[Congressional Record Volume 149, Number 173 (Monday, November 24, 2003)]
[Senate]
[Pages S15670-S15771]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 
                        2003--CONFERENCE REPORT

  The PRESIDENT pro tempore. Under the previous order, the Senate will 
resume consideration of the conference report to accompany H.R. 1, 
which the clerk will report.
  The assistant legislative clerk read as follows:

       Conference report to accompany H.R. 1, an act to amend 
     Title XVIII of the Social Security Act to provide for a 
     voluntary prescription drug benefit under the Medicare 
     Program and to strengthen and improve the Medicare Program, 
     and for other purposes.

  The PRESIDENT pro tempore. Under the previous order, the time until 
12:30 shall be equally divided between the chairman of the Finance 
Committee or his designee and the Democratic leader or his designee, 
with the last 10 minutes prior to the vote to be allocated between the 
Democratic leader for 5 minutes to be followed by the majority leader 
for the final 5 minutes.
  The Senator from Iowa.


                                Schedule

  Mr. GRASSLEY. Mr. President, I would like to state the plan for 
today. Under the previous order, the cloture vote will occur today at 
12:30. The debate time until that vote is limited, and Members will 
only be allocated short debate times. The cloture vote on the 
conference report will be the first vote of the day. It is the leader's 
hope and expectation that cloture will be successful. Once cloture is 
invoked, the leader hopes we will be able to proceed to a vote on the 
passage of the Medicare prescription drug bill in very short order 
after that.
  On our side, we are obviously going to start with the Senator from 
New Hampshire. But since the time is very tight, probably most Members 
would be limited to 5 minutes or less, beyond that of Senator Gregg. I 
would like to make sure people are very orderly as they come over here 
and ask me for time. I cannot speak for the Democratic side, but for 
the Republican side, it is very essential for people to be here and be 
ready to speak.
  Does the Democratic whip wish to be recognized?
  Mr. REID. Yes, if my distinguished friend will yield.
  The PRESIDENT pro tempore. The Senator from Nevada.
  Mr. REID. Mr. President, we have, on this side, a number of people 
who wish to speak. It is my understanding, to make this debate fair, 
that on this side the time will be given to those who are opposed to 
cloture being invoked. So the people who speak on this side will be 
opposed to cloture. I want all the people who have asked for time on 
this side to understand that. And we are--this is just for Democrats--
we are going to give 9 minutes to the following Senators, and in no 
necessary order. Whoever is here can speak. They should all be alerted 
that if there are quorum calls, they are going to lose time. So, Mr. 
President, I would, on our side, grant 9 minutes to Senators Akaka, 
Lautenberg, Kerry, Lieberman, Dodd, Clinton, Mikulski, Pryor, Kennedy, 
with Kennedy to have the last time before the Democratic leader speaks, 
closing the debate.
  Now, again, I want to tell those listening, this side is for those 
who oppose cloture.
  Mr. GRASSLEY. Mr. President, could I make an inquiry?
  Mr. REID. Yes. And I think it would be better if we alternated back 
and forth until 12:30.
  Mr. GRASSLEY. That is the point I wanted to make.
  Mr. FRIST. Mr. President, today we stand on the threshold of a truly 
historic moment. Not for Republicans. Not for Democrats. Or for the 
House of Representatives. Or the United States Senate. But, for over 40 
million American seniors and individuals with disabilities, who may 
finally be getting prescription drug coverage under Medicare.
  Saturday morning, the House of Representatives passed H.R. 1, the 
``Medicare Prescription Drug, Improvement, and Modernization Act of 
2003.''
  Also Saturday, President Bush called upon the Senate, once again, to 
finish the job. He urged us to send him legislation that will provide 
badly needed prescription drugs to seniors.
  For years, Congress has debated whether, and how, to provide 
prescription drug coverage to seniors and to strengthen and improve the 
Medicare program. Now, it is time for us to Act.
  Mr. President, this generation of seniors survived the depression, 
fought World War II, and helped make the United States into a 
prosperous and thriving Nation. Time and again, they stepped forward to 
serve. Now, is the time to fulfill our duty to that great generation. 
Now is the time to answer their call.
  What President Lyndon Johnson said in 1965 still stands:

     . . . No longer will this Nation refuse the hand of justice 
     to those who have given a lifetime of service and wisdom and 
     labor to the progress of this . . . country.

  Let us not stay that hand of justice now. Let us not turn our back on 
America's seniors and individuals with disabilities.
  There are nearly one quarter of a million seniors in my home State of 
Tennessee who have no prescription drug coverage. There are millions 
more across the Nation for whom this legislation, literally, means the 
difference between life and death. They cannot afford to wait any 
longer. I have treated thousands of Medicare patients. And I know 
firsthand that, without Medicare, millions of seniors would not have 
received needed medical services. Millions more would have faced 
financial ruin. Medicare has helped save and heal lives.
  But this cherished program has failed to keep pace with medical and 
scientific progress. Prescription drugs are an integral part of modern 
medicine. They are as important as the surgeon's knife. Yet, they are 
not part of the Medicare program.
  In the nearly four decades since the Medicare program was created, 
the American medical system has transformed from one focused on 
treating episodic illness in hospitals to one characterized by an 
increasing emphasis on managing and preventing chronic disease in 
outpatient settings with advanced medical technologies and prescription 
drugs. Life expectancy has increased by nearly ten years. Death rates 
associated with heart disease have been cut in half, and new treatments 
and diagnostic tools have improved survival rates for prostate, colon, 
and breast cancer. Our medical and scientific knowledge and, along with 
it, our ability to treat illness and disease has improved dramatically 
over the past four decades. Yet, Medicare itself has not kept pace with 
these dramatic changes. It has been too inflexible and bureaucratic. 
Designed for the 1960s health care system, it has been unable to adapt 
to changing medical practice. Medicare does not provide true preventive 
coverage, disease management, or protection against catastrophic health 
care costs.
  As a result, we have today glaring and unacceptable gaps in the 
coverage that is available to seniors and individuals with 
disabilities--the most obvious of which is the lack of prescription 
drug coverage.
  Over the past three decades, for example, the death rate from 
atherosclerosis has declined by over 70 percent and deaths from 
ischemic heart disease have declined more than 6 percent, largely due 
to the advent of beta blockers and ACE inhibitors. During the same 
period, death rates from emphysema have dropped nearly 60 percent due 
to new treatments involving anti-inflammatory medications and 
bronchodilators.

[[Page S15671]]

  Today, over 600 medicines are under development to treat or prevent 
diabetes, cancer, heart disease, stroke, neurological diseases, and 
other debilitating illness. Nearly 400 drugs have been produced during 
the past decade alone.
  But, under today's Medicare, these drugs simply are not available to 
seniors.
  We must act to ensure that this generation of seniors, and the next, 
has access to the healing miracles of modern medicine. And we must act 
to provide our seniors, and the next generation of seniors, with true 
health care security: quality preventive care, affordable prescription 
drugs, protection from catastrophic health care costs, better 
coordinated care, disease management, and access to modern technology.
  As voluntary prescription drug coverage the bipartisan bill we are 
debating today takes a major step in that direction. It devotes $400 
billion over the next decade to adding a new, voluntary prescription 
drug benefit to the Medicare program. And it takes concrete steps to 
speed less expensive generic drugs to the market to help make 
prescription drugs more affordable for all Americans.
  Within months after this legislation is signed into law, seniors will 
be able to get a voluntary Medicare-approved prescription drug discount 
card that will reduce the costs of their drugs by an estimated 10-25 
percent. Lower income seniors will get an additional subsidy of $600 on 
top of these discounts to help them purchase needed medicines. Thus, 
seniors will get immediate relief even before the comprehensive drug 
benefit is fully implemented, with additional help for those who need 
it the most.
  Beginning in 2006, seniors will have access to the new drug benefit. 
Those who wish to add the new prescription drug benefit to their 
traditional Medicare coverage will have that choice. The new drug 
benefit is completely voluntary and available to all seniors. 
Appropriately, it provides the most generous help to lower income 
seniors and those with catastrophic drug costs.


            substantial assistance for lower income seniors

  Seniors with incomes below 135 percent of the Federal poverty line 
($11,648 for individuals and $14,965 for couples) will pay no premiums, 
no deductibles, and only a modest co-payment for their comprehensive 
coverage. Beneficiaries with incomes below 150 percent of poverty 
($12,942 for individuals and $16,327 for couples) will pay only a 
portion of the premium and a $50 deductible. After that, the government 
will subsidize 85 percent of their drug costs.
  In my home State, over 430,000 low income Medicare beneficiaries--
nearly half of all beneficiaries in Tennessee--will have exceptional 
prescription drug coverage under this bipartisan plan. One quarter of a 
million Tennessee seniors who today have no prescription drug coverage 
at all will gain access under this proposal, along with millions more 
across the Nation.


                  improvements to traditional medicare

  The legislation also strengthens and improves the traditional 
Medicare Fee for Service program. It adds new preventive coverage for 
diabetes and cardiovascular disease. For the first time, Medicare will 
cover initial preventive physical examinations. And this agreement 
responds to the six percent of seniors with chronic disease who account 
for about 50 percent of all Medicare spending. The legislation will 
launch a series of major pilot programs on disease management and 
quality payment incentives that could result in dramatic improvements 
in the care of the most ill and the most needy. This will help us 
better target health care resources to those who require it most.
  The legislation also puts in place national standards for electronic 
prescribing, along with incentives for doctors to fill prescriptions 
electronically. These reforms should dramatically improve medication 
therapy management, reduce medical errors, and improve patient safety.
  As the Senator from Montana, the Ranking Member of the Senate Finance 
Committee, has said so eloquently during these past several days, this 
bill does nothing to destroy the existing Medicare program. In fact, it 
immensely strenghtnes the traditional Medicare program.
  As my colleagues know, this legislation has received broad support 
from well over 350 organizations, including from the AARP--which 
represents 35 million seniors. In its letter of endorsement last week, 
the AARP also makes clear that, at a result of this legislation, 
``millions of older Americans and their families will be helped by this 
legislation.'' In addition, AARP writes: ``The integrity of Medicare 
will be protected.''


                        new health care choices

  Today, most seniors choose to enroll in the traditional Medicare Fee 
for Service program. But this may not be the best choice for all 
seniors, and it may not be the choice of all seniors in the future.
  There are about five million seniors who are covered by private 
health plans under the Medicare program today. Beginning immediately, 
the legislation will strengthen Medicare's local HMO coverage. It will 
help stabilize and improve the coverage of those five million seniors 
in the current Medicare+Choice program. As a result, Medicare+Choice 
will become a more stable, secure, and strong option for those seniors 
who have already chosen to enroll in coordinated care plans.
  This bipartisan plan also provides seniors with even more choices--
the choice to enroll in regional preferred provider organizations--or 
PPOs. The majority of Americans under age 65 get health coverage 
through PPOs. Most members of Congress, Federal employees, and Federal 
retirees also get coverage through PPOs. Employees covered by PPOs 
report high levels of satisfaction with their coverage. PPOs typically 
provide coverage for preventive care, chronic care management, disease 
management, and access to a broad range of doctors and hospitals.
  Under the bipartisan agreement, seniors will have the opportunity to 
participate in these innovative plans if they choose.
  Moreover, beginning in 2010, we will test on a limited basis whether 
these private health plans provide higher quality than traditional 
Medicare. We will also test whether Medicare private health plans are 
most cost effective than traditional Medicare. All beneficiaries will 
be protected during this test. And the demonstration cannot be expanded 
or extended unless Congress acts to do so.
  Throughout, seniors will always be able to stay in the traditional 
Medicare program. And they will have the option of adding prescription 
drug coverage. Meanwhile, tomorrow's seniors, many of whom are covered 
through PPOs now, may choose to continue private coverage when they 
retire. We are looking down the road to prepare for the baby boom 
population. We need to be ready now, not scrambling when it is too 
late.


               strengthening health care in rural america

  This bill contains the most sweeping and strong rural provisions ever 
in a Medicare bill to come before this Congress. It also makes 
improvements to payments for graduate medical education and takes 
concrete measures to protect seniors' access to physicians.
  For example, hospitals in my home State of Tennessee will receive 
$655 million under this legislation. Physicians, who otherwise would 
face real cuts next year of 4.4 percent, would instead see a 1.5 
percent payment increase in both 2004 and 2005. I am very proud that 
the American Hospital Association, the Tennessee Medical Association, 
the American Hospital Association, the Tennessee Hospital Association, 
the American Association of Medical Colleges, and the Alliance for 
Specialty Medicine strongly support this legislation. The bill has also 
received strong support from the Rural Health Care Association, the 
Rural Hospital Coalition and the Coalition for Geographic Equity in 
Medicare.


                  controlling prescription drug costs

  Some of my colleagues have said that this legislation does nothing to 
control prescription drug costs. I respectfully disagree.
  First of all, under this bill, seniors will be able to get a drug 
discount card right away. They will be able to present their Medicare 
discount card to their pharmacist and receive a 10 to 25 percent cut 
right off of the top.
  This bill also works to contain drug costs before the drugs get to 
the pharmacist's shelf. It does so in a number of ways. The bill speeds 
generic drugs to the market. It encourages competition

[[Page S15672]]

to lower prices, and it gives the Medicare recipient new power to 
comparison shop.
  Let's start with the generic drug provisions. In 1984, Congress 
passed the Hatch-Waxman law to encourage cheaper generic drugs to come 
onto the market. Under that law, generic competition has flourished. 
When the law was passed, generics drugs were less than 20 percent of 
the market. Today, generic drugs represent nearly 50 percent of the 
entire market.
   The Hatch-Waxman Act has been incredibly successful in allowing 
consumers to get low cost alternatives. But there have been some 
abuses. Therefore, we are moving to close loopholes in the system 
through this bill. And the core of the provisions build on the work of 
Senator Gregg and Senator Schumer.
   Under the new system, a new drug applicant will receive only one 30-
month stay of approval of a generic drug's application. This is a major 
change. Under the old system, drug companies could receive multiple 
stays of approval for generic rivals. Now, they will get one stay only.
   The agreement takes additional steps to get generic drugs to the 
market faster--through which patients will get safe, effective, low 
cost generic drug alternatives to brand name medicines.
   That is why this bill is supported by the Generic Pharmaceutical 
Association and the Coalition for a Competitive Pharmaceutical Market.
   the bipartisan Medicare agreement also empowers drug plans to 
negotiate discounts from drug companies. The Congressional Budget 
Office says that this approach will enable drug plans to significantly 
control drug costs for their beneficiaries.
   Moreover, the savings they negotiate will not be subject to Federal 
limits. They will be able to get the lowest prices possible, even if 
those prices are lower than those negotiated under Medicaid. The 
Congressional Budget Office has estimated that this provision alone 
will save $18 billion dollars.
   Not only will the Medicare agreement help lower prices, it will help 
give consumers more information about their medical options. This bill 
expands Federal research into the comparative effects of different 
drugs and treatments.
   With this new information, seniors will be able to comparison-shop 
in the medical marketplace, just like they would for any other product 
or service. Patients and their doctors will be able to compare 
treatment options and choose the course of action that best addresses 
their medical needs. And Medicare and health consumers will get better 
value for their money.


                        Health Savings Accounts

   I am also very pleased that this legislation will make tax-preferred 
Health Savings Accounts available to all Americans. HSAs will help 
control costs over time, and give individuals the ability to better 
control their health care dollars and health care decisions.
   I wish we could have gone even father. I wish we could have added 
provisions from the House bill that would have allowed individuals to 
roll over some funds each year from their flexible spending accounts. I 
also believe we must do more in the coming years to allow individuals 
to invest funds on a tax-free basis to meet their health care needs in 
retirement, just as we do with 401(k) plans and Individual Retirement 
Accounts. I am committed to coming back and addressing these issues in 
the years ahead.


                 Demographic and Structural Challenges

   Our first priority must be to provide seniors with health security. 
But, at the same time, we know that Medicare also faces serious 
financial and demographic pressures in the coming years. Between now 
and 2030 the number of seniors will nearly double from 40 million to 77 
million; the program's costs will more than double to nearly $450 
billion annually, even before we add prescription drug coverage or 
improve other benefits; the number of taxpayers paying into the system 
to finance health coverage for seniors will drop from 4 today, to 2.4 
by 2030; seniors, who represent 12 percent of the population today, 
will represent 22 percent of the population in 2030; and one last fact: 
each senior will be in the Medicare program longer. Life expectancy at 
age 65 will increase approximately 10 percent over the next 30 years.
   The demographic underpinning has been defined: more seniors; each 
senior living longer; and fewer workers to support each senior.
   So, while we need to act to provide prescription drug coverage to 
seniors, we also need to do so responsibly. This legislation takes an 
important first step in linking Medicare payments to quality. It also 
relies on competitive market forces to help control health care 
spending.
  Moreover, for the first time in Medicare's history, we will ask those 
seniors who can afford to pay more for their coverage, to do so. And we 
will put in place more accurate and more transparent measurements of 
Medicare's fiscal strength--as well as special procedures for 
attempting to better control Medicare spending growth in the future.
  These reforms do not go far enough for some of my colleagues. At the 
same time, they go too far for others. Overall, however, I believe this 
is a balanced, bipartisan bill that is worthy of the support of the 
United States Senate.
  It is not a perfect bill. But, it is a meaningful step in the right 
direction. It will provide substantial relief from high prescription 
drug costs for millions of seniors. It will help rectify payment 
inequities for rural health care providers. And it will begin to inject 
into the Medicare program new health care choices and much needed 
flexibility so that seniors will have the option to choose the kind of 
health care coverage that best suits their needs.
  Today, America is one step closer to being a more caring society for 
millions of seniors and individuals with disabilities struggling with 
high prescription drug costs and outdated, often inadequate medical 
care. Today, we are one step closer to providing real health security 
to seniors all across the Nation.
  As a physician, I have written thousands of prescriptions that I knew 
would go unfilled because patients could not afford them. With this 
bill, that will change. As a senator, I have watched as a decades-old 
Medicare program has operated without flexibility, and without 
comprehensive and coordinated preventive care, disease management and 
catastrophic protection against high out-of-pocket medical costs. With 
this bill, that will change also.
  This legislation is historic. By dramatically expanding opportunities 
for private sector innovation, it offers the possibility of genuine 
reform that can dramatically improve the quality of care available to 
seniors. At the same time, the legislation preserves traditional 
Medicare for those who choose it. It combines the best of the public 
and private sectors and gives today's seniors innovative health care 
options and positions Medicare to serve tomorrow's seniors as well.
  This legislation is possible because of the work and dedication of 
every Member. I would like to take a moment to thank those whose 
commitment was critical to this effort. First and foremost, Chairman 
Charles Grassley and Ranking Member Max Baucus deserve credit. As does 
Senator John Breaux who joined me six years ago on the Bipartisan 
Commission on Medicare and again on this Conference Committee. All 
Members of the Conference Committee showed a degree of dedication and 
resolve seldom seen in either Chamber, especially Senators Hatch, 
Nickles, and Kyl. But we wouldn't have reached this point without 
building on the strong foundation laid by Members over the last several 
years, especially Senators Snowe, Jeffords, Gregg, Hagel, Ensign and 
Wyden. Finally, the Senate could not have done this alone. The House 
Leadership, Speaker Hastert and Leader DeLay, deserve special 
recognition, as does the Chairman of the Conference, Chairman Bill 
Thomas, and the Chairman of the House Energy and Commerce Committee, 
Chairman Billy Tauzin.
  In closing, I would like to thank again every member of this body who 
has worked so hard on this legislation--not just in this year, but in 
the previous six years of our most recent effort to strengthen and 
improve Medicare. I urge every Senator to support this bill. I implore 
every Senator to avoid filibusters and other partisan political 
maneuvers that threaten the prescription drug coverage, and health

[[Page S15673]]

care security, our seniors need and deserve.
  I yield the floor.
  Mr. GRASSLEY. Mr. President, I yield 15 minutes to the Senator from 
New Hampshire.
  The PRESIDENT pro tempore. The Senator from New Hampshire is 
recognized for 15 minutes.
  Mr. GREGG. I thank the Senator from Iowa.
  Mr. President, I rise today to express my concerns about the proposal 
before us. I think it has to be put in the proper context. This is a 
$400 billion subsidy over the 10 years that it exists, but over the 
actuarial life of this program, it is a $7 trillion subsidy--$7 
trillion. It is not paid for.
  Now, I have heard a number of speakers come to this floor and say 
this drug benefit is paid for by the senior citizens. Well, unlike the 
past, where seniors paid into their HI accounts, their health insurance 
accounts, and paid for their Medicare, that is not the case with this 
drug benefit. This drug benefit will be paid for essentially by working 
Americans who are working at the time that the seniors who benefit from 
the drug benefit receive that benefit.
  The real concern arises when the baby boom generation, which is my 
generation, retires, because at that point we are going to have a 
massive influx of seniors into our system, and the cost that we--my 
generation--is going to put on the system is going to be dramatic.
  It is so dramatic, in fact, that any child born today in the United 
States immediately arrives with a debt of $44,000, which is what that 
child will owe during their working life in order to pay for my and my 
contemporaries'--baby boomers'--benefits under Medicare, and we are 
going to take that $44,000 debt, which a child who is born today has, 
and we are going to add, with this bill, an additional $15,000--an 
additional $15,000--on top of the $44,000. That is why I have concerns 
about this bill.
  I believe we need a drug benefit for seniors, for low-income seniors 
who cannot afford the drugs which they are presently receiving. I 
believe we need a drug benefit which addresses the problem of a senior 
who ends up, because of their drug costs, being wiped out of all their 
basic assets; a catastrophic drug benefit, in other words.
  But while we move down the road toward that type of a drug benefit, 
we have to, at the same time, reform the underlying Medicare system so 
that it is affordable, so that my children and the children of other 
Members of the baby boom generation do not end up paying so much to 
support health care for us, the retired, that their lives are 
depredated, that their quality of life is reduced.
  Under the bill before us, unfortunately, although it has an attempt 
to address the low-income issue, and although it has an attempt to 
address the catastrophic issue, there is no significant attempt to 
address the reform issue. So the practical effect of this bill is that 
it puts in place a massive new benefit without any control over the 
costs of the underlying Medicare system. And the effect of that is that 
the children of the seniors of tomorrow--basically, my children and my 
grandchildren and the children of anybody who was born after 1940--will 
end up paying a huge amount in order to support us in our retirement.
  This bill, put quite simply, is the largest intergenerational tax 
increase in the history of this country, and it should not be 
sugarcoated. It is a massive tax increase being placed on working, 
young Americans and Americans who have not yet been born in order to 
support a drug benefit for retired Americans and Americans who are 
about to retire, without any underlying reform to try to control the 
cost so that tax is not so high that it overwhelms the ability of our 
children and our children's children to live the quality of life that 
we have lived.
  It seems incredibly unfair for one generation to do this to another 
generation, for us to use our political clout because we are in office 
to benefit our generation at the expense of our children and our 
children's children. Yet that is what, essentially, this bill does. It 
attempts reform, but it does not accomplish reform. It claims to have, 
in the year 2010, some sort of competitive model, but the competitive 
model is PPOs. It says it has cost containment, but it really does not 
have cost containment at all.

