditional fee for service. In fact, Medicare is held harmless under
this legislation.
Some people say: That's OK, Max, we understand that, but what we are
really concerned about is the so-called premium support demonstration
areas. Their argument is, in those areas, traditional fee-for-service
is undermined. Private plans will pull away seniors, and it will be
unfair to seniors who remain in Medicare. It is the beginning of the
demise of traditional fee-for-service Medicare, they argue.
That is not true. It is nonsense. Look at the facts. Look at what is
in the legislation.
Let me just remind Senators that this legislation is now available
for Senators to look at. Thank goodness, because when they look at it,
they are going to see what is and is not included. I just ask Senators
to trust me long enough to suspend judgment on it so they can go look
at the legislation and make up their own minds. That is what the
Senators are supposed to do--make up their own minds. I am urging
Senators to suspend judgment for a little while, listen to what I am
saying, because I think when they do look at the legislation, they will
see that what I am saying is true. But you do not have to take it on my
account. Just please do not make up your minds until you read what is
actually in the legislation. You will see, even in the supposed premium
support demos, and there might be up to six cities in the country, that
fee-for-service Medicare is held harmless. There is no change in fee-
for-service in any respect, deductibles and on--except for one. That
one possible change is the Part B premium.
However, this legislation ensures that seniors who happen to live in
one of the six demonstration areas can keep the same fee-for-service
Medicare. If it happens that your Part B premium goes up as a result of
the demonstration--it may or may not go up--but if it does, the
legislation says there can be no more than a 5 percent increase on your
Part B premium. This is the only possible way a senior citizen could be
adversely affected in these demonstration projects.
Another point regarding these demonstrations. I have heard various
figures that the demos are going to affect 10 million fee-for-service
beneficiaries. We have all heard the 10 million figure. It is what some
Senators suggest.
It is not true; it is untrue.
How many seniors might possibly be affected? Let's get an unbiased,
objective opinion.
We asked the CBO, the Congressional Budget Office: Mr. CBO, what is
the answer? How many seniors may potentially be in an area where they
would be faced with a choice, stay in fee-for-service Medicare or join
one of these premium support organizations? How many could be adversely
affected? The answer is not 10 million. CBO says: We think it is
between 670,000 and 1 million. 10 million is the figure of scare
rhetoric. The actual facts are 670,000 to 1 million.
There are many other instances where there is a lot of rhetoric
floating
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around. But if you look at the facts, if you read the legislation that
is now available, you will find it is really good legislation and all
these worries and exaggerated claims about the bill are just not true.
I have a couple of additional points regarding premium support. It is
a time-limited demonstration. It exists only for 6 years, starting in
2010. It would take an act of Congress to change it, an act to expand
it. It cannot be extended or expanded by the Secretary or anybody else.
Fact No. 2, the demonstration will only affect limited areas of the
country--up to six areas of the country only.
Fact No. 3, low-income beneficiaries are totally protected in any of
these areas where premium support might occur.
Facts No. 4 and No. 5. There is no requirement for beneficiaries to
enroll in the private plans. None. There is no inducement to enroll in
any of these plans unless the plan happens to be a lot better than
traditional fee-for-service Medicare which this bill strengthens.
How does this bill undermine traditional fee-for-service Medicare?
How?
The fact is, it doesn't.
I will close by saying this is a good bill. It provides prescription
drug benefits for seniors. Seniors need and deserve this help. It
provides $400 billion of help. We are not going to have this
opportunity again. It is true that this bill is not perfect. But I
think on the whole it is a very good. This bill is much closer to the
Senate bill than it is to the House bill. It is about one-quarter away
from the Senate bill. It is about three-quarters away from the House
bill. Seventy-six Senators voted for the Senate bill. I think that the
76 Senators who voted for the Senate bill will find that in many
respects, this bill is better than the Senate bill they supported.
Additionally, when my colleagues look at the facts of this bill, they
are going to find that this is pretty good legislation. It is something
we should pass.
I hope people will look at the actual language and look at the facts
and will support this bill.
The PRESIDING OFFICER (Mr. Cornyn). The Senator from Idaho.
Mr. CRAIG. Mr. President, I will be brief. My colleague from Oregon
and I wish to mention only briefly the health bill which was passed.
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