  Then, in one of the true ironies of the bill, it takes people who 
already have private plans which are paid for by the private sector and 
moves those people into public plans, so we end up paying almost $100 
billion to subsidize private plans to stay private. What an outrageous 
approach. First we produce a plan that is going to cost our children $7 
trillion over the next 10 years, and then we say we are going to pay 
$100 billion to the private sector to keep in place plans which they 
already plan to keep in place. They call that ``reform.'' Very hard to 
understand.
  The way the drug benefit is structured, utilization is obviously 
going to go through the roof because there is no incentive for people 
to be conscientious purchasers; there is simply an incentive to go out 
and purchase. I suppose that is because this is some sort of drug 
initiative that makes it more likely drugs will be purchased. But to 
have no cost incentives in place to control the rate of growth of the 
drug plan through control utilization is foolish.
  There are good parts to the bill. There is the savings account, but 
that is $6 billion. There is a physician increase payment. That is $6 
billion. That is $12 billion over the 10 years. We could have afforded 
that. There is the rural initiative, $25 billion. That gets you up to 
$40 billion. That is still only one-tenth of the cost of the whole 
program. We are spending $400 billion over 10 years to do what the plan 
has valued at $40 billion of quality.
  We could have gotten where we wanted to go if we had put in place a 
reasonable plan for low-income seniors, put in place a catastrophic 
plan so seniors would not have their income wiped out, assets wiped out 
by the cost of drugs, and at the same time put in place significant 
Medicare reform so that at the end of the day our children would know 
that, yes, they were going to have to pay more for their parents' drug 
costs but their parents were going to have to be more conscientious 
purchasers of health care and the health care system that was 
delivering those drug benefits to their parents was going to be more 
efficient and of a higher quality.
  But that was not the process developed. The process developed, 
unfortunately, was developed to get us through the next election, to be 
able to say in the next election, we put in place a drug benefit at the 
expense of the children of tomorrow who will find during their working 
lives they are going to have to now pay $7 trillion of unfunded 
liability to support a program which has essentially no reform and no 
cost containment in it and, as a result, as I mentioned before, 
reflects the single largest tax increase in this country that one 
generation has put on another generation, a grossly unfair act and one 
that should embarrass us as a Congress and certainly does not fulfill 
the obligations we have as parents moving toward retirement.
  This bill may well be well intentioned. I happen to think it is 
politically driven. But in the end, the results will be the same, 
whether it is well intentioned or politically driven. We will have put 
on the books a program which is going to cause our children and our 
children's children to have a lower quality of life than we have had. 
And we, as the people taking advantage of that program, will have 
been asked to take no actions that are responsible in the area of 
containing the costs of our health care delivery system.

  As Republicans, we should be affronted by this. It goes against 
everything our party has always stood for, which is that government 
should be delivered in a responsible and efficient way--not in a way 
that simply throws money at an issue for the purposes of political 
gain. Unfortunately, we have chosen that second path in this bill and 
in the process we will be passing a tax increase that will cause our 
children and our children's children to have less of a quality of life 
than we have had.
  I yield back the remainder of my time.
  The PRESIDENT pro tempore. The Senator from Nevada.
  Mr. REID. Mr. President, I make an announcement to Democrat Senators. 
I have spoken and said this time will be set aside for those who are 
opposed to cloture, but I think that is too restrictive. We want to 
make sure there is good debate this morning. Some people

[[Page S15674]]

have not had an opportunity to speak, so our time will be for those who 
are opposed to the legislation, the bill itself. They can make up their 
mind whatever they want to do on cloture.
  I ask unanimous consent that the names I read before--Senators Akaka, 
Lautenberg, Dodd, Kerry, Lieberman, Clinton, Mikulski, Pryor, and 
Kennedy--all be allotted 9 minutes, the amount of time on the 
Democratic side that they would be entitled to, and no more. I ask 
consent that that order be entered.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  The Senator from Arkansas.
  Mr. PRYOR. Mr. President, I rise today to express my opposition to 
this bill, a Medicare prescription drug benefit in name only that has 
very few benefits for the seniors in my State. In June of this year, I 
voted for a bipartisan Senate bill which, while not perfect, was a good 
step toward providing our seniors with the prescription drug help they 
need.
  Let us be clear. This legislation does nothing to lower the cost of 
prescription drugs. The Congressional Budget Office says this 
legislation will actually cause prescription drug prices to increase by 
3.5 percent. Under this legislation, Arkansans will not be able to 
reimport cheap FDA-approved drugs from other industrialized countries, 
and this legislation expressly prohibits the Federal Government from 
negotiating with drug companies to bring down the high cost of 
prescription drugs.
  This means that our seniors will continue to pay more for their 
prescription drugs than anybody else in the world. It means they will 
continue to pay much more for their drugs than do our neighbors in 
Canada.
  This means that a woman in America suffering from breast cancer will 
continue to be charged over $90 a month to take tamoxifen, while the 
same drug, made by the same company, can be bought in Canada for $22 
for a month.
  This means that people in my State will continue to pay: 37 percent 
more for cholesterol controlling Lipitor; 50 percent more for the anti-
depressant Paxil, and 58 percent more for the arthritis drug Vioxx.
  For the last decade drug spending has been driving up the cost of 
health care and placing affordable coverage out of reach for many 
Americans. We finally got our chance to help these seniors by lowering 
the cost of prescription drugs, but this bill wastes that opportunity.
  It is bad enough our seniors are getting gouged by artificially high 
prices in the United States. I strongly believe we need to fix that. 
But now, with the passage of this bill, if indeed it passes, we are 
talking about taxpayers' dollars. Not only is it the right thing to fix 
it, it is our duty that we fix it.
  Under this legislation, thousands of Arkansans will be worse off than 
when they started. According to the CBO, 2.7 million Americans are 
expected to lose their retiree health care benefits as a result of this 
legislation. That includes 19,000 Arkansas seniors. In addition, under 
this bill, 109,100 Arkansas Medicaid beneficiaries will receive worse 
coverage than what they get now and they will face considerable new 
restrictions on the drugs they can take.
  Mr. President, 40,750 fewer seniors in Arkansas will qualify for low-
income protections against the assets test and lower qualifying income 
levels. I, for one, do not believe that rural Americans living on a 
farm should be penalized because they own a tractor or other farm 
equipment. And 11,020 Medicare beneficiaries will pay more for Part B 
premiums because of income.
  This bill also starts us down the treacherous path to dismantling 
Medicare as we know it. It takes $12 billion away from Medicare and 
gives it to private insurers and then forces Medicare to compete with 
heavily subsidized HMOs.
  This allows private insurers to cherry-pick the healthiest and 
wealthiest people to their plans while leaving the poorest and the 
sickest in Medicare to pay more in premiums. People need to know that 
this bill was written to accommodate 400 corporate lobbyists, many of 
whom work for the pharmaceutical industry. It amazes me that we would 
seek permission from the pharmaceutical lobby before we would do the 
right thing for the people we represent. It amazes me even more that 
400 lobbyists have more influence over Congress than the 40 million 
people who are currently enrolled in Medicare.
  People need to know that the pharmaceutical industry is going to be 
handed a taxpayer-subsidized windfall with the passage of this bill. 
Analysts at Goldman Sachs project the new Medicare benefit could 
increase industry revenue by 9 percent or about $13 billion a year. And 
it is no coincidence that as details of this legislation began leaking 
out, pharmaceutical stock prices have risen steadily. In the last week 
alone, the value of Pfizer's stock increased by $19 billion.
  I direct my colleagues to this bar graph behind me. The large bar 
represents Pfizer and the $19 billion they have increased in worth over 
the last week. Now look at the other bar, this little bitty bar, this 
small bar that you may have to squint and look closely to see because 
there isn't much there. This bar represents the entirety of the cost 
savings provisions related to generic drugs and reimportation. Seniors 
will save over the next 10 years $.06 billion. To reiterate, we have a 
$19 billion increase in the value of a company over 1 week, and a $.06 
billion savings for seniors in the Medicare system over 10 years.
  It is very easy to figure out who are the real winners and who are 
the real losers in this bill. Let me say in conclusion, there are some 
people in this body who believe we need this bill right now because the 
seniors have been waiting such a long time. They have. But from the 
seniors I have talked to personally when I was home in Little Rock over 
the weekend, to the hundreds who have called my office in the last 
week, they don't just want to get it done. They want us to get it done 
right. There is a big difference in just getting this bill done and 
getting it done right.
  They want more than hollow promises that this legislation offers. My 
plea is simple: Let's get it right so that our seniors can finally have 
a real benefit. The bill we are voting on today will wind up doing more 
harm than good.
  I yield the floor.
  The PRESIDENT pro tempore. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I yield 5 minutes to the Senator from 
Wyoming. I urge people who are proponents of this bill and want me to 
yield them time to be here. When there is not anybody here, I will use 
some of that time, but I am very glad to quit and put my statements in 
the Record to accommodate my colleagues. It is just a case of if we 
don't want to waste any of this valuable time, get over here.
  Mr. REID. Mr. President, if the Senator will yield, I would say the 
same thing. We have a long list of people who have said they want to 
come. When our time is called and we are not here, that time will run 
off of our time. So the 9 minutes people have, that time will be 
limited. If people come and want extra time, I would have to object to 
protect other Senators.
  The PRESIDENT pro tempore. The Senator from Wyoming is recognized for 
5 minutes.
  Mr. THOMAS. Mr. President, first let me thank the chairman of the 
committee who has worked so hard in bringing this proposal to the 
Senate floor. Not only has this been a part of his activity lately, but 
also the Energy bill. The Senator from Iowa deserves a great deal of 
support for what he has done.
  I am very pleased to support this first real opportunity that we have 
had to modernize and strengthen Medicare, the first time in over 30 
years. I am a little surprised at how negative some of our friends are 
in terms of being able to take this opportunity. Nobody suggests 
everything is perfect in this bill, but there is a lot of good in this 
bill. It is our opportunity to move forward and put in a program for 
the future.
  Congress has no greater domestic challenge than strengthening and 
modernizing the Medicare Program and providing seniors with access to 
prescription drugs. Remember that the House and the Senate both passed 
a Medicare prescription drug bill earlier this year. It has taken 
Congress years to get to this point. This bill is not perfect, but I 
don't think we should miss this opportunity to take some good steps in 
bringing Medicare into line with modern medical practices. We can't 
allow the opportunity to pass

[[Page S15675]]

that will give us a chance to provide seniors with prescription drug 
access. We can't let that slip through our fingers because of partisan 
politics. Access to new technologies in Medicare currently takes an act 
of Congress. That is no way to run a program that cares for our 
elderly. We need to have a modern program in place. We need to improve 
the quality of care for our sickest seniors and ensure they have access 
to appropriate medications.
  The current Medicare Program is outdated and inefficient. There is 
absolutely no effort to coordinate care for seniors with chronic 
illnesses with the most expensive prescription drug needs. Over 90 
percent of Medicare dollars are spent caring for folks who have already 
gotten sick, the most expensive type of care. We only spend 10 percent 
of Medicare dollars on preventive medicine. We need to focus on those 
folks as 6 percent of the seniors account for 55 percent of Medicare 
costs.
  Private plans are already making progress in implementing coordinated 
care programs. Medicare needs to catch up. This is our opportunity to 
not only allow for that but to provide for that.
  It doesn't make sense that Medicare today will pay for extended 
hospital stays for ulcer surgery at a cost of about $28,000 per patient 
but will not pay for drugs that eliminate the cause of ulcers, drugs 
that cost about $500 a year. Another example how out of step with 
modern medicine Medicare has become is that it will pay many of the 
costs to treat a stroke which can be as high as $100,000. Yet Medicare 
does not cover blood thinning drugs that could prevent strokes that 
cost less than $1,000 a year.
  We need to strengthen the Medicare Program and provide seniors with 
the ability to choose the type of health care plan that fits their 
individual needs, protections against catastrophic health costs, and 
assistance in purchasing necessary prescription drugs. We also have to 
ensure rural seniors have access to the same choices as urban seniors. 
The Federal Employees Health Benefits Plan has proven to be a good 
model for giving folks the same health plan choices no matter where 
they live. I plan to monitor the implementation of the new Medicare 
Advantage plans, PPOs, to ensure that rural seniors have access to the 
same type of choices as urban seniors. While it is true this bill 
currently fits within the $400 billion that has been set aside in the 
budget for Medicare, we all have concerns that it will cost more money 
than we anticipate.
  It is important that we monitor spending carefully or we will be 
placing a huge burden on our children and grandchildren. There are 
specific cost containment provisions that do the following: Trustees 
are required to notify Congress when general revenues are used to fund 
45 percent of the Medicare Program. If this situation is reported 2 
years in a row, it is called Medicare funding warning. After a Medicare 
funding warning is issued, the President must submit a proposal to 
respond within 15 days of submitting his budget. An expedited 
legislative process is then laid out.
  So it has taken years for Congress to agree to spend this $400 
billion in Medicare. It could easily take another decade for Congress 
to learn how to control Medicare spending.
  The PRESIDENT pro tempore. The time of the Senator has expired.
  Mr. GRASSLEY. Mr. President, I yield the Senator 3 more minutes.
  The PRESIDENT pro tempore. The Senator is recognized for 3 more 
minutes.
  Mr. THOMAS. Mr. President, I thank the chairman. As I said, I happen 
to be cochair of the Senate rural health caucus. We have worked on 
provider equity issues for a very long time. We have introduced over 
time several pieces of legislation with our rural colleagues that 
comprehensively address the payment disparity in the Medicare Program 
for rural providers, hospitals, physicians, ambulances, home health 
agencies, and rural health clinics.
  The majority of our health care plan has been incorporated into this 
Medicare prescription drug plan that is now before us, thanks very much 
to the chairman and ranking member. I am extremely pleased with the 
rural health provisions and thank Senator Grassley and Senator Baucus 
for their work. The rural hospital provisions in the Senate Medicare 
bill will make the equalization of the standardized amount permanent to 
hospitals; it will equalize Medicare disproportionate share payments. 
These payments assist hospitals where a large number of uninsured 
patients show up; it will lower the labor-related share from 71 to 62 
percent.
  Hospitals with fewer than 800 annual discharges will receive a 25-
percent increase. It strengthens the Critical Access Hospital Program. 
In my State, for instance, many of the small towns cannot afford full-
service hospitals, and we are moving toward critical access. This does 
a great deal with that issue.
  The bill provides flexibility within the 25-bed limit for acute care 
and swing beds.
  Not only is this a general movement forward with regard to Medicare 
and pharmaceuticals, but it does level the playing field for urban and 
rural areas.
  I ask my colleagues to keep the big picture in mind as we debate this 
legislation. Seniors need assistance with prescription drugs now. Also, 
our rural health care delivery system cannot afford to wait for 
Congress any longer.
  This bill is not perfect. No one said it is. We have concerns about 
the cost, but as I stated, we have plans to monitor the PPOs, to 
monitor the costs, to ensure seniors in rural areas have choices.
  I do not believe we can walk away from the opportunity that is now on 
the table and its importance to seniors and providers. For these 
reasons, I strongly support the proposal before us.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Ensign). The Senator from Massachusetts.
  Mr. KERRY. I thank the Chair.
  Mr. President, the real test of this bill, in the final analysis, is 
what it is really going to do for the senior population of the country. 
I know the arguments have been made forcefully that it is going to take 
$400 billion and give seniors something. But the test is not whether we 
are going to give them something, the test is whether or not we are 
going to do more harm than good.
  I believe when we measure the overall impact of this legislation on 
seniors and on the overall Medicare system, the bottom line is this 
does more harm than good. That is why I believe the Senate should stop 
the bill where it is.
  Obviously, we would like to pass a prescription drug benefit. All of 
us want that. This bill could be better. It could be better by being 
closer to what was sent out of the Senate which had the support of my 
colleague, Senator Kennedy, and others because it did more good than 
harm. But this bill moves in the wrong direction because while it was 
in the conference with the House, it was loaded up with major giveaways 
to the drug companies, insurance companies, and has put some measures 
in such as the restraint on the ability of the Federal Government to 
even negotiate for bulk purchases and thereby lower costs, which is an 
extraordinary reduction in the ability of the Government to try to 
constrain the costs overall of prescription drugs.
  These are the reasons I think this bill does more harm than good:

       No. 1, the prescription drug benefit for many is not 
     affordable, it is not comprehensive, and it is not 
     guaranteed. There are holes in coverage and complex rules. 
     The coverage gaps remain too high, and seniors are still 
     charged premiums even after their benefits shut down in the 
     so-called donut hole.

  Seniors are not assured a Government fallback plan with a set 
national premium. So if there are places where you don't have HMOs or 
there are other problems, they are going to have increases in their 
premiums under Medicare. It seems we ought to have a fallback with some 
sort of fixed price that will be affordable. At least 3 million seniors 
are projected to lose their gold-plated retiree prescription drug plan 
and be forced into a lesser benefit under the Medicare plan.
  The bill fails to adequately fix protections for low-income seniors 
and people with disabilities who currently rely on both Medicare and 
Medicaid for their coverage. That could cause as many as 6 million 
people to pay more money for fewer benefits.
  For seniors who think this bill is only designed to give them new 
benefits, they are going to be shocked to

[[Page S15676]]

find that this legislation actually raises $25 billion in new revenue 
directly out of the pockets of senior citizens by increasing the costs 
for traditional Medicare coverage of doctor and hospital visits.
  They will also be surprised to find out that while we are in such a 
rush to pass this bill, the benefit is not actually going to come to 
them until 2006. In the meantime, seniors get a disingenuous discount 
card. Most of them have four or five of the cards today anyway with the 
same amount of reduction, and it will give them no more discount than 
any of those handful of cards available to them in the marketplace now.
  The question ought to be asked: Why are we not beginning a Medicare 
prescription drug benefit until 2006? It took 11 months to put the 
entire Medicare Program in place. Are we telling seniors we can't, in 
the age of computers, put a prescription drug benefit in place in a 
matter of months? Why 2006?
  We all understand why. It has to do with the private companies and 
their taking time to ramp up, the amount of money they are going to 
get, and the unaffordability today.
  One of the biggest failures of this bill is its silence on 
controlling the rising prices of prescription drugs. Without an 
effective means to restrain double-digit drug price increases, this 
bill does nothing to protect seniors from ever-growing out-of-pocket 
costs. When they are pushed off Medicare into HMOs and the HMOs raise 
the prices, seniors are going to be screaming about the increased cost 
of prescription drugs.
  This bill prohibits the Government, as I mentioned earlier, from 
using its bulk purchasing power to negotiate volume discounts for 
Medicare prescription drugs. That doesn't make sense. In the State of 
Maine, they have done that with good results. It is interesting, they 
were taken to the Supreme Court and challenged in their right to do 
that, and the Supreme Court upheld their right to do that. As a 
consequence, they are able to provide more affordable prescription 
drugs to their citizens.
  This bill is more about shifting medical costs to beneficiaries than 
actually reining in prescription drug costs.
  In the name of private competition and to prevent the Federal 
Government from running the program, the Republicans came up with an 
unprecedented $12 billion slush fund to entice private plans to 
participate in this risky market. On top of giving them extra payments 
to participate, the bill does nothing to require that those private 
plans operate efficiently.
  The Medicare Program in its entirety now spends only 2 percent of its 
total expenditures on administration. By contrast, many of the health 
plans in the private market often commit as much as 15 to 20 percent of 
their expenditures to administration. So every dollar that goes to 
administrative costs is a dollar not available to improve benefits for 
Medicare beneficiaries. Smart stewards of taxpayer funds ought to 
demand that private plans be more efficient if they want to 
participate.
  So this bill is not just about adding a prescription drug benefit to 
Medicare, it is also a bill that represents an ideological excess by 
some who want to force the traditional Medicare Program down the path 
to privatization.
  Under this bill, 7 million seniors will be given this choice: pay 
more for Medicare and get forced into an HMO, give up on choosing your 
own doctor and hospital or watch your bills skyrocket. This so-called 
premium support provision is, in my judgment, irresponsible and unfair.
  The so-called cost containment provisions add insult to injury. By 
essentially placing a cap on future Medicare spending, this bill is 
going to attempt to force future Congresses to reconcile Medicare 
spending growth by cutting benefits, raising premiums, or increasing 
the payroll tax. I think that is unacceptable.
  In addition, this bill squanders another $6 billion on tax breaks for 
wealthy people, and that is going to have an impact in harming 
Medicare. The reason is that when a tax-free, high-deductible, 
catastrophic health policy, known as a health savings account, is 
created, it is principally going to be used by those who have the money 
who can afford it. The result is it is going to undermine traditional 
Medicare by cherry-picking the healthiest people and the wealthiest 
seniors out of the risk pool, thereby raising premiums by as much as 60 
percent for those who are left behind.
  In the end, we have to ask ourselves who wins and who loses in this 
bill. I think I have shown how seniors lose. So who wins? Well, 
insurance companies, pharmaceutical companies, lobbyists, and special 
interests of every stripe: A $125 billion to $139 billion bonanza, and 
the stock market confirms it. My hope is we will go back to the table 
and come up with a measure closer to what the Senate originally did.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, it is my privilege to give 5 minutes to 
the Senator from Montana, Mr. Baucus, whose cooperation with me and, 
hopefully, my cooperation with him has made this bipartisan agreement 
on Medicare possible to bring about what we need to do for seniors.
  The PRESIDING OFFICER. The Senator is recognized for 5 minutes.
  Mr. BAUCUS. Mr. President, with all due respect, while listening to 
some speakers, including the previous speaker, I would ask what bill 
they have been reading. It seems that they are referring to a bill 
which is not the conference report before us today. They are discussing 
problems that might occur in the future. But the problems described are 
based on some other bill, not the bill before us, not the conference 
report.
  The fact is that this legislation provides $400 billion for seniors. 
That is a $400 billion entitlement for U.S. seniors that they do not 
have today. I think we owe it to our American seniors to give them this 
$400 billion new entitlement for drug benefits. We are on the brink. We 
are close to passing it.
  In each of the last several years, we have come close but we were not 
able to finish the job. I do not think we are going to have this 
opportunity again. I do not think the Budget Committee is going to set 
aside $400 billion again, particularly with the increasing budget 
deficits and current account deficits. We will not have this 
opportunity again.
  This is a good bill. No bill is perfect. We are 535 Members of 
Congress. There are 535 people who have to work together to get 
something passed. This product before us today reflect this reality. It 
is $400 billion for seniors.
  It is also much closer to the Senate bill than the House bill. I hear 
complaints that the conference report is not nearly as good as the 
Senate bill. These critics have not read the conference report. The 
conference report is better than the Senate bill in many respects. For 
example, dual eligibles. The conference report covers low-income dual 
eligibles through Medicare. I think most Senators agree this is a 
better policy than what was in the Senate bill.

  We also have a solid fallback. It is wrong when Senators say there is 
no guaranteed prescription drug benefit to seniors. It is guaranteed in 
this bill. Fee for service is held harmless in this bill in all 
respects. So a senior can always get a standard prescription drug 
benefit under this bill. Whether one takes it from a PDP, a private 
drug plan, a PPO, or the fallback, this benefit is guaranteed for all 
seniors. Seniors will get their prescription drug benefits in this 
bill. It is guaranteed.
  As I mentioned earlier, this benefit is an entitlement. It is a $400 
billion entitlement expansion we have tried to pass in past years but 
are only able to get passed now.
  I have heard some Senators claim that this is not the Senate bill 
because it contains something called premium support, and it has a so-
called slush fund. Let me remind Senators, the so-called premium 
support is extremely watered down from what was in the House bill. It 
is time limited to 6 years. Only six cities will be demonstration 
projects. Low-income seniors in each of those six cities will be held 
harmless. They get full protection. In addition, the premiums for those 
who are not low income are limited to a 5 percent change. Fee for 
service Medicare is held harmless in all respects in those six cities 
where there may be a demonstration project. They are held harmless in 
all respects, except the

[[Page S15677]]

Part B premium may go up by no more than 5 percent. Any other change in 
these demonstration areas has to be enacted by Congress--enacted by to 
Congress to extend, enacted by Congress to expand, enacted by Congress 
to change.
  What has happened in the past when we have had these demos? They have 
been repealed. They have not been extended. In 1997, Congress set up 
premium support demonstration projects. Congress then rushed in to 
repeal them as quickly as they possibly could. They were gone. The same 
will happen here. Do my colleagues know why? Because the dollars 
provided to private plans in the premium support demonstration areas 
will be much less than in other parts in the country. The private plans 
will not be able to survive.
  Mark my word, those plans, those physicians, and those providers in 
the demonstration MSAs are going to come to Congress and ask us to 
repeal it.
  Regarding this so-called $14 billion slush fund, $12 billion was in 
the Senate bill, which seventy-six Senators voted for. This is just $2 
million more, and it does not come out of the $400 billion for drug 
benefits. That $400 billion for drug benefits is still there, but the 
conference report does have $2 billion more than the Senate bill, for 
which 76 Senators voted.
  To close, I will return to my main point. This is a very good bill. 
We have the opportunity now to provide prescription drug benefits for 
seniors. We are not going to have this opportunity in the future. 
Beneficiaries have waited a long time for this benefit. This bill is 
much closer to the Senate bill than it is to the House bill. If we do 
not pass this now, I must ask you, what are we going to tell our 
seniors when they say to us, Mr. Senator, Ms. Senator, you told us you 
were going to give us prescription drug benefits but you found some 
reason to say no and you voted against it and did not give it to us; 
why did you give us the help you promised?
  We have an obligation to help our seniors pass this legislation.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I rise to talk about the bill before 
us.
  When the Senate first voted on a prescription drug benefit for 
seniors back in June I offered an amendment. My amendment was simple. I 
proposed that we give seniors a prescription drug benefit sooner rather 
than later. But that amendment was voted down by the Republican 
majority.
  So now, under this conference report, the drug coverage doesn't start 
until January 2006 23 months from now. Yes, 2006.
  So why so long? One clue is illustrated on this chart. Notice that 
Election Day is 11 months from now. And notice that the prolonged 
effective date for the drug benefit is conveniently well past election 
day.
  I would like to remind my colleagues that the original Medicare plan 
was signed into law by President Johnson on July 30, 1965 and 11 months 
later July 1, 1966--all the people who were eligible for the program 
were enrolled in the program.
  The entire system was created from scratch in 11 months.
  I know the President is desperate to take credit for passing a 
prescription drug bill when he faces voters next year. But he does not 
want the many shortcomings in this plan to be fully evident to seniors 
until well after the election. My Republican friends are hoping that 
seniors won't find out what they don't get from this legislation until 
it is too late. It is almost a cruel joke.
  When a prescription drug benefit is signed into law, all of our 
offices will be flooded with calls by seniors asking a simple question: 
``How can I sign up for this benefit?'' They will have seen President 
Bush sign a bill with great fanfare, and they will have seen many 
Members of Congress crowding the stage with him, and everyone will say 
``we have put a prescription drug benefit in place.''
  And when seniors call to find out how soon they can receive the 
benefit, we will have to tell them ``2006.'' Sorry, President Bush's 
2003 Medicare Prescription Drug plan will not start until 2006.
  No one wants to provide a real Medicare prescription drug benefit to 
seniors more than the Democrats. After all, Democrats created Medicare, 
and we have protected it for decades.
  Everyone knows that Republicans resisted the creation of Medicare and 
have opposed it ever since. It wasn't too long ago that former House 
Speaker Newt Gingrich expressed his desire to see Medicare ``wither on 
the vine.''
  Well, the bill before us today is the first major step toward the 
disintegration of Medicare as we know it.
  In reality, this bill isn't as much a benefit for seniors as it is a 
big benefit for HMOs and other private sector special interests who 
want to tear the Medicare program to pieces.
  So, what is it specifically that the President is afraid seniors will 
find out before 2006?
  Is the President afraid that seniors will realize they are going to 
pay at least $810 before they break even and get any benefit from this 
plan?
  For many seniors that is more money than they spend on prescription 
drugs right now. Up to 30 percent of beneficiaries would pay more for 
enrolling in the plan than they would receive in actual benefits.
  Is the President worried that seniors are going to discover that 
there is a huge gap in coverage?
  Under this plan, a senior will pay a premium estimated at $35 a 
month, a $250 deductible, and 25 percent coinsurance payments until 
reaching $2,250 in drug expenses. What happens then? Seniors get no 
coverage. You heard me correctly nothing, zero.
  That is right. At that point, seniors will continue to pay their 
premiums but they will also pay 100 percent of their drug costs. Only 
until they have reached the catastrophic limit of $5,100 in drug costs 
does any benefit return. And by that time, seniors will have incurred 
$3,600 in out-of-pocket spending. This is called the ``hole in the 
doughnut'' and it sure doesn't sound like such a good deal to me.
  And remember that nowhere in this bill does it say that the premium 
is only $35. It could be significantly higher. The $35 figure is an 
estimate. We all know how good this administration has been at making 
estimates.
  Is the President afraid that seniors will figure all this out? You 
bet he is.
  Seniors deserve a much better program than what the Senate is 
considering right now, and they certainly deserve it before 2006.
  There are some who will say we must have this gap in coverage because 
we only have $400 billion to work with. Well, I say if there are 
insufficient funds in the budget to give seniors real drug coverage, 
then it is the result of choices made by the President and his party. 
They chose to provide a massive tax cut to the wealthy the people who 
need it least and they chose it at the expense of Medicare.
  What else is in this bill that the Republican's don't want seniors to 
find out about until 2006?
  This bill will effectively destroy the Medicare program that has 
worked for almost 40 years. That is right. Say goodbye to Medicare as 
we know it.
  This bill does not expand Medicare; it opens the door for HMOs to 
take over the program. And that means that seniors will be at the mercy 
of these HMOs. And as everyone knows, HMOs will not pay for all 
prescription drugs.
  Under this bill, seniors will be limited to the prescription drugs 
covered by their drug plan or HMO. In order to keep costs down, these 
drug plans and HMOs will use something called a ``formulary.'' A 
formulary is a list of drugs that are covered under the health plan. If 
a particular drug is not on the formulary then it is not covered.
  That means that after a senior has paid her premium and her 
deductible if she needs a certain medication not on the list used by 
her drug plan or HMO, then she will pay 100 percent of the cost of that 
medication.
  Where is the benefit in that?
  Mr. President, this bill goes to great lengths to prop up and protect 
HMOs at the expense of seniors. Included in this bill is something 
called the ``Stabilization Fund.'' It should be called the ``HMO Slush 
Fund.'' This fund is designed to ensure that HMOs succeed by offering 
artificially lower premiums and better benefits than traditional 
Medicare. This bill hands over $12 billion of taxpayer money for this 
effort.
  This is $12 billion that could be used to close the coverage gap or 
lower the deductible but our Republican friends have made a choice to 
create a $12 billion slush fund for the insurance industry.

[[Page S15678]]

  I want to spend a few minutes talking about the overall impact of 
this bill on seniors in the State I represent--New Jersey.
  The most important reason why I am voting against this bill is 
because I am convinced that more seniors in my State will be hurt by 
this legislation than helped.
  There are approximately 1.1 million seniors in New Jersey.
  Currently 430,000 New Jersey retirees receive prescription drug 
coverage from their former employers. Because this bill provides a 
disincentive to employers to continue offering coverage to retirees, 
over 90,000 seniors in New Jersey will lose their existing drug 
coverage, which often offers more generous benefits.
  This bill is also going to make poor seniors in my State worse off. 
In New Jersey, Medicaid covers the drug costs for seniors up to 100 
percent of the federal poverty level. That is an income of 
approximately $9,000 a year for an individual or $12,000 a year for a 
couple.
  In New Jersey, low-income seniors currently on Medicaid have access 
to whatever drugs they need and they don't have any co-pay for their 
prescriptions. Under this bill, however, they will now pay $1 per 
prescription for generic drugs and $3 per prescription for brand name 
drugs.
  Low-income seniors tend to be in worse health and, as a result, they 
have higher annual drug spending. A senior with an annual income of 
$7,000 or $8,000 simply doesn't have the discretionary income to shell 
out $15 or $20 or $25 for the prescriptions that he or she may need.
  That may not sound like a lot of money to my colleagues, but for low-
income Americans, it can force them to choose between buying medication 
and buying food or buying medication and keeping the heat turned on in 
the winter.
  Mr. President, this bill represents an enormous opportunity 
squandered. We had a real chance to do something right here. We had 
$400 billion to improve the lives of 34 million seniors, 14 million of 
whom don't have any prescription drug coverage right now. Frankly, we 
blew it.
  When I look at this bill, I see a bill that makes seniors in New 
Jersey worse off.
  I see a bill that makes poor seniors worse off.
  I see a bill that takes away choices from seniors.
  I see a bill that wastes taxpayer money on a slush fund for HMOs.
  I see a bill that ``hides the ball'' until 2006.
  And I see a bill that I cannot, in good conscience, support.
  I yield the floor.
  Mr. GRASSLEY. Mr. President, let me inquire of the Democrats. Could 
we have a Democrat speak?
  Mr. REID. Senator Akaka is here and raring to go.
  Mr. GRASSLEY. Thank you very much.
  The PRESIDING OFFICER. The Senator from Hawaii is recognized.
  Mr. AKAKA. Mr. President, I rise today to express my opposition to 
the conference report for H.R. 1, the Medicare Prescription Drug and 
Modernization Act of 2003.
  For far too long Medicare has lacked a prescription drug benefit. The 
lack of this benefit has been the gaping hole in the Medicare safety 
net. I have consistently supported efforts to establish a meaningful 
Medicare prescription drug benefit. I supported S. 1, the Prescription 
Drug and Medicare Improvement Act of 2003, because it would have been 
an important step forward in meeting the prescription drug needs of 
seniors. I am extremely disappointed that instead of making 
improvements in the Senate-passed bill, the conference report is now a 
false promise to our seniors. Mr. President, the conference report 
contains too many flaws to warrant passage. The conference report lacks 
appropriate prescription drug coverage for seniors. Indeed, many 
seniors will be worse off under this proposal. The conference report 
also weakens the existing Medicare entitlement program.
  The prescription drug coverage in this legislation is simply not 
comprehensive enough. Too small an allowance is provided within the 
legislation to establish a meaningful prescription drug benefit for 
seniors. Instead of reducing the size of the coverage gap, the 
conference report would require that seniors pay for all of their drug 
costs after their total drug spending reaches $2,250. Despite 
continuing to pay their premiums, they will not receive any additional 
support until they spend about $5,000. This gap is about twice as large 
as the gap that was contained in the Senate-passed bill. Why should 
seniors have to continue to pay premiums when they do not receive any 
benefits if they are in the gap? This coverage gap must be filled.
  Mr. President, for too many seniors in Hawaii and across the nation, 
prescription drug coverage will be worse under the provisions in the 
conference report. Seniors who are currently provided prescription 
drugs through their state's Medicaid programs will have federally 
mandated copayments imposed on them. For example, Hawaii's seniors who 
have incomes of less than 100 percent of the poverty level and obtain 
their medications through Hawaii's Medicaid program will be worse off 
under this plan. They will now have to pay copayments to get their 
prescription medication. Hawaii's seniors are not alone. The Center for 
Budget and Policy Priorities believes that most of the 6.4 million 
individuals that have dual eligibility for Medicare and Medicaid will 
be charged more under the conference agreement for medication than 
under existing law.
  I am afraid that too many low-income seniors will not be able to 
afford even these meager copayments. Those who cannot meet these 
copayments will be denied access to the medications they are currently 
being provided. Again, they will go without the treatment they need. In 
addition, the financial burden that the conference report places on 
states may lead to a reduction in other Medicaid services that states 
will no longer be able to afford, because of the substantial share of 
prescription drug costs that states will have to pay the federal 
government for seniors who are eligible for Medicare and Medicaid.
  Mr. President, I am also concerned about the millions of retirees 
that will lose their existing coverage. We have seen over the past few 
years that there has been a disturbing trend of reducing benefits for 
retirees. Creating this voluntary benefit will only accelerate this 
trend. The intent of the legislation is to expand prescription drug 
coverage for seniors, not merely to shift the financial burden of 
existing coverage to the federal government. Many seniors will be 
forced to rely on Medicare, which will provide a less generous benefit 
than what they currently enjoy. It is estimated that 17,850 Medicare 
beneficiaries in my home state of Hawaii will lose their retiree health 
benefits as a result of the enactment of this legislation. If Medicare 
beneficiaries lose their employer-based coverage, they may have to pay 
more for a Medicare drug benefit that provides less comprehensive 
coverage. Despite the subsidies included in the conference report to 
encourage the continuation of existing coverage, it is estimated that 
approximately 2.5 million people will lose their coverage.

  Mr. President, I along with Senators Warner, Allen, Mikulski, 
Sarbanes, Johnson, and Corzine requested that the conferees include our 
bill, S. 1369, in the conference report to ensure that present and 
future federal retirees receive the same level of prescription drug 
coverage. The government's Federal Employee Health Benefit (FEHBP) 
program for its employees and retirees stands as a model for all 
employer-sponsored health care plans. Our legislation would protect 
prescription drug benefits for federal retirees by ensuring parity for 
these benefits with other FEHBP subscribers. The other body approved 
companion legislation, H.R. 2631, on July 8, 2003. While the Medicare 
reform bill includes subsidies and tax credits to employers who retain 
existing drug benefits for their retirees, such incentives provide no 
guarantee of the FEHBP drug benefit for the government's own 
annuitants. If FEHBP is the model for this reform, the federal 
government must not drop or reduce drug benefits for retired FEHBP 
enrollees. Our legislation sends a message to other employer-sponsored 
plans that the federal government stands behind its commitment to 
retired workers. I will continue to work to bring about the enactment 
of this bill.
  Mr. President, the cost containment provisions in the legislation 
provide a fast-track legislative process to cut Medicare benefits if 
general revenue funding for the entire Medicare program exceeds 45 
percent. This arbitrary process is included while more meaningful 
provisions to control the costs of prescription drugs were left out. 
The conference report prevents the federal government from using the 
bargaining power of 40 million senior citizens to

[[Page S15679]]

bring down the cost of prescription drugs for the Medicare program.
  Mr. President, the conference report weakens Medicare. It imposes 
means tests for Medicare Part B premiums and for low-income subsidies 
for the prescription drug benefit. This is the beginning of the end of 
Medicare being as a universal benefit. This is the first step towards 
means testing other parts of the existing Medicare program. Means tests 
place greater burdens on seniors. They also create administrative 
difficulties for the Centers for Medicare and Medicaid Services.
  Even more objectionable is the assets test used to determine the low-
income subsidies for the prescription drug benefit. The assets test is 
completely unrealistic. According to Families USA, the assets test will 
deny subsidies to 2.8 million very low-income seniors if they have even 
a small amount of assets. For example, the assets test disqualifies 
people who have household goods and personal effects worth more than 
$2,000. Medicare is an entitlement and participants should not be 
subjected to these demeaning means tests. Additional assistance should 
not be denied because they happen to have set money aside for future 
expenses.
  Mr. President, this legislation also threatens existing Medicare 
benefits because it includes billions of dollars for subsidies for 
private plans. This increases premiums for seniors, raises government 
costs for health care, and damages the solvency of the Medicare trust 
fund.
  Mr. President, I also want to express my disappointment that language 
similar to an amendment that I had offered, which was accepted as part 
of the manager's package for S. 1, was not included in the conference 
report. While I thank Chairman Grassley and ranking member Baucus for 
their assistance with this provision, it was not included in the 
conference report. My amendment would have allowed my home state of 
Hawaii to benefit from the increase in Medicaid disproportionate share 
hospital (DSH) payments included in the bill. Medicaid DSH payments are 
designed to provide additional support to hospitals that treat large 
numbers of Medicaid and uninsured patients. The Balanced Budget Act of 
1997 (BBA) created specific DSH allotments for each state based on 
their actual DSH expenditures for fiscal year 1995. In 1994, the State 
of Hawaii implemented the QUEST demonstration program that was designed 
to reduce the number of uninsured and improve access to health care. 
The prior Medicaid DSH program was incorporated into QUEST. As a result 
of the demonstration program, Hawaii did not have DSH expenditures in 
1995 and was not provided a DSH allotment.

  The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection 
Act of 2000 made further changes to the DSH program, which included the 
establishment of a floor for DSH allotments. However, states without 
allotments were again left out. Other states that have obtained waivers 
similar to Hawaii's waiver have retained their DSH allotments. Only two 
states, Hawaii and Tennessee, do not have DSH allotments.
  The conference report provides that states without DSH allotments 
could receive additional assistance if their waiver was terminated or 
removed. While this may possibly benefit Tennessee, this language will 
prevent Hawaii from obtaining any additional Medicaid DSH support that 
is included in this bill. The conference report includes an additional 
$6.35 billion in Medicaid DSH relief to the states. Hawaii does not 
receive any of these funds. Hawaii's hospitals are struggling to meet 
the healthcare needs of the uninsured. Hawaii cannot continue to be 
left out. Additional DSH payments would help Hawaii hospitals to meet 
the rising health care needs of our communities and reinforce our 
health care safety net. All fifty states need to have access to this 
additional Medicaid DSH support. I will continue to work to correct 
this inequity.
  Mr. President, as I said at the start of my remarks, this legislation 
is a false promise. Even if this conference report is enacted, we will 
need to enact follow up legislation to address the flaws in the bill. 
We will also have to repeal several of the provisions that weaken the 
existing Medicare program. Many have said this is an important step 
forward in the Medicare program. I disagree. This conference report 
takes too many elderly Americans backwards in terms of their benefits 
to constitute forward progress or forward thinking. Many people, 
particularly seniors, will eventually come to the conclusion that I 
have reached on the legislation and Congress will regret this rush to 
judgment. After reviewing the provisions in this legislation, I am 
disappointed that this bill is a false promise that undermines the 
existing Medicare program. Thank you, Mr. President.
  Mr. GRASSLEY. I yield myself 30 seconds, before I yield to the 
Senator from Maine 7 minutes, for just a little bit of history and to 
applaud the Senator from Maine.
  She was active in this issue of Medicare prescription drugs a long 
time before I was. But on July 25, 2001, we held our first meeting of 
what was called the tripartisan group. She was obviously part of that 
tripartisan group along with Senators Hatch, Jeffords, Breaux, and 
Grassley.
  I remember that meeting we had. The AARP sent us a birthday cake with 
a pie-shaped piece cut out of it. Their admonition to the tripartisan 
group was: Fill in the missing piece. The missing piece of Medicare was 
prescription drugs.
  The Senator from Maine has been very aggressive since July 25 in 
various ways, helping us fill in that piece of the pie. On August 1 of 
that year, we held a news conference, all five of us, announcing our 
plans for doing that. We have not exactly come out where we were a year 
ago. We probably have come out a lot better with the legislation we 
have before us. But regardless, the Senator from Maine was in on the 
ground floor, a long time before I was, on that issue.
  I yield to the Senator from Maine 7 minutes.
  Ms. SNOWE. Mr. President, I thank the chairman for his most gracious 
remarks. As I said on Saturday, without his considerable efforts, 
determination, leadership, and willingness to work across party lines, 
we would not be where we are today. I want to congratulate him and 
commend him for the enormous leadership and support he has given to 
this issue as the chairman of the committee and throughout this process 
that has obviously been a difficult one.
  I had the opportunity on Saturday to elaborate on my views with 
respect to this conference report. I think we are on a precipice of 
opportunity and ushering in a new era in the Medicare Program. While 
this conference report does not rise to the level of everyone's 
aspirations and expectations when it comes to prescription drugs, I 
think we have to understand that this report was melding some very 
disparate views in very disparate bills. We must, in the final 
analysis, measure these results for the millions of seniors who will 
benefit against the benchmark of the stagnation of the status quo.
  The question is whether the status quo was preferable. Someone said 
you may have to fight a battle more than once to win it. We know how 
many battles we have fought on this issue over the last 5 or 6 years. 
How many more battles and how many more years will have to go by and at 
whose expense? I think we know at whose expense. It will be at the 
expense of the 10 million seniors who do not have prescription drug 
coverage currently. It will be at the expense of the 14 million seniors 
who are under the 150 percent of poverty level, who will now get a very 
generous level of support and subsidy to finance this most vital drug 
coverage.
  This conference report embraces many of the critical benchmarks that 
we had established previously, the ones to which Chairman Grassley was 
referring with respect to the tripartisan bill that should have passed 
last year, a year ago. I was urging the Senate to pass that 
legislation. We lamented the loss of that opportunity, but that time 
has passed.
  The Senate-passed bill was something we all preferred; there is no 
question about it. But I think we also understand the nature of 
conference committees. The key point to remember about this conference 
report is that it embraces the critical benchmarks and principles that 
we all championed: The prescription drug benefit would be universal, it 
would be voluntary, it would be permanent, it would be comprehensive, 
it would be affordable, there would be equal benefits across all

[[Page S15680]]

plans, there would be a Government fallback to ensure that every 
senior, regardless of where they live in America, would have access to 
affordable drug coverage, and we would target the most assistance to 
those most in need.
  While this is not everything it could be or should be, we have to 
measure the results against the status quo.
  I would like to focus for a few moments on one of the issues that has 
been talked about consistently and understandably so, the privatization 
of Medicare. There is no question that I certainly would not support 
anything that would lead to the privatization of Medicare. In fact, the 
Senate-passed bill had nothing in the feature of a premium support 
proposal. Now we have to discuss what is before the conference and what 
has actually changed from what was in the House-passed legislation. I 
think it is critical that we understand the differences in what is 
included in this conference report. The House-passed bill sought to 
provide for an open-ended, permanent nationwide privatization of 
Medicare through an untested and untried approach known as the premium 
support proposal. It is certainly no secret that I was totally opposed 
to that approach, as well as many of us here in the Senate. But it is 
also critical to know what is now being applied in this conference 
report, and there should be no mistake that this conference report puts 
an end to that proposal. It puts an end to that effort to privatize.
  I certainly would have said the privatization approach in the House 
bill could have led us down the path of what the program of health care 
looked like prior to 1965 when Medicare was created, which was a 
patchwork delivery of health care to seniors in America. We don't want 
to go back to that; that would be a retreat. The House approach would 
have wild fluctuations in premiums, as we saw in the charts that were 
issued by CMS within the Department of Health and Human Services. There 
would be wild fluctuations not only between States but within States 
and even within congressional districts.
  In response to that concern, I and 43 of my colleagues wrote a letter 
saying that it would be totally unacceptable--not only the open-ended, 
permanent nationwide system that the House-passed bill included but 
also even the narrowed-down version of a demonstration program that 
would have captured 10 million seniors. That was unacceptable.
  I want to make clear where we are today. We have eliminated the whole 
approach of the House. Now, what is in this conference report as shown 
in this chart here today is one Federal demonstration program. That is 
what it is all about. Where the effort once centered on an open-ended 
national program that would have ultimately ended up in the wholesale 
undermining and destabilization of the Medicare Program, we now have a 
pared back demonstration project that would be limited to 46 
metropolitan statistical areas; that certain criteria will be included 
which will determine those areas; but according to the Congressional 
Budget Office, based on that criteria that, in fact, it would not 
include more than 650,000 to 1 million seniors.
  What we were talking about originally in the House-passed bill was a 
nationwide program, but we are now back to a pared-down demonstration 
project, and we include criteria that would limit the size of the 
demonstration project to 650,000 to 1 million, according to the 
Congressional Budget Office.
  Also, there is protection for low income. Where the original proposal 
by the House had no protection for low income under 150 percent of 
poverty level, now they are protected as well. They will not be 
included in this demonstration project.
  It is very important to understand some of those changes.
  In addition, this program sunsets in 2016. It doesn't start until 
2010. We obviously have time between now and then after passage of the 
legislation to address any further concerns. But we move the date from 
2008 to 2010. There is an ending date--a sunset of 2016. No extensions 
are allowed without new legislative action.

  There are six MSAs with criteria that I mentioned earlier. Now we are 
not talking about open-ended, nationwide; we are not talking about even 
10 million seniors. We are talking about 650,000 to 1 million.
  As far as any premium fluctuations, it is limited to 5 percent. 
Without the compounding, that would have had the net effect of having a 
30-percent increase over 6 years. Now that would be phased in.
  I should also mention that this demonstration project is phased in 
starting in 2010. It is not totally in place until 2015 and 2016. In 
2016, it ends. Even with the 5 percent, it will be phased in over 4 
years. It represents 5 percent each year. We have made substantial 
changes. It is a wholesale change of what was in the House proposal.
  This is a limited Federal demonstration program that allows for the 
testing of perhaps new ideas. But nothing can be implemented--nothing 
can be done--until the Congress would want to address those issues 
based on the results from that demonstration project.
  That is very important for Members of this Senate to understand in 
terms of the differences in scope, size, implementation effect, and 
what it would do to the underlying program.
  Finally, one other additional point with respect to this 
demonstration project:
  Also in this legislation we terminated the financial incentives that 
are offered to private plans participating in the demonstration when it 
begins in 2010. I think we have to understand what the true facts are.
  This demonstration project will not undermine the underlying 
traditional Medicare Program as we know it. Obviously, it would be 
preferable not to have it in this legislation, but this is the essence 
of a compromise that is before us, and it is very limited in terms of 
size and scope.
  I think it is important for Members of the Senate to realize that.
  In the final analysis, I think we cannot lose this opportunity. This 
is an idea whose time has not only come, but it is long overdue.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. DODD. Mr. President, I yield myself 9 minutes.
  Mr. President, let me commend the Senator from Iowa, the Senator from 
Louisiana, the Senator from Montana, and others who have worked on this 
so very hard. I want to express my gratitude to them for spending so 
much time on this issue.
  Let me also briefly thank my own staff. I am not a member of the 
Finance Committee. But this issue transcends committees. This is 
legislation that all of us have a deep interest in. I thank Jim Fenton 
and Ben Berwick of my staff for the tremendous effort and time they 
have put in.
  I spoke at some length on Friday about this issue. Let me divide the 
issue very quickly.
  A prescription drugs benefit, I think, would pass 100 to 0. If we had 
a vote on the prescription drug benefit--you would hear speeches that 
it didn't go far enough and concerns about the donut hole and whether 
or not 150 percent of poverty was the right margin to be drawn--but I 
suspect all Members in the final analysis would support the initiation 
of a prescription drug benefit on the assumption that we would work to 
improve it in the years ahead.
  If I were voting on that issue alone, I would stand here and raise 
concerns about matters included in that provision, but it would have my 
wholehearted support as a long overdue proposition. I won't dwell on 
that aspect of the legislation here this morning.
  The second piece of this bill, however, is one that causes me 
concern. This second piece is more difficult to understand, it is less 
clear than just $400 billion for prescription drugs. The second part of 
this bill is a major change in Medicare. The program has been around 
for 38 years and is currently serving 41 million Americans. It is 
probably the most successful and the most wildly supported Federal 
program of the 20th century. I can't think of any program, except 
Social Security, which has been so widely supported. We are about to 
take that program which has worked so tremendously well, and I think 
disadvantage it significantly. Let me explain briefly why.
  The sponsors of the legislation say they are not forcing seniors out 
of traditional Medicare. They claim they are simply creating 
competition as a result of offering seniors a choice. Let us talk about 
this so-called ``competition.''

[[Page S15681]]

  Private plans under this bill will be reimbursed at a higher rate 
than traditional Medicare--9 percent higher. On top of that, this bill 
also makes available $12 billion in a slush fund to be used to lure 
private plans into the market on a corporate subsidy. You get a 9 
percent differential and $12 billion. That is what you get to compete 
with Medicare. You do not have to have a Ph.D. in math or a Ph.D. in 
business law to understand that kind of an advantage certainly is not 
what I call a level playing field. It is not competition, it is a 
rigged game. The bill stacks the deck against traditional Medicaid and 
the effects are self-perpetuating. Traditional Medicare grows weaker, 
private plans grow stronger, forcing more beneficiaries out of the 
traditional programs and into the open arms of HMOs.

  It is easy to get bogged down in the complexities of this bill. Let 
me state it simply: The weakening of the traditional Medicare Program 
caused by this bill will force seniors to pay more and face the 
prospect of fewer benefits.
  Remember, Medicare initially said whether you are wealthier and 
healthier or poorer and sicker, we all work together. Now we are 
splitting off the wealthier and healthier and leaving the sicker and 
poorer on the side.
  This bill will actually mean less choice, in many ways, for seniors. 
Seniors like the traditional Medicare Program precisely because it 
offers choice, the very thing the supporters of this bill claim to be 
providing. Under the current system, seniors have a choice of doctors. 
But that choice would soon disappear with a rise in private managed 
care plans.
  I hope this prediction is wrong but I am fearful it is right. If this 
prediction is wrong, it most likely means seniors have elected not to 
move into private plans and HMOs will leave the market in many areas, 
as we have seen in the past with the Medicare+Choice plan, taking $12 
billion with them that might have been used to reduce the cost of 
prescription drugs rather than provide a subsidy for the private plans 
to compete with Medicare.
  Even more ironic is that this highly unfair system is being 
championed by self-proclaimed champions of free enterprise. This bill 
gives $12 billion to HMOs to unfairly compete and it does nothing to 
control drug prices. In fact, it actually prevents the Medicare Program 
from negotiating lower drug prices. Under law, Medicare is prevented 
from using its purchasing power to negotiate with drug companies for 
lower prices. What is wrong with letting free enterprise work here in 
order to lower drug prices?
  If Medicare is so in need of reform, why in this bill are we 
subsidizing private companies and not allowing the Medicare 
beneficiaries to compete for lower drug prices? The reason is simple: 
The champions of free enterprise know that private plans cannot compete 
with traditional Medicare on a level playing field. The subsidies are 
necessary because Medicare is actually more efficient. Medicare 
delivers services at a lower cost.
  In 2010, a provision included in this bill will go into effect that 
begins an experiment with our Nation's seniors. Why we are taking our 
seniors, the most vulnerable, and turning them into guinea pigs for an 
experiment is beyond me. That is what we are beginning to do. Given the 
unlevel playing field I have described, such a competition would 
further disadvantage the traditional Medicare Program.
  The bill writes into it right now a cap of 5 percent premium 
increases for each year in regions effected by this premium support 
experiment. The bill anticipates premium increases even before we have 
tried the program, and they are going to take 6 million seniors and 
throw them into an experiment, a pilot program, the outcome of which 
has already been determined by the bill's authors when they talk of a 
cap at a 5 percent premium increase. How is Medicare going to compete 
then? The outcome is predetermined, forcing those seniors into a 
disadvantaged program. The weaker and the poorer and the sicker seniors 
will end up paying more or having benefits cut.
  I am afraid we can only conclude one thing: The architects of the 
bill, with all due respect, spend billions of dollars not to reform 
Medicare, but to dismantle it. It puts patients out there to wither on 
the vine, as Newt Gingrich said 8 years ago. If the man who wanted that 
embraces this legislation, that could mean one of two things: Either 
his opinion has changed or this legislation really is intended to end 
Medicare. I submit that I see no evidence his opinion has changed.

  We set out to add a prescription drug benefit to Medicare. I applaud 
that. We could have had a bipartisan bill that did just that. It could 
have been approved by this Chamber overwhelmingly. But instead, we are 
being asked to vote on a wolf in sheep's clothing.
  The second part of the bill, the changes in Medicare that will effect 
41 million seniors, two-thirds of whom make less than $80,000 and above 
$13,470, for those in that category, this bill offers disturbing 
alternatives.
  For those reasons, I urge that when the cloture vote occurs, Members 
vote against it. We can do better. I applaud the efforts made, but we 
can do better on this legislation than we have done.
  I don't believe I used all 9 minutes, but others have gone over 9 
minute. I yield back my time for those on the Democratic side who would 
like to be heard on the legislation.
  Mr. GRASSLEY. I yield 5 minutes to the Senator from Arkansas. If 
there is no one on the other side to speak, I can give the Senator a 
little bit more.
  The PRESIDING OFFICER. The Senator is recognized for 5 minutes.
  Mrs. LINCOLN. Mr. President, I rise to speak about the Medicare 
prescription drug coverage conference report before the Senate today.
  I do strongly believe this is a historic opportunity. I believe we 
should not let it pass by. This proposal represents a $400 billion 
expansion of the Medicare Program, the largest expansion of Medicare 
since it was created nearly 40 years ago.
  While I intend to support this measure, I think what is most 
important at this juncture is to be honest with the American people. 
For me, it means being honest particularly with the people of Arkansas 
and the Arkansas seniors. This bill cannot be and will not be all 
things to all people. The bill will not provide free drugs for 
everyone. Some seniors, because we have talked about this for so long, 
have come to their own conclusion that what we were trying to get was 
free drugs for all seniors in this country.
  I have to remind people we are in debt in our country up to our 
eyeballs, as far as the eye can see. We did not have an opportunity to 
provide free prescription drugs to all seniors in this country. 
Therefore, we have to do the best we can do right now with what we 
have. I am not pleased about the debt. I didn't support the last tax 
bill and I am scared to death of the debt we are creating for my twin 
boys who are 7 years old right now.
  The fact is, in this year's budget we have $400 billion dedicated to 
American seniors. We have to do the best job we can to make that 
productive for them in this current circumstance because next year and 
the year after that, it will not be there; we will still be in debt up 
to our eyeballs.

  We have a tremendous amount to do. This bill starts that. It is 
unfortunate the issue of adding a prescription drug benefit to Medicare 
has become so politicized. Several Democratic conferees, many of them 
experts on this issue in their very own right, were not permitted the 
opportunity to negotiate the final bill. They were conferees in name 
only. I join them in their frustration and how they feel. They have a 
right to be angry. It was wrong and unjust. They were prohibited from 
being part of this very important conference. This bill would have been 
better had they been involved.
  Despite the flaws in this legislation and the partisan process we 
witnessed over the last few months, Democrats and seniors should be 
pleased that many of the principles we fought for are contained in this 
bill.
  Is this the bill I would have written? Absolutely not. But there are 
components in this bill that are productive and move us forward. On 
behalf of our seniors, we must seize that opportunity.
  The bill before the Senate today will provide all of the 453,438 
Medicare beneficiaries in Arkansas with access to a Medicare 
prescription drug benefit for the first time in the history of the 
Medicare Program. Every senior will have access to a drug benefit to 
help them with the extraordinary cost of prescription drugs. 
Extraordinary.

[[Page S15682]]

  Again, it is not all things to all people. If you find yourself in a 
position where you are well off and you do not have a lot of 
prescription drug costs, there may not be in here the most advantageous 
drug program for you, but for the sickest and the neediest of this 
country we have come a long way in this bill.
  While the benefit is somewhat meager, I am confident we will improve 
on it in the future for those who maybe do not get the best return from 
this package. But this bill targets the sickest and the neediest of 
seniors, those with the highest drug costs and those who are in the 
lowest income category.
  Because of the $400 billion limitation, that is where we have gone. 
When fiscal times improve, we should eliminate the gap in coverage. I 
am concerned about those seniors who will be hit with the gap in 
coverage and have to continue to pay their premiums. But the point is, 
every senior in Medicare in Arkansas will be able to choose to enroll 
in a new voluntary drug benefit while staying in the traditional 
Medicare Program. This is a huge victory. Seniors will not have to 
leave the Medicare they love to get a prescription drug benefit.
  That is because the bill contains a fallback plan--a Government 
guaranteed plan or safety net--that will provide drug coverage should 
private, drug-only plans not come into their area.
  We in Arkansas know a lot about that. We have seen what happens when 
Medicare+Choice comes in.
  I am concerned that the fallback provision in this bill is not as 
strong as that which was passed in the Senate bill because it allows 
one prescription plan and one integrated plan to provide the drug 
benefit instead of two prescription plans.
  I intend to work with my colleagues to fix this flaw before the drug 
benefit is enacted. I am glad that the conference agreement requires a 
national fallback contract, so that the Government fallback will always 
be there when necessary.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. GRASSLEY. I yield the Senator 1 additional minute.
  The PRESIDING OFFICER. The Senator is recognized for 1 additional 
minute.
  Mrs. LINCOLN. I thank the Senator from Iowa.
  Mr. President, I have a lot more to say, and I hope I will have an 
opportunity to do it at some point.
  I think the most important point to be made today is to talk about 
those who will be served. Over 170,700 beneficiaries in Arkansas will 
pay no premium for their prescription drug coverage and a nominal copay 
of no more than $2 for generic drugs and $5 for brand name drugs. They 
also will not have a gap in their drug coverage.
  We are addressing some of the neediest individuals in our country at 
this juncture. Over 40,200 additional seniors in Arkansas will qualify 
for reduced premiums, lower deductibles and coinsurance, and no gaps in 
their drug coverage. All told, over 40 percent--over 40 percent--of 
Medicare beneficiaries in Arkansas will receive the much-needed special 
help.
  This low-income assistance is of special importance to Arkansas' 
older women. Medicare seniors are disproportionately women and 
disproportionately poor, and will be served well by this special 
assistance.
  There is much I would have done to strengthen the low-income 
provisions, such as not having an assets test for everyone and ensuring 
that Medicare could wrap around the cost-sharing requirements in the 
Medicare bill and that Medicaid could pay for prescription drugs not on 
the private plan's formulary.
  I fought to include a new benefit providing screening for diabetes. 
The new diabetes screening benefit will help with the fact that 
approximately one third of the 7 million seniors with diabetes--or 2.3 
million people--are undiagnosed.
  They simply do not know that they have this very serious condition--a 
condition whose complications include heart disease, stroke, vision 
loss and blindness, amputations, and kidney disease.
  This bill takes a number of steps to protect seniors' access to 
community pharmacies.
  I worked hard to ensure that private PBMs must disclose any price 
concessions made available by manufacturers, that the Secretary of 
Health and Human Services has the authority to audit the financial 
statements and records of plans to ensure that they are complying with 
these disclosure requirements, and that the Federal Trade Commission 
study whether the PBMs that own their own mail order pharmacies have 
created higher drug prices for consumers.
  In addition, private plans must allow any willing pharmacist to be a 
provider under its plan. And for the first time, local pharmacists will 
be allowed to offer 90-day prescriptions just like mail-order 
pharmacists.
  These provisions are vital to rural hospitals, physicians, ambulance 
providers, home health providers, and rural health clinics in Arkansas. 
I have worked with my colleagues for a number of years on these 
provisions, and long-sought rural equity is finally achieved.
  This bill also contains several good additions to the traditional 
Medicare Program that seeks to improve the health and well-being of 
seniors.
  Among the provisions that I fought to include is my demonstration 
program on chronic care management that will help determine the healthy 
outcomes that result when a geriatrician is paid appropriately for 
caring for a patient with multiple chronic conditions.
  I also fought to include coverage for insulin syringes. Roughly 40 
percent of the senior population with diabetes--or 1.8 million 
seniors--use syringes to inject insulin into their bodies to control 
their diabetes every day.
  Without coverage, syringe purchases--which can be especially 
expensive for seniors on fixed incomes--would not count towards cost-
sharing and yearly maximum out-of-pocket expenses.
  The low-income assistance in the Senate bill was much more generous. 
It helped 3 million more seniors. And I pledge to these seniors that I 
will continue to work on strengthening these provisions in the future.
  I am pleased that the conference agreement provides financial 
incentives for employers to continue offering prescription drug 
coverage for their retirees.
  I have received many calls this week from constituents who want to 
ensure they don't lose the health coverage they worked for their entire 
lives. It is frustrating that employers are already dropping retiree 
health coverage.
  So I am glad this bill provides tax incentives to employers and 
unions so they don't drop drug coverage. Employer groups have told me 
that this bill will actually encourage them to retain rather than drop 
coverage in the future.
  This bill also creates the most comprehensive rural package we've 
seen in years. By significantly decreasing or eliminating the 
disparities in Medicare payments that exist between rural and urban 
health care providers, seniors in rural areas will have better access 
to the care they need.
  To conclude, we must seize this opportunity before it is too late. 
This is not the bill I would have written, but it is a step forward.
  Yesterday, I talked with Cecil Malone, the president of the Arkansas 
AARP. We both agree that this moment must not be wasted. We must act 
now to get a benefit started. Once it is there, it can only get better.
  I promise the seniors of Arkansas that I will work day in and day out 
to make this prescription drug plan better.
  I will also work to preserve and protect the Medicare Program so it 
can continue to be a safety net for all those who are uninsurable in 
the private market--millions of seniors, individuals with disabilities, 
and people with kidney failure.
  The Medicare Program has prevented these most vulnerable individuals 
from being uninsured. We must remember the Medicare Program's origins 
and mission as we proceed--and do no harm to it.
  Finally, Mr. President, I thank Finance Chairman Grassley, Ranking 
Member Baucus, Senator Breaux, and the members of their staffs who 
worked so hard over the last several months to bring us to this 
historical moment.
  This bill also ensures that seniors have convenient access to 
pharmacies

[[Page S15683]]

by adopting the same standard that TRICARE uses to determine access.
  The bill also includes my provision to waive temporarily the late 
enrollment penalty for military retirees and their spouses who sign up 
for Medicare Part B and to permit year-round enrollment so that 
retirees can access the new benefits immediately.
  I am glad that this bill takes some steps to contain the skyrocketing 
price of prescription drugs. One provision in the bill would help bring 
generic drugs to the market faster, and another provision would give 
the Government authority to create a system for the importation of 
drugs from Canada by pharmacists, wholesalers, and individuals once 
safety standards are met.
  I have long supported drug reimportation but both the Clinton and 
Bush administrations have refused to implement drug reimportation 
authorized by Congress, citing concerns about drug safety.
  I am glad this bill directs the Secretary of Health and Human 
Services to conduct a comprehensive study that identifies current 
problems with implementing the current reimportation law we already 
have on the books so Congress can enact a law that will allow 
reimportation to go forward.
  Mr. President, there is a lot to be talked about here. I hope we will 
continue to work together to improve upon the shortcomings in this 
legislation as we work to see it implemented to make it a better 
program for current and future beneficiaries of the Medicare Program.
  The PRESIDING OFFICER. The Senator from Connecticut.
  Mr. LIEBERMAN. I thank the Chair.
  Mr. President, this could and should be a day of common purpose, a 
day in which we are united, not divided, behind a vital and big goal; 
that is, giving senior Americans, who have worked their whole lives, 
access to the prescription drugs they need to stay alive and well. This 
is a promise that Presidents and Members of Congress of both parties 
have made and failed to keep for years and years and years.
  Since the vast majority of us agree on the outlines of a solution, we 
had the opportunity, and I believe the responsibility, to finally make 
good on those years of rhetoric and deliver a solid and sensible 
prescription drug benefit plan under Medicare.
  Instead, this President and this Congress have rushed into this 
opening and have stuffed what was once a decent bill--the one that 
passed the Senate overwhelmingly earlier in the year--with 
irresponsible and hurtful ideas that, rather than strengthening 
Medicare, weaken it and that, rather than just offering prescription 
drug benefits to millions of seniors who need it, reduce the benefits 
that millions of seniors have today. It has given with one hand and 
taken with another.
  So instead of being a day of common purpose, which we had here on the 
Senate floor when we passed a prescription drug benefit bill just a few 
months ago, this is a day of all too common partisan politics, 
ideological politics that has divided this Congress, diminished this 
Government, degraded our democracy, and, ultimately, disserves our 
people. It did not need to be this way.
  Everybody knows what the problem is, and just about everybody agrees 
that it is serious. We live in the wealthiest and most advanced country 
in the world. Yet millions of our seniors have a health care plan that 
excludes what is now an essential component of modern medical 
treatment; that is, prescription drug benefits. It is a little like 
having a car warranty that covers everything but the engine.
  America can do better. That is why I supported the landmark bill that 
overwhelmingly passed the Senate in July. Thanks to bipartisan 
leadership, we crafted a compromise that could have made a good 
downpayment for America's elderly. It was not perfect, but it was a 
good head start, a good start forward. Not everyone in my party 
supported that agreement. But I believed, despite its flaws, it was a 
necessary and worthy first step.
  But a funny thing--or, rather, a bad thing--happened to that bill on 
the way to the conference. That solid, bipartisan bill was taken over 
by ideologues and others determined to stuff it full of pet, partisan 
projects that really end up hurting millions of seniors, lessening the 
coverage they have now, and threatening Medicare.
  Unfortunately, the special interests were in the room and too many of 
our Democratic colleagues were out of the room. They used this bill as 
a vehicle for pushing into law a long list of things that had nothing 
to do with the basic goal, which was to provide prescription drug 
benefits under Medicare. In fact, this bill takes us two steps back for 
every one step forward. That is why I am opposing it.
  Has the tone in Washington changed? Well, it has. It is more bitter 
than ever, more self-serving than ever, less constructive than ever. 
And I am afraid no simple prescription can cure the tone I am talking 
about; only real bipartisan leadership can.

  As one who supported the original Senate version of the bill, I am 
not only disappointed at this outcome, I must say I am furious at it, 
furious because millions of seniors, desperate for the relief, have 
found their plight exploited, not alleviated.
  I did not rush to this judgment. I wanted to support a solution. When 
the outlines of the bill began to emerge last week, I saw some 
provisions that I liked and some that troubled me. I wanted to fix 
them. I spoke to people on both sides. I made suggestions to the 
conferees about changes that might be made. But no changes were made. 
So, ultimately, I have no choice but to oppose this bill.
  Let me just cite briefly some of the most significant provisions that 
I believe are wrong with the bill.
  First, it would make millions of low-income seniors pay more for the 
drugs they are currently getting under Medicaid and give them a more 
narrow choice of drugs that will be covered. So it takes billions, in 
the so-called wraparound coverage that Medicaid would provide, from 
seniors for their drug benefits and gives those billions to HMOs to 
subsidize them as they move toward privatization of Medicare.
  Second, it includes up to $16 billion in cuts for cancer care. Let me 
repeat that: $16 billion in cuts for cancer care. I have been hearing 
for months now from cancer patients and oncologists, cancer doctors, 
worried that this exactly might happen.
  Third, it will spend billions of dollars by expressly prohibiting the 
Federal Government from negotiating the best possible price for 
prescription drugs.
  Fourth, driven only--I would say primarily--by ideology, but because 
it is against all the evidence of what works, this bill will commit us 
to an overpriced version of privatized Medicare that would actually 
drive up costs for taxpayers, not lower them, and jeopardize the 
stability of the Medicare Program, which is one of the best programs 
the Government has provided seniors in America in the last century.
  The fact is, Medicare as we know it is more efficient, more 
affordable, than the privatized version that is part of this bill.
  In recent years, here are the facts: Costs per covered person have 
risen almost 10 percent for private insurers providing Medicare 
coverage or the Medicare substitute while Medicare has been able to 
limit those increases in costs to just over 4 percent. That means 
Medicare has been twice as good at holding down costs as the private 
insurance substitute. So why are we subsidizing, at greater cost, that 
alternative?
  The array of people opposing this bill is broad. One group is the 
Democratic Leadership Council, sort of ``mother church'' of the 
moderate Democrats. The DLC referred to this bill as ``Medimess.''
  Two points I want to make briefly. It says the bill misses a chance 
to reform the medical payment system to focus it on paying for quality 
care, not just care for our seniors. And, second, given limited funds, 
the DLC argues that the bill should have targeted and exclusively done 
this for the lowest income seniors and those seniors with the highest 
drug costs. Unfortunately, it did a lot more than that.
  I have been moved in recent days by the complaints from cancer 
patients and AIDS patients and their families and advocates and 
psychiatric patients and their families and advocates who are convinced 
that the restricted list of drugs covered by Medicare, the so-called 
formulary--restricted as compared to what they are receiving now under 
Medicaid or under their retirement plans--will limit, ultimately, the 
lifespan of themselves or their loved ones.

[[Page S15684]]

  The American people know, as I have heard their calls, that something 
is wrong with the bill that promises instant relief but does not help a 
single senior really until 2006.
  Would you buy a drug with that kind of lag time? In fairness, there 
is at least one good thing to say about that delay. It means that when 
another President comes to occupy the Oval Office early in 2005, he can 
set about fixing the bill, if it passes before it goes into effect.
  The proponents of this Medicare prescription drug bill have, in my 
opinion, tampered with America's seniors.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. LIEBERMAN. I ask unanimous consent for the 1 minute that Senator 
Dodd did not use. He delegated me to have that minute.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LIEBERMAN. Proponents of this prescription drug bill have 
tampered with America's seniors. They have broken the seal on the 
compromise we had reached over the summer, emptied the contents of the 
legislative bottle, slipped in what I believe are a couple of poison 
pills, and put it back on the shelf for us to buy. America's seniors 
are not buying it. They know what is in the bottle. We shouldn't buy it 
either. I cannot and will not vote for this bill. I urge my colleagues 
to do the same.
  I yield the floor.


               The Medicare Prescription Drug Legislation

  Mr. FEINGOLD. Mr. President, I cannot, in good conscience, vote for 
cloture and I intend to vote against this bill. With reservation, I 
voted in the favor of the Senate Medicare prescription drug bill. I 
felt the Senate bill, though flawed, brought us closer to offering 
seniors the universal prescription drug benefit that they needed and 
deserved. My hope was that the problems in the bill could be fixed in 
conference. The bill that has emerged from the House-Senate conference, 
however, does too much harm to the overall Medicare program.
  We need to modernize Medicare by providing beneficiaries with a 
prescription drug benefit. But just because we need a bill creating a 
Medicare prescription drug benefit, does not mean we need this bill. I 
believe that this bill provides little help for Medicare beneficiaries 
and takes too many risks with the overall Medicare program, and I am 
not willing to take those risks.
  One of the things that I am most concerned about with respect to this 
bill is the lack of true cost containment. If we are to ensure that 
Medicare remains solvent in the years to come, especially after adding 
a new $400 billion prescription drug benefit, we need to make sure that 
we take strong measures to keep the cost of Medicare down. This is 
especially important given the number of baby-boomers who will soon be 
enrolling in Medicare. Although this bill came in under the budgeted 
$400 billion, because it fails to make any real effort to bring down 
the skyrocketing prices of prescription drugs, the true cost of this 
bill is likely to surpass what has been budgeted for it. This is 
fiscally irresponsible, and we cannot put Medicare in financial 
jeopardy by ignoring the impact of rising health care costs on the 
overall Medicare program.
  I am also greatly concerned by the efforts included in this bill to 
make Medicare a private, managed care program. This bill includes $12 
billion in additional subsidies to encourage private insurance 
companies to offer managed care plans under Medicare. The bill also 
includes a demonstration project, which could affect up to 25 percent 
of Medicare beneficiaries, that may cause them to pay more in premiums, 
should they decide to stay in traditional Medicare. Those who cannot 
afford these higher premiums will be forced to choose a private plan, 
which may limit their access and choice of doctors and other providers. 
Seniors should not be forced to enroll in private plans simply because 
they cannot pay more to stay in traditional Medicare.
  One of my greatest concerns is how this bill will impact 
Wisconsinites. While providing, at best, a minimal prescription drug 
benefit for some, the bill will make others worse off than they 
currently are. It is estimated that, because of this bill, 60,000 
retirees in Wisconsin will lose the health insurance they currently 
have from their employers. Over 110,000 of poor, disabled or elderly 
Wisconsinites who currently pay nothing for their prescription drugs 
will now face increased payments for their prescription drugs because 
of this bill. This bill will also drive up costs for the State, in a 
time of fiscal crisis, because Wisconsin will lose its ability to 
negotiate drug costs and will face increased administrative costs.
  There are some who will benefit because of this bill. Due to 
subsidies, the tilted playing field toward private insurance plans, and 
the lack of any cost containment on prescription drug prices, this bill 
will be a windfall for pharmaceutical and insurance companies. All we 
have to do is take a look at how the stocks of pharmaceutical companies 
and insurance companies soared recently in response to this bill. While 
these selected industries will profit, however, retirees and many low-
income Medicare beneficiaries will suffer.
  I am truly disappointed that I cannot support this bill, because 
there are some good things about it. I am pleased that the provisions 
that will bring us closer to having fairness in the Medicare 
reimbursement system were included in the final conference report. I 
have fought for a fairer share of Medicare dollars for states like 
Wisconsin for years. I am proud to have authored the amendment that 
passed in the Budget Committee earlier this year, which helped make the 
inclusion of Medicare fairness provisions in this bill possible. These 
particular provisions will help reduce the gross inequity in the 
division of Medicare dollars across the country.
  But, on balance, I cannot vote for this bill because of the negative 
impact it will have on the Medicare program. The harm this bill does to 
Medicare and those who depend on it outweighs the benefits. Instead of 
working to privatize Medicare, Congress needs to go back to the drawing 
board and create a real Medicare prescription drug benefit without 
undermining the Medicare system itself.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I yield 6 minutes to Senator Breaux.
  The PRESIDING OFFICER. The Senator is recognized for 6 minutes.
  Mr. BREAUX. Mr. President, I thank the chairman of the committee.
  We have now come to the time of decision with regard to whether we 
are going to have the capacity to, in fact, reach a compromise on one 
of the great issues of the day; that is, whether the Congress has the 
political courage and political will to set aside partisan differences 
and to allow both sides to come together and reach agreement. We can 
argue about which party benefits from a Medicare reform bill and which 
party will suffer, but the real issue is not whether the Democratic 
Party or the Republican Party wins or whether the President gets to 
sign a bill that reforms Medicare in the Rose Garden. The real question 
before this institution on both sides of the aisle should be whether 
for once we can come together and craft a piece of legislation that 
creates a program that is substantially better than the 40 million 
seniors currently have under Medicare.
  When Medicare was created in 1965, it was bipartisan. It was a 
change. Some say we should not change Medicare. I would argue that 
Democrats have never feared change. In 1935, when we wrote the Social 
Security Program under Franklin Roosevelt's leadership, Democrats 
changed the status quo. When we led in 1965 the effort to provide 
medical assistance for our Nation's seniors, we challenged the status 
quo. We stood up for change and created a new program. Today, over 38 
years later, we have the opportunity to once again change a program 
which has served seniors well but not nearly as well as they deserve. 
Democrats should not fear that type of change.
  Medicare today, on average, does not cover 47 percent of the average 
senior's health care costs in this country. Not one of us in this 
institution--our employees, Members of Congress--has health care 
insurance that is that deficient in what it does not cover. Forty-seven 
percent of those costs have to be borne by the senior citizen 
individually or, if they do not have enough money, by their children or 
their grandchildren or, if they become so poor,

[[Page S15685]]

they are put into the State Medicare Program for the poorest of the 
poor. That is unacceptable. That is not in keeping with the greatness 
of this Nation, to have a health care program for seniors that is that 
deficient.
  This institution cannot let the perfect be the enemy of the good. 
This bill is not perfect, but this bill is good. We cannot let 
political pundits on both sides of the aisle who try to dictate what 
our choices are say, well, let's pass a Republican-only bill so that we 
can blame the failure of its passing on the Democrats. Neither can we 
allow Democratic political pundits to say to us we should not pass this 
bill for the reason that it would allow the President of the United 
States to sign it in the Rose Garden and that would be a political 
benefit for him.
  If we cannot take good legislation and pass it and both claim credit 
for it, then, quite frankly, we should be doing something else. Good 
government is good politics. This is good government. This is a good 
bill.
  There are two different approaches to solving health care. Some of my 
friends on the Republican side would say: The Government should have 
nothing to do with it. The private sector should do everything, keep 
the Government out of it, and we can design a program with the free 
enterprise system that will work just fine.
  Unfortunately, there are some on my side who would say: No, the 
Government has to do everything. Government would have to do it all. 
The private sector cannot be involved at all.

  Both of those approaches are incorrect. The best way to solve health 
care problems is to do what this bill does; that is, to combine the 
best of what government can do with the best of what the private sector 
can do and come up with legislation that says: Yes, the Federal 
Government can supervise it but not micromanage it. Yes, the Federal 
Government can help pay for it through the tax system--and this bill 
does that--but the private sector needs to be involved as well. The 
private sector can bring about innovation. They can come up with new 
ideas and new concepts faster than we can in the Congress and in the 
Federal bureaucracies here in Washington. The private sector can bring 
about a degree of competition which is sorely lacking under the current 
micromanaged system with 133,000 pages of rules and regulations. That 
does not allow innovation or competition. That is one of the reasons 
the program as we know it today, as good as it is, can be made a lot 
better.
  The issue for our Nation's seniors is not just living longer lives; 
it is also about living better lives. For the first time, seniors will 
know that when they need prescription drugs, they will be available. 
Four hundred billion dollars will set up a structure where they will 
have insurance that covers prescription drugs, just as in 1965 when we 
made changes that said the Federal Government will help provide 
insurance to cover hospitalization, we said that for the first time the 
Federal Government will help with a program that will provide insurance 
coverage for doctors.
  This is a good program. We should not fear change. This is a major 
step in the right direction.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from Maryland.
  Ms. MIKULSKI. Good morning, Mr. President. I ask unanimous consent to 
use such time as necessary to complete my statement.
  The PRESIDING OFFICER. The Senator is recognized for up to 9 minutes.
  Ms. MIKULSKI. Mr. President, this was a day I had always looked 
forward to, a day where the Senate would be voting on a prescription 
drug benefit. I have devoted my life to the advocacy of senior citizens 
and to standing up for ordinary people to make sure they could make 
sure that government was on their side when they needed it, when they 
were at risk. But today I come to this vote with indeed a heavy heart.
  The bill the Senate is voting on today is a hollow promise for a 
prescription drug benefit for seniors. This bill talks big but delivers 
small. It promises prescription drugs to seniors yet it will create a 
skimpy benefit for the middle class, cause 2.7 million seniors who 
already have drug coverage from their employer to lose their coverage, 
set up the stage to force seniors into HMOs which means seniors could 
lose the doctors of their own choosing, provides lavish subsidies to 
insurance companies, creates tax dodges for those making over $250,000, 
while doing absolutely nothing to stop the soaring cost of prescription 
drugs.
  When I voted for a bill in June, it was a modest but genuine 
bipartisan effort. I believed it was a start. For years Congress had 
talked about Medicare. But talk, talk, talk; when all was said and 
done, more got said than got done. And you can't talk your way out of 
diabetes; you need insulin. You can't talk your way out of high 
cholesterol; you need Lipitor. So I thought Congress should move on. 
But when I voted for the bill, I said that was as far as I would go. I 
said when the plan came back, if it helped the insurance companies 
instead of seniors, goodbye to my vote. I said if it increases costs 
for seniors, say goodbye to my vote. And if it limits benefits, say 
goodbye to my vote. On all three of these points, this bill falls and 
fails.
  I am going to say that people who say this is a first step--well, it 
is a step in the wrong direction. If you take the wrong step, you can 
fall flat on your face. Some believe it is the best we can do. I don't 
believe that. I believe we can do better, we can do better now, and we 
can do better next week. We are 45 weeks away from adjourning from this 
Congress. We have 45 weeks to do a bill that will benefit seniors, 
protect seniors, protect the integrity of the Federal budget and be 
able to get the job done.
  Seniors don't do better under this bill. It is skimpy. You have a 
premium of $420 a year, a deductible of $250. You pay $670 a year. When 
I sat and figured it out, you have to spend $1,000 to get $1,000 worth 
of drugs. Let me tell you what bothers me also. When you spend up to a 
drug cost of $2,250, then the Government says the gap between $2,250 
and $5,100--your Government says we cannot afford to help you. That is 
a $2,850 coverage gap. This is while you are going to continue to pay 
your premiums. You keep on buying your drugs. Your Government says it 
cannot help you. While you are paying that premium and paying for your 
drugs, the Government will keep paying those HMOs. This bill leaves too 
many seniors in the coverage gap.
  In my home State, 200,000 people will fall in this coverage gap. Some 
call it a donut. I call it a poison pill.
  I have looked at what it means for those who already have 
prescription drug benefits. I truly believe that 400,000 Marylanders 
will be at risk from losing their private plans--whether it is from a 
Government employer or a private sector employer. I am talking about 
factory workers and teachers. I am talking about secretaries and 
firefighters. This bill could dilute or even destroy these benefits 
over a lifetime.
  Often, workers took these benefits instead of pay raises. They chose 
the promise of a secure health retirement instead of increased pay. I 
am very concerned that they could lose their benefit. Employers are 
already being crushed under the weight of health care costs.
  In 1998, 48 percent had prescription drug benefits, and now only 28 
percent have those employer-sponsored health care coverage. Now, why is 
this a problem also?
  The other very troubling provision in this bill is it has an absolute 
prohibition on allowing the Government to use its buying power to 
negotiate lower prices. This bill does nothing to save money on drug 
costs. In fact, it does the opposite. This bill prohibits the 
Government from negotiating lower prices. Page 54 of this bill--read 
it.
  But, we already do it. I am the ranking member on the VA-HUD 
Appropriations Committee. I know what the VA does. The VA uses its 
buying power to negotiate with drug companies for lower prices. That 
means we get a 25-percent reduction. It is not price control. It 
doesn't shackle innovation. It is good management. By the VA 
negotiating those prices, it is good for the VA to be able to afford to 
provide drugs, and it is good for the veteran to be able to afford to 
buy their drugs. Why can't we do this everywhere?
  I will tell you, while we give these subsidies, while we have the 
skimpy benefit, it provides lavish benefits to insurance companies and 
HMOs; $12 billion in subsidies to private insurance plans to subsidize 
their participation, forcing them into HMOs in the future--$12 billion. 
What is the consequence? It

[[Page S15686]]

means if you are forced into an HMO, you are going to lose your doctor. 
You will get the doctor that a bureaucrat tells you you should have 
rather than the doctor you want to have.
  It also creates tax dodges for those making over $250,000, the so-
called health savings account--another $6 billion, which they should be 
paying taxes on. But oh, no, it is one more gimmick, a tax dodge. If 
you take that $12 billion plus the $6 billion, it would give us $18 
billion to close the coverage gap. Instead, we have tax dodges and 
bonuses to insurance companies rather than a better benefit for the 
seniors.
  I know what some seniors are asking: Barb, why are you going to vote 
against this bill? I need help now. I need a prescription drug coverage 
now.
  Senior citizens in Maryland have told me that they don't even buy 
green bananas. They don't want to wait. I want to ease your worry about 
prescription drug costs. I want to give you something real. For the 
next 2 years, all you are going to get is a 15-percent discount card, 
while insurance companies and HMOs are going to get $12 billion from 
the Government, and there will be this tax dodge for those making over 
$250,000.
  To the seniors of Maryland, I am going to vote against this bill. I 
am not voting against you. I am voting for you so that you have the 
benefit that you need. We have an affordable program for the U.S. 
Government. We can hold our heads up high, but know that when my name 
is called, I am going to vote no on this bill and, yes, that we can do 
it better, and we can do it better tomorrow.
  The PRESIDING OFFICER. The Senator from Nevada is recognized.
  Mr. REID. Mr. President, on our side, I think the time we have 
allocated--we have a little time left, is that true?
  The PRESIDING OFFICER. Forty minutes.
  Mr. REID. I have allocated a lot of that time. I ask unanimous 
consent that Senator Edwards be given 3 minutes under our control.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Who yields time?
  The Senator from Wyoming.
  Mr. THOMAS. I yield 5 minutes to the Senator from Pennsylvania.
  Mr. SANTORUM. Mr. President, I rise in support of this conference 
report. I congratulate all those who have worked hard on it. It is a 
bill on which, I have to admit, I have mixed emotions. There are a lot 
of things in the bill I like and some things that I don't like.
  One of the criticisms I have heard leveled against this bill is that 
it does harm to those who are in the Medicaid population, the very low-
income, under 100 percent of poverty. The interesting thing is that 
some suggested it does harm because we have made people eligible for 
Medicaid now eligible for Medicare. Those are the dual eligibles.
  One of the reasons we are doing so is because there are many on the 
other side of the aisle who wanted dual eligibles to be covered under 
Medicare. The copayment for those dual eligibles is the same as under 
Medicaid. It is $1 for generics and $3 for name brand drugs. That is 
hardly a very high cost for prescription drugs. And there are waivers 
of those copayments for people who are in nursing homes and have other 
sources of coverage. So what we have done is something that many on the 
other side wanted us to do, which is take people out of Medicare and 
put everyone over 65 in one program. That makes some sense, but it is 
an enormous cost to the Federal Government. We are picking up more of 
the cost of Medicaid now and that money out of the drug benefit had to 
come from somewhere.
  So I argue that to accomplish one policy goal, we had to give up some 
subsidies to other seniors. But, clearly, it was a win by many of the 
Democrats who argued--Senator Baucus and others--that they had to have 
all dual eligibles covered. It is something they wanted. We have done 
that. I hope we will understand that the reason some of the money has 
been shifted to lower income was to accomplish what the other side 
wanted to accomplish.
  I also say that, yes, I agree the standard benefit is not the most 
generous benefit out there. But what everybody here agreed to last year 
was $350 billion. This year it was $400 billion. I think everybody 
agreed that $100 billion should be targeted at two groups of people--
lower income individuals and high users of drugs. When you do that, and 
you provide $1 and $3 copays for people over 100 percent of poverty, 
and up to 150 percent of poverty $3 and $5 copays, what you are talking 
about is a very expensive program for low-income individuals.
  Then, at the other end, you have the catastrophic program that picks 
up 95 percent of the cost of drugs after $3,600 is spent out of 
pocket--high users, sick people. We should be helping them with drug 
costs. When you throw those two pots in, there isn't a lot left for the 
standard benefit.
  It was the idea, I think, that everybody here agrees that we need to 
focus the $400 billion on those in most need, whether it is need 
because of sickness or need because of financial condition. This bill 
does that. I would argue, sure, I think all of us would like to provide 
a more generous benefit. You have to remember, the rest of the people 
we are talking about--about 80 percent of them--have prescription drug 
coverage already. What we are allowing is for a lot of those people to 
have the drug coverage they have in addition to this being wrapped 
together to provide a much healthier benefit than just the basic 
benefit provided under this bill.
  Seniors are not going to be just with this plan. In fact, the average 
senior in this country is going to have a much more enhanced plan 
available to them than what they have today as a result of this 
coverage.
  I say to my conservative friends who are expressing concern about 
this bill, the most important thing in this bill, from my perspective, 
for conservatives is this plan allows for health savings accounts. 
Fundamentally, what health savings accounts will do is eventually 
change Medicare--not today, not even 5 or 10 years from now, but over 
the long term, once health savings accounts become what I believe they 
will become, which is the method of choice that the vast majority of 
people in this country will do in the private sector. Health savings 
accounts affect people under 65, the non-Medicare population. This will 
be a very popular plan in which millions of Americans will participate, 
and it will fundamentally change the insurance market in this country.
  One thing we have seen from Medicare reform--if you want to call what 
we have done over the past 40 years Medicare reform--is it follows the 
private sector. A 1965 Blue Cross plan was the original Medicare bill 
because that was the standard state of the art in 1965. In the 
nineties, we changed Medicare to allow for HMOs. Why? Because the 
private sector adopted HMOs. Now we are doing PPOs. Why? Because the 
private sector moved from HMOs to PPOs, and in the future we will move 
to PPOs and health savings accounts in Medicare, and that, I believe, 
will be the long-term salvation of that program.
  The PRESIDING OFFICER (Mr. Enzi). The Senator from Wyoming.
  Mr. THOMAS. Mr. President, my understanding is that the Senator from 
New York will be next. Following that, because we have taken shorter 
times, we will have two speakers in a row--the Senator from Arizona and 
the Senator from Texas.
  Mr. REID. Mr. President, if I may speak briefly, I say through the 
Chair to the senior Senator from New York, we have been taking 
significantly longer than the majority on speeches. They should get two 
speakers to make up for what we have been taking on our side. Senator 
Clinton is next in the order.
  The PRESIDING OFFICER. The Senator from New York.
  Mrs. CLINTON. Mr. President, there are a number of significant issues 
that have been raised in this debate over the last 48 hours. I remind 
our colleagues and our seniors who may be following this debate with 
some interest that we have had this bill--this gigantic bill--for 4 
days.
  This is one of the most significant pieces of legislation that will 
come before this Congress certainly this year, but I would argue for 
many years to come. It is a wolf in sheep's clothing. We remember the 
old fairy tale about the wolf that couldn't get into the hen house or 
into the shepherd's enclosure to try to go after the hens and go after 
the sheep and kept trying and trying.
  Finally, the wolf figured out that a frontal assault was just not 
going to work. People would see the wolf sneaking up on the hen house, 
sneaking up

[[Page S15687]]

behind the sheep, and they would scare them off and try to get him 
before he got the hens and the sheep.
  The wolf got really smart. The wolf found some poor old sheep that 
hadn't quite made it back from the hills and, unfortunately, killed 
that sheep, got that sheepskin, and snuck in. When people saw it moving 
across the ground, they thought: That's just an old sheep.
  Lo and behold, the wolf got to the hen house and the sheep, and that 
poor old farmer didn't have any hens or sheep left by the time the wolf 
got done.
  Make no mistake, that is what is going on here. You can dress it up, 
you can talk about how significant a benefit it is going to turn out to 
be, how we are modernizing and changing Medicare for the 21st century, 
but remember that fairy tale. Fairy tales are rooted in ancient folk 
wisdom and experience, and what we have here is just a classic wolf in 
sheep's clothing.
  There are many reasons to oppose this bill, and my colleagues have 
been going through them one after another. I think the bottom line is, 
No. 1, this bill does very little of what it actually advertises doing. 
It advertises it is going to be a sea change--a positive sea change--
for seniors, and that is not the case.
  We have been fighting over prescription drug benefits for seniors for 
years. A decade ago, when I was working on behalf of the Clinton 
administration with respect to health care, we included a drug benefit. 
Some of you may remember that debate. That debate went down, and it 
went down for many reasons, but one was that it was a 1,300-page bill--
a bill that would guarantee health insurance to every American, a bill 
that would control prices so that we could actually afford health care 
for every American, and people said: Oh, my goodness, that is such a 
long bill; why, look at what the Clintons are trying to do. They are 
trying to change health care with that gigantic bill.
  Remember, we produced that bill with a thousand people involved in 
the process. We vetted it with everybody. We brought it to the Capitol. 
It was done in the light of day. We produced a bill and then, of 
course, all the special interests got everybody confused about what was 
in the bill, and the bill went down even though, as it was going down, 
public opinion surveys were asking Americans: What is it you want in a 
bill?
  They said: We want guaranteed affordable health care coverage and the 
ability to pick our doctor--all of which was in the bill.
  It didn't do me any good to keep saying it because $300 million had 
been spent by the special interests for TV ads, radio ads, and 
newspaper ads--the whole 9 yards. Oh, my goodness, the bill was so big 
and so confusing and all these terrible things were going to happen.
  Four days ago--4 days ago--we got this bill. I am looking through 
this bill trying to figure out, my goodness, how long it is. I know it 
is awfully heavy. I think it is about 1,200 pages. That is just to do 
something to Medicare. It is not to guarantee health insurance for 
children and working people. It is not to guarantee health insurance 
for people 55 to 65, who retired and who start, as you do when you get 
to 55, to have health kinks and problems and are not eligible for 
Medicare. It doesn't do anything for that.
  It is a 1,200-page bill which we received 4 days ago, and I can 
guarantee you there are disputes on the floor of the Senate as to what 
is in it and what it means. Why is that? Because we haven't had a 
chance to examine and analyze it, and if we haven't, with our staff and 
our efforts over the last 4 days, I know the American people, 
particularly our seniors, haven't either.
  There are many provisions in this bill that really need to be brought 
into the light of day. I will be voting against cloture, which is a 
parliamentary term to try to cut off debate, because I don't think we 
have had enough debate yet. I don't want anybody being surprised about 
what is really in this bill because there are going to be a lot of 
surprises.
  The promise of reimporting drugs from Canada--which is really 
important in a place such as New York because we border Canada. A lot 
of my seniors from Watertown, Massena, or Plattsburgh go across the 
border and get those cheaper drugs. In this bill, that is going to 
continue to be a problem and a prohibition in reality, if not legally, 
because drug companies are going to be given the go-ahead to basically 
violate antitrust rules so they can cut back on the amount of drugs 
they send to Canada.
  I don't blame the drug companies. They have a captive market in our 
country. Our tax dollars do the research at our great universities and 
research labs. Our tax dollars support the National Institutes of 
Health. Our tax dollars create the conditions in which drugs are given 
clinical trials to determine whether they help or hurt. We do all the 
work for the entire world for determining the efficacy of drugs, 
quality, and safety, and then other countries, such as Canada, Europe, 
and other places, bargain with the drug companies.
  They say, OK, we have a big market. We have millions of people. It is 
kind of like Sam's Club, only think of it as the Canadian club or the 
European Union club. They bargain with these drug companies and they 
drive the prices down because they are going to buy in volume.
  Should we not have an Uncle Sam's Club? Should not Uncle Sam be able 
to bargain with these drug companies? Apparently that is not what the 
backroom negotiators and writers of this legislation wanted because in 
the most wonderful example of Orwellian language, on page 53 of this 
bill, under a title called noninterference--I love that--it says in 
order to promote competition--there are magic words around here. It is 
said that competition is going to be promoted, while they create a 
monopoly, while they end antitrust, because they are setting up all 
kinds of special privileges for special interests. Nevertheless, we 
just hope nobody notices that.
  So in order to promote competition under this part and in carrying 
out this part, the Secretary, No. 1, may not interfere with the 
negotiations between drug manufacturers and pharmacies and PDP 
sponsors--those are drug plans--and may not require a particular 
formulary--that is the list of the drugs one can get--or institute a 
price structure for the reimbursement of covered drugs.
  Basically, what this means is the lid is off. Not only can we not get 
the drugs from Canada anymore because our drug companies will say to 
the poor Canadians, keep letting your pharmacists send them across the 
border and we are going to not send the drugs for the Canadian people. 
But we cannot even bargain. We cannot have an Uncle Sam's Club. We 
cannot get the volume discounts.
  We have to look at who is doing what in this debate to figure out 
where the sheep are, where the hens are, and where the wolves are. One 
of the biggest wolves who has been after Medicare for as long as he has 
been in public life is our old friend, Newt Gingrich, former Speaker of 
the House, when he called for Medicare to wither on the vine.
  Well, guess who showed up to try to whip those House Republicans in 
line to vote for this bill, which is why they had to leave the vote 
open for more than 3 hours, the longest time they had ever had to leave 
a vote open because basically, there was the wolf in sheep's clothing 
going up to the House Republicans and saying: Do not worry, we are 
going to say all of these good things about this bill, but just wait 
until we get our hands on it; just wait until we get into that hen 
house.
  I do not blame them if that is what they believe. Nevertheless, we 
are the ones who are going to be paying the price.
  I ask unanimous consent for an additional 2 minutes.
  The PRESIDING OFFICER. That will be 2 minutes off the Democratic 
side. Since there is no one from the Democratic side objecting, it is 
so ordered.
  Mrs. CLINTON. I will put a chart up that gives a short summary for 
any American, and particularly for any senior citizen, watching. This 
bill sacrifices seniors' interest to special interests.
  Seniors need lower drug prices. Forget it. The drug industry wants 
higher profits.
  Seniors need predictable premiums. Forget it. Managed care wants the 
flexibility to raise their rates even in the middle of the year.

[[Page S15688]]

  Seniors need a choice of drugs. Forget it. The drug industry wants a 
restrictive formulary that pushes their brands.
  Seniors need to keep their retirement benefits. Forget it. The 
private plans want a $12 billion slush fund so we are going to lose 
retiree health care.
  Seniors want to stay in Medicare. Forget it because what is going to 
happen is that Medicare is going to get increasingly the health care 
plan for the sickest and the oldest of our seniors, which will make it 
more expensive. In this bill we are going to even see a constriction on 
the nondrug benefits for Medicare.
  So one has to really watch what goes on around here. They have to 
follow it carefully. This is a bill that is bad for seniors, bad for 
America, and I hope my colleagues will stand against it.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. I yield 5 minutes to the Senator from Arizona.
  The PRESIDING OFFICER. The Senator from Arizona.
  Mr. McCAIN. Mr. President, we have before us a conference report that 
represents one of the biggest expansions of the Medicare entitlement 
program and offers enormous profits and protections for a few of the 
country's most powerful interest groups, paid for with the borrowed 
money of American taxpayers for generations and generations to come.
  This legislation reminds me of the ancient medieval practice of 
leeching. Every special interest in Washington is attaching itself to 
this legislation and sucking Medicare dry.
  We do not need leeching. What we need is reform. On top of the 
existing $7 trillion accumulated deficit, which translates into $24,000 
for every man, woman, and child in the United States, this year's 
current deficit is quickly approaching a half trillion dollars. Adding 
a new unfunded entitlement to a system that is already financially 
insolvent is so grossly irresponsible that it ought to outrage every 
fiscal conservative.
  According to the Congressional Budget Office, this package is 
estimated to cost just over $400 billion over 10 years. If one believes 
that is the maximum we will spend over 10 years, I have some beach 
front property in Gila Bend to sell you. Four hundred billion dollars 
is merely a down payment.
  One important number not frequently mentioned is the estimated 
increase this new package will add to existing liabilities. The Office 
of Management and Budget estimated that current unfunded liabilities of 
Medicare and Social Security are $18 trillion. That is the current 
unfunded liabilities. What is absolutely astounding is that this new 
benefit will add an estimated $7 trillion in additional unfunded 
liabilities. By the year 2020 Social Security and Medicare, with a 
prescription drug benefit, will consume an estimated 21 percent of 
income taxes for every working American.
  I think we ought to be honest with the American people. Passing this 
package without implementing the necessary reforms to ensure that the 
Medicare system is solvent over the long term is rearranging the deck 
chairs on the Titanic. There is no one in America who is reliable who 
will not say that the Medicare system is going to go broke. The 
question is not if. The question is when, not what.
  To save this system we should enact true free market reforms and 
bring Medicare into the 21st century. Unfortunately, the minor reforms 
in this bill do not even begin to offset the burden added by the new 
drug benefit. With future generations of American taxpayers funding the 
purchase of prescription drugs under Medicare, we have an obligation to 
ensure some amount of cost containment against the skyrocketing costs 
of prescription drugs. Unfortunately, however, this package explicitly 
prohibits Medicare from using purchasing power to negotiate lower 
prices with manufacturers.
  How is that possible? The Veterans' Administration, the VA, and State 
Medicaid Programs use market share to negotiate substantial discounts. 
It is prohibited in this bill. The taxpayers should be able to expect 
Medicare, as a large purchaser of prescription drugs, to be able to 
derive some discount from its new market share. Instead, taxpayers will 
provide an estimated $9 billion a year in increased profits to the 
pharmaceutical industry.

  Prescription drug importation is another lost opportunity for cost 
containment. American consumers pay some of the highest prices in the 
developed world for prescription drugs and, as a result, millions of 
our citizens travel across our borders each year to purchase these 
prescriptions. In all, Americans spend hundreds of millions of dollars 
on imported pharmaceuticals, not because they do not want to buy 
American but because they cannot afford to.
  This conference report contains language on drug importation. 
However, it has been successfully weakened to the point of guaranteeing 
that implementation will never take place.
  There is a good provision as far as generic drugs are concerned, but 
this package is not only a bad deal for American taxpayers, I believe 
seniors will also find it not worth the price.
  Although this conference report allocates close to $80 billion in 
subsidies to corporations to encourage them not to drop or reduce 
benefits, the CBO estimates that approximately 20 percent of seniors 
will lose their current employer-sponsored coverage.
  I am concerned we are about to repeat an enormous mistake. I was here 
when we enacted Medicare catastrophic in 1988, and I was here 1 year 
later fighting to repeal it. We cannot let political shortsightedness 
blind us from the long-term fiscal implications of this package.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. I yield 5 minutes to the Senator from Texas.
  Mrs. HUTCHISON. Mr. President, I ask unanimous consent that I be told 
in 3 minutes because I intend to leave 2 extra minutes to the Senator 
from Utah.
  The PRESIDING OFFICER. Three minutes remaining or use 3 minutes?
  Mrs. HUTCHISON. After I use 3 minutes. Thank you.
  Mr. President, while the medical community has ridden the 
technological wave of the future, pushing the envelope in research into 
new pharmaceuticals, treatments and life-saving measures, Medicare has 
been stuck floundering in the 20th century. The venerable program, 
designed to provide healthcare for the elderly and the disabled, has 
failed to meet all of the needs of those it set out to serve.
  After years of talk, Congress is poised to enact the most sweeping 
change for America's seniors in nearly 40 years. We have the 
opportunity to bring Medicare up-to-date and take advantage of the 
incredible advances in prescription drugs.
  Pharmaceuticals are one of the miracles of modern medicine. Ailments 
that traditionally required an expensive in-patient hospital stay and 
invasion surgery can now be treated with medication. But most Medicare 
recipients wouldn't know it. While the government pays for costly heart 
surgery, it currently will not pay for the preventative drugs that may 
have precluded the need for an operate in the first place.
  An estimated 9.9 million Medicare beneficiaries do not have private 
prescription drug coverage, almost 600,000 in Texas alone. Some seniors 
who could lower their cholesterol by ingesting a simple pill like 
Lipitor have to pay out their pockets for the drug which retails at 
$108 per bottle, placing this simple solution out of their reach.
  The bill before Congress would give America's seniors access to a 
prescription drug benefit for the first time. Beneficiaries would pay a 
$35 monthly premium and a $250 deductible, after which they would pay 
25 percent of drug costs between $275 and $2,250 and 100 percent 
between $2,250 and $3,600. Costs over that threshold would require an 
average copay of $2 for generic drugs and $5 for brand name drugs, or 5 
percent of the total drug cost depending on the plan.
  Until these reforms are in place, a prescription drug discount card 
offering savings of up to 25 percent will be available in 2004, 
providing some relief immediately.
  This measure also offers additional and unprecedented assistance to 
those with low incomes. Medicare beneficiaries at the poverty level and 
below will pay no premiums or deductibles and will have nominal cost 
sharing responsibility, with copays of $1 for generic drugs and $3 for 
other pharmaceuticals. Those at 135 percent of the poverty level, or 
$12,123 annually for

[[Page S15689]]

individuals, will not pay premiums or deductibles and will have co-
payments of no more than $5. Beneficiaries at 150 percent of the 
poverty level, or $13,470 annually, will have a sliding scale subsidy 
for premiums, a $50 deductible and $2 and $5 co-pays. These changes 
will mean more than 680,000 low-income Texans will pay no more than $5 
per prescription. Furthermore, with the Federal Government providing 
drug coverage for those individuals who qualify for both Medicare and 
Medicaid, my State will save $1.7 billion over an eight-year period.
  Though much of the attention surrounding Medicare reform has focused 
on the prescription drug benefit, there are a number of other elements 
that are important. In the end, the legislation is a good compromise 
and addresses the fundamental problems.
   One significant element is choice. This plan provides access to a 
broad array of healthcare options, similar to what most working 
Americans already enjoy. Seniors can stay in traditional Medicare, add 
a prescription drug plan or choose an HMO or PPO that includes a 
prescription drug plan. Unlike the current Medicare+Choice plans, which 
have been pulling out of communities, the bill guarantees all seniors 
will have access to an HMO or PPO plan.
   It also has provisions to encourage companies currently providing 
healthcare to their retirees to continue offering this important 
benefit.
   Another important component of the bill is an increase in the 
reimbursement rate for physicians, many of whom have stopped taking on 
new Medicare patients. Physicians were facing a cut in March of 2004 
and another in 2005, but this legislation not only stops the 
reductions, it gives physicians an additional 1.5 percent 
reimbursement.
   Hospitals that treat a large number of illegal immigrants will 
receive some compensation for their services--a provision important for 
Texas hospitals and other providers.
   Another advantage that will benefit the general population, not just 
those within Medicare, is the creation of Health Savings Accounts, 
which will allow individuals and families to put tax-free money into an 
investment-type account dedicated to their medical costs. The money is 
not taxed when withdrawn for qualified medical expenses, giving 
Americans another tool to cover healthcare costs, such as deductibles 
and co-payments.
   As with any compromise, the bill is not everything I would want. I 
advocated larger teaching hospital reimbursement levels, and although 
the percentage is not as high as I proposed, in 2004 it increases the 
current reimbursement rate, from 5.5 percent to 6 percent in April and 
then to 5.8 percent in October, but it is still higher than the current 
rate.
   This increase means almost $13 million to Texas' teaching hospitals. 
Every State has at least one teaching hospital, with 1100 of the 
facilities nationwide. Teaching hospitals train nearly 100,000 
physicians, and the Federal Government has traditionally recognized the 
higher costs inherent in training and educating those health care 
providers. They utilize newer technology and provide more indigent 
care. This increase will provide some much-needed assistance to our 
financially strapped rural and teaching hospitals.
   Let me be clear: this bill is not perfect, but as AARP President 
James Parkel said this week, ``Millions of Americans cannot wait for 
perfect. They need help now.''
   After years of talk, we are taking the first step to bring this 
vital program up-to-date. For the first time, we can provide a 
voluntary prescription drug benefit that offers additional assistance 
for those who need it most and strengthen Medicare for future 
generations.
  I know my 3 minutes are up. I would like to add 2 minutes to Senator 
Hatch's 5 minutes with that added 2 minutes. I urge my colleagues to 
support this major first step.
  The PRESIDING OFFICER. Who yields time?
  Mr. THOMAS. Under our agreement, we will slip over to that side and 
then Senator Hatch will be next.
  The PRESIDING OFFICER. The Senator from Michigan.
  Ms. STABENOW. Mr. President, without objection, I yield myself 5 
minutes from the time of those in opposition.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. STABENOW. Mr. President, we have a very important vote coming up 
shortly on whether or not to proceed with the bill or to continue 
working, whether or not to stop our efforts to continue to try to 
improve this bill or to begin the clock to a final vote. Many 
colleagues have pointed out that this is the bill--this is the bill. 
The bottom line of all of this paperwork is that it does not take 
effect, in terms of prescription drug coverage for seniors, until 2006. 
So this is the bill we are asking for time to thoroughly go through, 
line by line, and to be able to fix what does not work for our seniors.
  We are being told we have to rush this; this is the last time we are 
going to be able to do it; we don't have any more time to be able to 
put this together. Yet the bottom line of all this, for seniors' 
prescription drug help, if there is any in here--and there is a 
little--doesn't even start until 2006.
  I am going to be voting against the effort to stop debate and move to 
a final vote because I believe we need to take the time to get it 
right. I believe there are critical issues we need to fix.
  Let me first say a positive aspect in all of this is important 
efforts to help our rural providers, our doctors and hospitals, home 
health agencies, and nursing homes. On Saturday I put forward a bill 
that would actually pull out those positive provisions that are 
critical for our providers, to vote separately on that. I believe we 
would have, if not unanimous, overwhelming bipartisan support for those 
efforts that help our providers.
  While I do not believe this bill, on balance, is good at all for our 
seniors, it is a bad deal for seniors, there are good provisions in it. 
I hope if this bill does not go forward, we can pull those provider 
pieces out and support them.
  Why don't I support this bill as written? In this bill as written, 
2.7 million retirees lose their coverage. One out of four folks who 
worked hard during their lives, maybe have taken a pay cut here or 
there to get good health coverage, would actually lose coverage as a 
result of the provisions, the way this bill is written for private 
employers.
  Mr. President, 6.4 million low-income seniors, the folks we all talk 
about, the folks we are desperately concerned about, who really are 
sitting down today at the table and saying, Do I eat today or do I take 
my medicine, they will end up paying more because of the way this is 
changed between Medicaid and Medicare. That doesn't make any sense. It 
is a bad deal for too many of our low-income seniors who need help the 
most. It is a bad deal for 2.7 million folks who have private insurance 
and will lose it. My fear is they will not just lose the prescription 
drug coverage; they will lose their entire health care coverage.
  To add insult to injury, this bill locks in the highest possible 
prices in the world. It keeps drug prices high, which is why the 
pharmaceutical industry is so strongly supporting it.
  They changed their strategy a few years ago. They have been trying to 
stop prescription drug coverage because they didn't want Medicare to 
use its clout as a group purchaser to be able to get a good discount, 
as we do for the veterans, and lower prices. They fought it, but then 
they decided they couldn't fight it anymore because seniors are 
desperate and we do need to do something. We are long past doing 
something real for our seniors. So they changed the strategy. They 
said: Let's write a bill that gets a whole bunch more customers, 40 
million more customers potentially, and let's make sure we lock in the 
highest prices so they can't compete; they can't lower prices; they 
can't go to Canada or other countries where there are safe, FDA-
approved processes right now to be able to bring drugs back across the 
border.

  That is a big deal for us in Michigan. It is 5 minutes across a 
bridge or 5 minutes through a tunnel to be able to get lower prices--in 
half or more. So they made sure we are not going to be able to do that 
and they made sure we are not going to be able to negotiate for lower 
prices.
  What do we have in the end? We have a whole new group of customers 
for the pharmaceutical industry who will be forced to pay the highest 
possible prices.

[[Page S15690]]

  This is not a good deal for our seniors. We can do better than this. 
People don't have to lose coverage. People don't have to pay more. 
People don't have to be locked into the highest possible prices in the 
world. We have time. This bill doesn't take effect until 2006 for our 
seniors. I urge us to take the time to get it right.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. THOMAS. Mr. President, I think we have agreement we would yield 7 
minutes to the Senator from Utah and then 5 minutes to the majority 
whip.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. It is my understanding I have 7 minutes.
  The PRESIDING OFFICER. That is correct.
  Mr. HATCH. Mr. President, I have listened carefully to the debate on 
H.R. 1 during the last few days.
  I regret to say I have heard many half-truths and misrepresentations 
about our bill from the opponents of the legislation.
  This simply won't stand.
  We're reaching the point where twisted facts and wrong-headed 
reasoning have been repeated so often that even those who know better 
are no longer jarred to hear it.
  As one of the conference committee members who actually wrote this 
bill, I find this untenable, because the opposition is just scaring and 
confusing Medicare beneficiaries.
  The last thing any of us want is for critical decisions to be made in 
a climate of fear or in a fog of uncertainty.
  Yes, this legislation is not perfect. But it is good.
  I'll tell you why.
  First, and most important, this bill provides all beneficiaries--
seniors and the disabled--with voluntary prescription drug coverage for 
the first time in almost 40 years.
  Coverage for their medications is something Utah beneficiaries have 
sought for decades.
  Not a day goes by that I do not receive a letter from some part of 
Utah beseeching Congress to pass this bill.
  Second, that coverage will be immediate. Seniors wherever they may 
live, from St. George to Logan, from Tooele to Vernal and down to 
Blanding and Monticello, will be able to use a new drug card to get an 
immediate discount on their medications.
  Third, the program is voluntary. We all know--as do the bill's 
opponents--that beneficiaries will not be forced to join this new drug 
program. If they are happy with the status quo, then things can stay as 
they are. If they want to participate in the new program--it will be 
there for them.
  Fourth, H.R. 1 provides choice in coverage. Beneficiaries may stay in 
traditional Medicare and elect to take a stand-alone drug plan if they 
want one. Or they may receive their coverage through a local health 
plan or the new regional PPO plans offered through the new Medicare 
Advantage program.
  How often does a Federal program offer people the range of choices 
that this bill creates?
  Fifth, this bill preserves retiree health coverage. Close to one-
quarter of the spending in this bill, approximately $89 billion, is 
dedicated to protecting retiree health benefits.
  For the first time--and none too soon--Medicare will provide funding 
as an incentive for employers to continue retiree health coverage. 
Under this bill, no beneficiary will be forced to drop retiree health 
coverage and participate in the new prescription drug program.
  Sixth, the conference agreement is good for rural America, which has 
gotten the short shrift under Medicare for some time.
  We want to ensure that Medicare beneficiaries will have access to 
quality health care, no matter where they live. We also want rural 
providers, providers in Moab and Panguitch, providers in Price and 
Manti, providers who dispense vital health services to beneficiaries, 
to be properly reimbursed for their services. This legislation 
accomplishes those important goals.
  Seventh--as I intend to amplify later--this legislation improves the 
Drug Price Competition and Patent Term Restoration Act of 1984, better 
known as Hatch-Waxman. The conference agreement strengthens the 1984 
law so it is easier for everyone, including seniors and the disabled, 
to have timely access to less expensive, generic drugs.
  Eighth, the Medicare agreement includes an appropriate response to 
the question of reimporting prescription drugs into the United States.
  While we include the provisions contained in the legislation approved 
by the Senate, this agreement also requires the HHS Secretary to 
conduct an extensive study that identifies the barriers to implementing 
a drug reimportation program.
  Many of my constituents have written, asking why they cannot use the 
lower cost medications from Canada. The answer is easy: it is just 
irresponsible for Congress to jeopardize public safety by allowing the 
unchecked reimportation of drugs. That is why I adamantly opposed the 
House policy.
  If we truly care about our seniors and other patients who depend upon 
prescription drugs, we should not expose them to what amounts to 
pharmaceutical Russian roulette.
  And, finally, we have done all we can to craft a bill that is as 
cost-conscious as possible, a bill that the Congressional Budget Office 
has certified stays within our budget, and a bill that minimizes 
bureaucracy whenever possible.
  We have worked hard to write a measure that relies whenever possible 
on the private sector, not on exploding the size of big, Washington 
government.
  Before I conclude, I would like to take a minute to refute some of 
the points that have been raised by the opponents of this legislation.
  Yesterday, I heard my good friend from Massachusetts talking about 
how he feels that the Senate is being stampeded with a bad bill.
  It is hard to argue we are being stampeded, when we have worked on 
this issue for almost 15 years.
  I also have heard our colleague say this legislation dismantles the 
Medicare program and that the HMOs are going to make out like bandits. 
Again, that is simply not true. Guess who was one of the people who 
helped to bring about HMOs. None other than the senior Senator from 
Massachusetts.
  This agreement improves the Medicare program by giving beneficiaries 
voluntary prescription drug coverage for the first time in 40 years--
that is a reaffirmation of Medicare, not a weakening of it.
  We also give beneficiaries expanded choices in their health care 
coverage; they may remain in traditional Medicare or in their retiree 
health care plan. Or they may receive their coverage through local or 
regional plans offered to them through the new Medicare Advantage 
program.
  Contrary to what my friend from Massachusetts says, no one will be 
forced into an HMO, and I hope that the American people are not buying 
that kind of scare tactic.
  The other fallacy that I heard during this debate was that the 
premium support demonstration project, which would be conducted in only 
six metropolitan areas, is going to disadvantage beneficiaries who 
remain in traditional Medicare. I have heard it said that those 
premiums could go up by 10, 15 or 20 percent, even though we who wrote 
the bill know that the Part B premiums for traditional Medicare could 
not rise by any more than 5 percent over the regular premium.
  This rhetoric is absolutely outrageous. If you look on page 254 of 
the conference report, you will see that it is not true. The 
legislative language speaks for itself:
  ``The amount of the adjustment under this subsection for months in a 
year shall not exceed 5 percent of the amount of the monthly premium.''
  In addition, if a beneficiary is under 150% of poverty, there is no 
impact on premiums at all.
  And I am really getting tired of Speaker Newt Gingrich's words being 
continuously misconstrued.
  He never said, as my colleagues on the other side of the aisle like 
to assert, that he wanted Medicare to wither on the vine. What he did 
say is that the agency that controlled Medicare, HCFA, should wither on 
the vine because it was filled with bureaucrats that were strangling 
the program. That is a far cry from what they have been representing--
person after person after person.
  He was arguing against large bureaucracies and for seniors to have 
more control over their health care.
  I have saved the best for last: the accusations and allegations made 
against

[[Page S15691]]

the AARP, which are truly amazing to me. It is truly amazing how last 
year they were considered to be the greatest organization on Earth by 
folks on the other side of the aisle, but this year they are dirtier 
than dirt. That is just not true.
  It is ironic that some in this Chamber are criticizing the AARP for 
supporting a bill that will provide drug coverage to Medicare 
beneficiaries.
  What a difference a year makes! Last year, the AARP could do nothing 
wrong in the eyes of today's opponents.
  Yet, suddenly the AARP is either greedy or being taken in like a 
bunch of half-wits. So much for honest disagreement among friends!
  What has changed? What does AARP know that the opponents of S. 1 do 
not?
  AARP knows that this may very well be our last chance to enact a 
program adding prescription drug coverage to Medicare.
  AARP knows, as we all do, that this is not a perfect bill. But AARP 
also knows that this bill lays a solid foundation which we can refine 
in the future.
  In the eyes of this Senator, AARP has made a courageous decision by 
endorsing our proposal and I greatly appreciate their support
  In conclusion, I want to commend the chairman of the Senate Finance 
Committee, Chuck Grassley and the ranking minority member, Max Baucus 
on a job well done.
  I also want to compliment the Majority Leader, Dr. Bill Frist, on his 
leadership in shepherding this bill through the Senate.
  Today we will make history.
  We will break gridlock. We will act decisively to help the people of 
this great country.
  The citizens of this great country are counting on us to get the job 
done.
  So, let us clear away all the parliamentary hurdles and pass H.R. 1.
  It is the right thing to do.
  One last thing. I have heard some of my colleagues who are opposed to 
this bill raise the issue that Government can do nothing to help 
restrain the growth of drug costs or bring drug costs down. Again, this 
is a misrepresentation of what the conference agreement actually does.
  The conference bill specifies the Government ``may not interfere with 
the negotiations between drug manufacturers and pharmacies and PPO 
sponsors and may not require a particular formulary or institute a 
price structure.''
  Opponents claim that provision, which originated with Democratic 
proposals, by the way, is a concession to the pharmaceutical industry. 
That is why it is so phony to hear these arguments. They are plain 
wrong. The noninterference provision is at the heart of the bill's 
structure for delivering prescription drug coverage. It is a good deal 
for consumers rather than price fixing by the CMS bureaucracy, which I 
believe is opening the door for universal health care. It is a 
misrepresentation of the language in this provision to argue otherwise.
  The PRESIDING OFFICER. The Senator from Kentucky.
  Mr. McCONNELL. Mr. President, will the Senate turn its back today on 
40 million American seniors? We are going to find out in a few hours.
  Will a prescription drug benefit that we have promised our seniors 
for 38 years become law or became a victim to the political agenda of a 
partisan minority?
  This bill provides a Medicare drug benefit to 40 million seniors. It 
has passed the House, and the President of the United States will sign 
it.
  Only one hurdle--just one--stands in the way of seniors getting a 
Medicare drug benefit, and that is the Senate.
  While a strong bipartisan majority in the Senate supports this drug 
benefit bill, that may not be enough. While the American Medical 
Association, AARP, and hundreds of other health provider organizations 
support this bill, that may not be enough.
  While businesses, health plans, citizens, and taxpayer groups support 
this bill, it may not be enough.
  All of this support may not be enough because this is the Senate. And 
the minority can, if it chooses to, obstruct.
  Incredibly, some on the Democratic side plan to kill this Medicare 
drug benefit through a filibuster, or use any other way they can think 
of to defeat the will of the majority.
  Points of order have been suggested. We know this bill is within the 
budget that we passed last year. So there may be some tricky point of 
order raised, but it should not be sustained because we know this bill 
is within the budget that we passed.
  No matter how the minority tries to block the majority in the Senate, 
a filibuster by any other name is still a filibuster.

  Somewhere in my home State of Kentucky, a senior is beginning a new 
week. She will have to choose whether to take half a pill of her 
medication, skimp on her food, or endure some other belt tightening. 
She doesn't understand about filibusters or arcane Senate procedures. 
But she does know that the drug benefit she needs is one step away from 
her. She thinks because the majority rules in America she will get 
relief soon. Well, the majority rule is everywhere except here in the 
Senate, potentially. She may be wrong. Here in the Senate the will of 
the majority can be defeated by the minority. The will of the people 
can be thwarted by a handful--a handful.
  This is as close as we have ever come to passing a drug benefit, and 
a minority in the Senate is determined to make sure this is as close as 
we ever get. They do not want us to ever get any closer than we are 
right now. Why? Why deny our seniors that which they absolutely 
deserve?
  Despite the hyperbole, it cannot be policy. This bill is based on the 
1997 Medicare Commission. It reflects bipartisan legislation, such as 
the Breaux-Frist and the Breaux-Thomas bills. It mirrors the Federal 
Employees Health Benefits Plan, which Senators on both sides of the 
aisle have endorsed. And it is the product of countless hours of 
bipartisan negotiations between the ranking member and chairman of the 
Finance Committee.
  Time and time again, demands have been made by the minority as to 
what must be and what must not be in this bill. Time and time again, 
this leader and this chairman have met them more than halfway.
  The problem today is not this bipartisan policy but raw partisan 
politics.
  Because of partisan politics, some want to keep the Medicare drug 
benefit as the ``Holy Grail'' of American politics--something always 
sought but never found.
  To keep their election year gimmick where the Medicare drug benefit 
is always promised but never delivered--always promised but never 
delivered--this partisan minority will deny seniors a drug benefit now.
  This is crass politics of the worst kind. Our seniors deserve better. 
Our parents always put us first. Now is our chance to put them first.
  But will our seniors come in second place to political games here in 
the Senate? In the fight for prescription drugs, second place gets 
seniors nothing. Today, we will vote to see if we put our seniors first 
or if the greatest generation ever will come in last.
  I yield the floor.
  Mr. THOMAS. Mr. President, I will react to some of the comments, 
particularly the fact there is emphasis in this bill for help for low 
income Medicare Beneficiaries. As we move forward, certainly in 
Medicare the costs obviously are going to get higher as more and more 
in this generation move into the category of Medicare eligibility.
  This conference report contains a generous drug benefit for the dual 
eligible. There is no donut for low-income Medicare beneficiaries. They 
talk about people being less well off because of this. That is not the 
case. This bill guarantees all 6 million dual eligibles, the people 
eligible for both Medicare and Medicaid, access to prescription drugs.
  Under the conference report, dual eligibles will have better access 
through Medicare, especially since State Medicaid Programs are 
increasingly imposing restrictions on patient access to drugs.
  Further, States have the flexibility to provide coverage for classes 
of drugs, including over-the-counter medicines not covered by the 
Medicare Program. This bill ensures appeal rights for dual eligibles. 
Under this arrangement, duals will maintain appeal rights like all 
those in the Medicaid Program. Dual eligibles are a fragile population, 
certainly, and are well taken care of in this bill. The conference 
report recognizes and provides

[[Page S15692]]

generous coverage for those 6 million beneficiaries.
  It is time for the partisan rhetoric to be put aside and we approve 
this bill.
  The PRESIDING OFFICER. Who yields time? If no one yields time, time 
is charged equally to both sides.
  The Senator from Nevada.
  Mr. REID. I yield the Senator from Massachusetts 1 minute additional.
  Mr. KENNEDY. Would the Chair notify me when I have 1 minute 
remaining.
  The PRESIDING OFFICER. The Chair will so note.
  Mr. KENNEDY. Mr. President, in a very short period of time, the 
Senate will be making a judgment about whether we are going to 
effectively close off any further debate on this legislation I hold in 
my hands. It was made available last week, on Friday, to the Members of 
the Senate on an issue of enormous importance and significance to every 
person in America. That is the question of Medicare and its future and 
how our seniors are going to get their prescription drugs.
  It seems to me that out of consideration for our senior population 
and the importance of this issue, the Members of this body ought to 
know what is in it, what is going to benefit our senior citizens, and 
what is going to benefit the special interests. We think we ought to 
take a few more days, come back next week in the Senate and debate that 
issue, spend a couple weeks discussing it.
  But our friends on the other side say no, they had to stay in all 
weekend--which I was glad to do. We had debate on Saturday, we had 
debate on Sunday, and now on Monday they are asking Members to vote on 
this measure.
  I was not in the Senate at the time they passed Social Security, but 
I was here at the time we passed Medicare. The reason we created the 
Medicare system was because private insurance companies were not paying 
attention to the elderly in this country. We debated the issue for 5 
years--not 4 days; 5 years--from 1960, 1961, 1962, 1963, 1964 and 
finally we passed it in 1965. When we passed the Medicare system in 
1965, it was opposed by many on the other side of the aisle. It only 
got 12 Republican votes.
  This is the party that is committed to Medicare and Social Security. 
Over the period of time I have been here, we have seen constant efforts 
to undermine Medicare. It was understood when we passed Medicare that 
there was not going to be a role for private industry to take over 
senior citizens in the Medicare system. Many of our elderly, who have 
worked a lifetime, brought the Nation out of the Depression, fought in 
the World Wars of this country, fought in Korea, and paid their dues to 
the Nation, are elderly and frail and many of them have illnesses. We 
know the private sector cherry-picks, takes the healthiest senior 
citizens and the younger senior citizen, makes a profit, and leaves the 
others out so they can never get any kind of protection. We rejected 
that as a nation, passed Medicare, and said everyone is a part of it.
  That is why it is a beloved program in the United States. Seniors 
today, this morning, this afternoon, last night, know their doctor, 
know their health care delivery, have trust and confidence in Medicare. 
They do not want to risk that. This bill does. This bill does, make no 
mistake about it. It is the beginning of the unwinding of Medicare, the 
replacing of Medicare with the private sector and privatizing the 
Medicare system, make no mistake about it.

  They are using--our friends on the other side--the words 
``prescription drug program'' in order to carry this through. I have 
just listened to some of these statements. They say: ``Don't you want 
your parents tonight in different parts of the country to be able to 
get their prescription drugs in order to meet our responsibility?''
  We have been trying to do that. And we did it pretty well--not as 
well as I would have liked--several months ago, in a bipartisan bill we 
created a prescription drug program. But the bill we have now has 
hijacked the prescription drug program and used it as an excuse to 
undermine the Medicare system, to require, effectively, or coerce our 
senior citizens to leave Medicare and to go into HMOs in order to be 
able to get the prescription drug program.
  The subsidies that are provided for the HMOs are scandalous--
scandalous. We hear about ``free competition.'' There is no more free 
competition than the man in the Moon in this with the kind of subsidies 
that are given. And who is paying for those subsidies? The elderly 
people.
  It is undermining the Medicare system in three different ways.
  First of all, it undermines the Medicare system because of the 
unconscionable subsidies it gives to the HMOs, which will permit them 
to lower their premiums to draw and coerce seniors out of Medicare to 
go for HMOs.
  Second, we have premium support. Premium support just means the costs 
for our seniors who remain in Medicare will be going up.
  Is that what I say? Yes. But who else says it? The Medicare actuaries 
say there will be an explosion in the increase of the cost of premiums. 
Do we want to take that risk? Do we want to say, well, let's try an 
experiment with our nation's seniors? Why do we need an experiment when 
we know the premiums are going to go up?
  The third is the undermining of employer-based systems through the 
HSAs. They tried it. They fought for it. It is an ideological 
commitment on the other side, and they have that included in the 
report.
  All those three measures were not in the Senate bill but in the House 
bill. That is why the bill passed with only one vote in the House of 
Representatives. Imagine that. If this is such a wonderful bill, why 
would they only be able to pass it by one vote? That is all they passed 
it by the first time it came up in the House of Representatives. Then, 
after twisting arms, cajoling, effectively bribing Members in the House 
of Representatives, keeping the tab open for 3 hours, they were able to 
bring together and carry the vote on the repot by just four or five 
votes--this overwhelming new program that is so good for everyone? It 
passed by such a narrow margin. And now they are trying to jam it 
through the Senate.
  We all know what is going on. It is the objective of our good friends 
on the other side; and that is the beginning of the dismantling of the 
Medicare system, make no mistake about it.
  I was here when Medicare passed in 1965. I was here in 1964 when it 
failed. I remember the debate. I remember very clearly. And we are 
seeing, if this bill passes, the beginning of the unwinding of the 
Medicare system.
  Now, you can say: Well, Senator, you are really extending yourself on 
this and your interpretation of the motivation on the other side. I am 
saying they want to undermine the Medicare system. And the next is 
going to be Social Security, make no mistake about it.
  Is that what I say? No. This is just reported in the Washington Post 
this past week. Just read it. It does a lot better sometimes to read 
what the objective is in the White House and what their statements are 
rather than necessarily the speeches by some of our Members on the 
floor.
  Here it is in the Washington Post, on page A-14: Presidential adviser 
said Bush is intent on being able to say that reworking Social Security 
is part of my mandate if he wins. This is it. President Bush aids 
reviving the long-shelved plan on Social Security. It is the 
privatization of Medicare. And next is Social Security. That has been 
their objective.

  The PRESIDING OFFICER. The Senator has 1 minute.
  Mr. KENNEDY. Now, Mr. President, we are strongly committed--when this 
bill fails or goes down, or a legitimate point of order is made--that 
we go back to the drawing boards. I am as strongly committed to get an 
effective prescription drug program as I was when I stood earlier this 
year when we passed a good program here in the Senate in a bipartisan 
way, and as I was when I stood with the Senator from Florida and the 
Senator from Georgia, Mr. Graham and Mr. Miller, when they fought for a 
good program here, and we got 52 votes for it.
  But when we hear all this chatter over on the other side about, oh, 
my goodness, they are filibustering the bill, they filibustered that 
bill--Republicans filibustered that bill a year and a half ago. We got 
52 votes. They would not let it pass. They refused to. It was a good 
bill.
  So let's go back to the drawing boards. Let's go back to that 
conference. Sure, they will say: Well, we

[[Page S15693]]

can't. It is conferenced. They say we have Thanksgiving coming up. We 
can't do it. We would like to be home for Thanksgiving. But this is a 
matter of life and death for many of our senior citizens.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. KENNEDY. I thought I asked the Chair to inform me when I had 1 
minute left.
  The PRESIDING OFFICER. I rapped the gavel and said 1 minute. I 
thought the Senator had seen it.
  Mr. KENNEDY. Well, Mr. President, I hope we will not invoke cloture.
  The PRESIDING OFFICER. Who yields time? Who yields time?
  Mr. THOMAS. Mr. President, I yield to the Senator from Utah for 3 
minutes.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. HATCH. Mr. President, I have listened to my dear friend and 
colleague from Massachusetts. I guess he wants us to spend another 15 
years either trying to reform Medicare, improve Medicare or pass 
another prescription drug benefit program through the Congress.
  We are putting up $400 billion over 10 years, for both a Medicare 
drug benefit, something that seniors currently do not have today, and 
Medicare program improvements. Medicare beneficiaries have a choice of 
whether or not they want to participate in this program. They may 
remain in traditional Medicare. And, to be honest with you, those 
remaining in traditional Medicare who end up participating in the 
comparative cost adjustment demonstration project will not see their 
premiums increase more than 5 percent.
  Mr. KENNEDY. Will the Senator yield on that point?
  Mr. HATCH. I only have a few minutes, so I would like to finish my 
comments.
  According to my colleague from Massachusetts, we are dismantling 
Medicare. That could not be further from the truth.
  How can we say that--when we are improving and strengthening 
Medicare, we are giving Medicare beneficiaries a choice of coverage, 
and we are giving them $400 billion to help with their prescription 
drug coverage and Medicare benefits. These new choices include the 
plans created under the new Medicare Advantage Program, the stand-alone 
drug plan, the regional plans, the local plans--how on Earth is that 
dismantling Medicare? And this coming from one in this body who was one 
of the major proponents of HMOs, to begin with? I might add, I have 
been here long enough to have remembered that.
  Next is Social Security? Nobody in this body wants to hurt Social 
Security, and the Senator from Massachusetts knows that. Since when 
does the Washington Post have the inside track on the Senate Republican 
agenda? Give me a break.
  Mr. KENNEDY. Will the Senator yield on that issue?
  Mr. HATCH. I am going to finish in just a minute.
  Again, I think my friend from Massachusetts, as great a Senator as he 
is, is trying to scare senior citizens. And, frankly, I think to say 
let's just not pass this bill and let's go back to the drawing boards 
is just plain wrong. The Members of the Medicare conference have been 
meeting for hours and hours, days, weeks, months to figure out how to 
provide Medicare beneficiaries with the best drug coverage possible. 
There are Members of Congress who have been working on this issue, 
trying to get a bill signed into law, for close to 15 years. And we are 
almost at the finish line. Yet my good colleague wants to go back to 
another 15 years of floundering around on this issue.

  Now, if beneficiaries did not have choice in drug coverage, maybe my 
friend from Massachusetts would have a point. But seniors will have 
choice in coverage. Why would we go back to the drawing board, 
especially after all the time and effort we have put in this 
legislation? We have before us a bill that really does so much for 
seniors. The AARP is coming out strongly behind this bill, because they 
know full well that it is the last train out of the station, it is the 
only way we can go. I urge my colleagues to support this legislation so 
Medicare beneficiaries can finally have what they have wanted for close 
to 40 years--comprehensive prescription drug coverage.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. HATCH. I yield the floor.
  Mr. THOMAS. Mr. President, I yield 2 minutes to the Senator from 
Vermont.
  The PRESIDING OFFICER. The Senator from Vermont is recognized for 2 
minutes.
  Mr. JEFFORDS. Mr. President, I have been listening closely to our 
colleagues and their many statements of support or opposition to the 
Medicare Prescription Drug and Modernization Act of 2003.
  Some have said this is the culmination of the debate we began last 
year. But this debate is much older than just a year, or even 2 years.
  The debate as to whether, and if so how, to provide prescription 
drugs for the elderly through the Medicare program has been with us 
since the very beginning of the program.
  Thirty-eight years ago, when this body engaged in the historic debate 
on the original Medicare bill, Senator Jacob Javits from the state of 
New York offered an amendment to ensure that Medicare beneficiaries 
would have access to prescription drugs. Senator Javits was asked to 
modify his amendment to a study that would examine the assurance of 
paying for drugs, methods of avoiding unnecessary utilization of drugs 
and mechanisms for controlling costs.
  Now, almost 40 years later, they are still debating the very same 
issues that were part of the 1965 Javits debate. We should enact a 
prescription drug benefit today. The doom and gloom scenario painted by 
the bill's opponents is as exaggerated as the claims that this bill 
will solve all seniors' needs. It is time to put aside our differences 
for the good of all seniors. This is not a perfect bill, but it is a 
very good bill.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. JEFFORDS. May I have an additional 1 minute?
  Mr. THOMAS. Without objection.
  Mr. JEFFORDS. Forty million seniors and disabled Americans need help 
now. They cannot afford to wait for a perfect program because it may 
never come. The bill provides the foundations we need. In the final 
analysis, I find there are more reasons to support this bill than to 
oppose it. I fear that if we do not take this golden opportunity, we 
will have lost it forever.
  We have on one hand the opportunity to provide the largest benefit 
improvements to Medicare in nearly 40 years, including a comprehensive 
and universal prescription drug benefit.
  On the other hand, we can turn away from the proposal before us 
today, and return yet again to the drawing board in search of 
perfection.
  I believe it is time that we begin to offer a real benefit instead of 
more studies, more analysis and more delay. We should enact a 
prescription drug benefit today.
  Let's take a moment to look at some of the issues, because I think it 
is worth dwelling on why I think we should vote in support of this 
measure.
  Vermont already has one of the most generous prescription drug 
programs for the elderly and disabled.
  As part of a waiver through the Medicaid program, Vermont expanded 
its ``V-Script'' state pharmacy assistance program and extended 
subsidized coverage to individuals at 250 percent of poverty, well 
above the income levels that provide subsidies in this measure.
  In fact, the Vermont V-Script program is so generous that some have 
argued that people will be worse off with a less-generous Federal 
benefit. I don't think that's the case.
  First, in today's economy there is no guarantee that Vermont will be 
able to continue its current level of support for the V-Script program.
  But this bill dedicates almost $400 billion to the development of a 
universal prescription drug program, representing the largest expansion 
of the Medicare program since its inception.
  This bill will guarantee a comprehensive and universal drug benefit 
to 41 million seniors in America.
  That includes all 93,000 seniors in my own home state of Vermont. 
And, it guarantees the same coverage to the millions of baby-boomers 
who will soon rely on Medicare.
  For 40,000 seniors in Vermont with limited savings and incomes below 
$13,470 for individuals and $18,180 for couples, the Federal Government 
will cover most of their drug costs. In fact, nearly one-third of all 
seniors nationwide will receive assistance for nearly 90 percent of 
their drug costs.

[[Page S15694]]

  Additionally, Medicare, instead of Medicaid, will now assume the 
prescription drug costs for 21,767 Vermont beneficiaries who are 
eligible for both Medicare and Medicaid.
  According to the Centers for Medicare and Medicaid Services, this 
will save Vermont $76 million over 8 years on prescription drug 
coverage for its Medicaid population.
  Finally, the bill includes provisions that will allow States such as 
Vermont that have pharmacy assistance programs to augment, or ``wrap-
around'' the Federal Medicare benefit with State resources.
  In fact, there is nothing in the legislation that would preclude 
Vermont, should it wish, from using the savings to establish its own 
prescription drug plan as long as it meets the requirements of the 
bill.
  Some of our colleagues have criticized this bill, arguing that it 
would lead to an increase in employers dropping or reducing 
prescription drug coverage for its retirees.
  I have looked at the estimates put forth by the Congressional Budget 
Office and the employee benefit think tanks, and I am concerned with 
those numbers.
  But again, it is important to consider this potential downside in 
light of what is already occurring.
  The number of employers providing prescription drug benefits has 
already been steadily declining for years, and without this Federal 
guarantee those disenfranchised workers would not have any benefit at 
all.
  In short, no senior, regardless of income, will go without 
prescription drug coverage in Vermont or throughout America once this 
legislation is enacted. That is, in part, why two of the largest 
national aging organizations such as AARP and the National Council of 
Older Americans supports this legislation.
  And it why the Vermont AARP supports it as well.
  Perhaps most important of all is the $25 billion for rural providers, 
ending years of unfair payments to rural hospitals, doctors and other 
providers.
  This bill will ensure reliable access to health care services for 
seniors by better compensating health care providers.
  I have already seen estimates that these rural provisions will 
provide Vermont hospitals with an additional $41 million over the next 
10 years, and physicians will get a boost of $18 million in 
reimbursements over the next 2 years.
  I have received many announcements from many Vermont constituents and 
stakeholders, including the Vermont AARP, the Fletcher Allen Health 
Center, the Vermont Association of Hospitals and Health Systems.
  I am also glad that Chairman Grassley and ranking member Baucus have 
worked with me to address another inequity in the system.
  Critical access hospitals provide care in some of the most 
underserved regions of Vermont, as is the case throughout rural 
America. These hospitals are small, yet serve as critical resources to 
their communities.
  So I am pleased to see that the conferees retained a provision from 
the Senate measure that will allow critical access hospitals, such as 
Mt. Ascutney Hospital in Windsor, VT, to expand access to psychiatric 
and rehabilitative services to the most vulnerable citizens in that 
community.
  Finally, I would like to acknowledge the conferees for retaining 
another key provision from the Senate bill that will begin a major 
demonstration on improving quality and patient outcomes for Medicare 
beneficiaries.
  This is the result of several years of working in concert with Dr. 
Jack Wennberg at Dartmouth College to bring greater attention to the 
regional disparities in the consumption of health resources without the 
improvement in health outcomes to show for it.
  I acknowledge the sentiments of many of my colleagues here today. I 
too agree that this is not the bill I would have written if I had 
infinite resources to do it.
  This bill is not perfect. However, after all of the time that has 
been spent on trying to develop a Medicare plan for prescription 
drugs--38 years--it would be a missed opportunity if we reject this 
good beginning to comprehensive coverage.
  By passing this bill, we are laying the foundation. A foundation that 
requires constant vigilance, as has the original Medicare program.
  So in closing, I would like to urge my colleagues from both sides of 
the aisle to support this bill as we move forward.
  This bill will establish a drug benefit that is universal, 
comprehensive, affordable, and sustainable.
  This bill restores necessary and long-needed fairness to our 
physicians and providers in rural areas. And, the bill will improve the 
quality of care offered under Medicare.
  I hope my colleagues will join me in voting for the measure.
  I ask unanimous consent to have the following article printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

AARP Calls on Vermont Congressional Delegation To Vote for Medicare Rx 
                                  Bill

       (Montpelier, Vermont) Earlier this week AARP, the leading 
     advocate for older Americans with 35 million members 
     nationwide and more than 116,000 in Vermont, endorsed the 
     Conference Committee's Medicare Rx bill. Their bill 
     represents a first step in the nation's commitment to 
     strengthen and expand health security for its citizens.
       ``For the first time in the history of the Medicare 
     program, more than 90,000 Vermont Medicare beneficiaries will 
     have access to a prescription drug benefit. This is about 
     getting vital help to people who need it most--people whose 
     high drug costs have become a heavy burden to them and their 
     families,'' said Philene Taormina, AARP Vermont Director of 
     Advocacy.
       AARP and its members call on the Vermont Congressional 
     delegation to vote for the Conference Report that establishes 
     a prescription drug benefit in Medicare.
       In a survey conducted Wednesday of this week 83 percent of 
     AARP members polled supported enactment of the Medicare 
     legislation. Further, 75 percent of respondents said that the 
     proposed Medicare legislation should be passed because it 
     will help low-income elderly and those with high prescription 
     drug costs. Among middle and big-income individuals, 80 
     percent were in favor of passing the legislation for this 
     reason; support for the bill was evenly split among Democrats 
     and Republicans.
       Every day, AARP receives letters and calls from our members 
     recounting how the high cost of prescription drugs is hurting 
     their financial and physical health. We believe that the 
     legislation that has emerged after long negotiations is the 
     right start to relieve these burdens for millions of older 
     and disabled Americans and their families. Though not 
     perfect, the bill represents an historic breakthrough and an 
     important milestone in the nation's commitment to strengthen 
     and expand health security for current and future 
     beneficiaries. This Medicare legislation guarantees a 
     voluntary drug plan is available for all Medicare 
     beneficiaries, regardless of where they live.
                                  ____


 Vermont Physicians and Hospitals Strongly Support Passage of Medicare 
                           Reform Legislation

       Montpelier.--The Vermont Medical Society (VMS), Fletcher 
     Allen Health Care and the Vermont Association of Hospitals 
     and Health Systems today announced their strong support for 
     the Medicare Prescription Drug and Modernization Act of 2003 
     conference report and urged tri-partisan support for its 
     passage. Not only will the bill provide a prescription drug 
     benefit to almost 93,000 Vermonters for the first time in the 
     history of the Medicare program--beginning in January 2006--
     but it will also increase access to physician services for 
     Medicare beneficiaries in Vermont and improve Medicare 
     reimbursement rates for Vermont's rural hospital system.
       The legislation provides approximately $28 billion 
     nationwide to correct a number of basic inequities in 
     Medicare's reimbursement system for rural providers. 
     Physicians in rural areas like Vermont are currently paid far 
     less under the Medicare program than their colleagues in 
     urban areas for doing the same procedures. In fact, in 1998 
     Vermont received the lowest payment of any state for its 
     Medicare beneficiaries. This poor reimbursement continued 
     despite Vermont being ranked this year as 2nd highest in the 
     country in the quality of care provided to Medicare patients.
       The Medicare prescription drug benefit bill being 
     considered by Congress will greatly reduce the geographic 
     disparities in physician payments. ``If the Medicare bill is 
     passed it will be much easier to recruit physicians to serve 
     rural states like Vermont,'' said VMS President James 
     O'Brien, MD. ``Congress must pass this legislation before the 
     Thanksgiving recess to fix many of the reimbursement issues 
     that have unfairly penalized Vermont.''
       ``Clearly, this bill will benefit Vermont's rural health 
     care system as well as Fletcher Allen,'' said Melinda Estes, 
     president and Chief Executive Officer, Fletcher Allen Health 
     Care. ``It provides real benefits for all Vermonters.''
       The legislation protects Vermonters' access to physicians 
     by replacing a 4.5 percent

[[Page S15695]]

     payment cut scheduled for 2004, which would have reduced 
     Medicare payments to Vermont physicians and hospitals by $6.7 
     million, with two years of modest payment increases. The 
     Vermont Medical Society estimates that if the bill passes, 
     Vermont providers will see an increase in payments of more 
     than $2 million a year. The improved reimbursement will 
     encourage physicians to lift restrictions on how many 
     Medicare patients they accept in their practices.
       Rural Vermont hospitals will also benefit if the Medicare 
     bill passes, because they will be paid at the same rate for 
     procedures as hospitals in more urban areas. Richard Slusky, 
     administrator of Mt. Ascutney Hospital stated, ``This bill is 
     an important step forward for Vermont's Medicare 
     beneficiaries and our small, rural hospitals. As a Medicare-
     designated Critical Access Hospital, the rural hospital 
     provisions in this bill will strengthen our ability to 
     provide the local services our patients need. This assistance 
     could not have come at a better time for our community.''
       Bea Grause, President and CEO of the Vermont Association of 
     Hospitals and Health Systems (VAHHS), believes that the bill 
     is good for Vermont hospitals and for Vermont hospitals and 
     for Vermonters with commercial health insurance coverage. 
     ``This bill will increase Medicare payments to Vermont 
     hospitals by $41 million over ten years.
       This will help to reduce the cost shift to Vermonters with 
     commercial health insurance coverage and will move us toward 
     a fairer reimbursement system for our rural hospitals with a 
     high percentage of Medicare recipients in their case mix.''
       The provisions improving access for Vermont Medicare 
     beneficiaries and reducing disparities in payment for rural 
     providers were added to the conference committee report 
     through the efforts of Sen. James Jeffords. The Vermont 
     Medical Society, Fletcher Allen Health Care and the Vermont 
     Association of Hospitals and Health Systems commend Sen. 
     Jeffords for his work to protect the Medicare benefits of all 
     Vermonters.

  Mr. THOMAS. Mr. President, could the Chair tell us how much time 
remains on each side?
  The PRESIDING OFFICER. Thirteen/15 on your side; 15/40 the other 
side.
  Mr. THOMAS. I thank the Chair. I yield such time as he may consume to 
the chairman from Iowa.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I should not take more than 5 minutes, 
so please tell me when 5 minutes are up.
  This is the opportunity, a time of destiny, whether or not this 
Congress will deliver on the promises of the last three elections, the 
promises the other party has made as well. Thank God there are people 
in the Democratic Party who are working in a bipartisan way to deliver 
on the promises of that party as there are Republicans willing to 
deliver on the promises of the Republican Party.
  Nothing gets done in this body without bipartisanship. This is 
bipartisan. We are putting aside partisanship. It is time the other 
side put aside rhetoric and complete our work on this bill for which 
the AARP says seniors have waited far too long.
  This bill offers an affordable, universal prescription drug benefit. 
This bipartisan bill offers better coverage than today's Medigap 
policies plus Medicare. It also offers much more generous coverage for 
14 million lower income seniors. And just to emphasize this point, this 
bill does not harm 6 million seniors, as the opponents of this 
legislation claim. That is political poppycock.
  In fact, this bill protects the benefits for these 6 million and then 
adds generous prescription drug coverage for an additional 8 million. 
It expands coverage for lower income seniors, far more than anything 
offered today. This means that for about two in five seniors, this bill 
offers drug coverage with lower or no premiums, no coverage gap, and 
coverage of 85 to 95 percent of the cost of prescription drugs. And it 
is voluntary.
  The opponents of this legislation happen to believe--and they 
sincerely believe--that Government should always force people into 
doing something. We want the right to choose for our seniors. Seniors 
can stay in traditional Medicare if they like what they have today and 
have full access to prescription drugs. There is also a guaranteed 
Government fallback if private plans might not go to all rural areas of 
America. This bill protects retiree benefits in the corporation from 
which they retired. Overall, we put $89 billion in this bill to protect 
retiree health coverage.
  This bill also creates new choices similar to what Federal employees 
have for beneficiaries in a new revitalized Medicare Advantage Program. 
With respect to drug costs, the bill speeds the delivery of new generic 
drugs to the marketplace, lowering drug costs to Americans and not just 
those on Medicare.
  Finally, the bill includes long overdue improvements in Medicare's 
complex regulations. It also revitalizes the rural health care safety 
net with the biggest package of rural payment improvements that 
Congress has ever done or seen. I urge my colleagues to put the 
interests of our seniors first and give them more choices and better 
benefits by supporting this bill.
  Most importantly, we have brought this bill as far as we have over 
the last 4 or 5 years because of bipartisanship. I hope this body will 
not let the narrow partisanship of a few on the other side of the aisle 
destroy our efforts.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. REID. Mr. President, I yield 7 minutes to the Senator from 
Massachusetts, Mr. Kennedy.
  Mr. KENNEDY. Mr. President, I didn't hear a word from the chairman of 
the Finance Committee on what he is going to do or what this bill is 
going to do with regard to costs. Hello? Costs. There is virtual 
silence in this bill.
  We know what is happening to the senior citizens. It is an issue of 
access to prescription drugs and it is an issue of cost. This bill does 
not meet its responsibility in terms of protecting our senior citizens 
with regard to the cost.
  The Senator from Iowa mentioned the numbers of people who are going 
to be the losers. If the Senator has trouble with this, just ask the 
Budget Committee, not the Senator from Massachusetts. They said that 6 
million seniors who are on Medicaid are going to lose their coverage. 
That isn't the Senator from Iowa or Massachusetts, that is the 
financial analysis. And 2.7 million retirees are going to be dropped, 
for a total loss of 9 million; almost 25 percent of the total retirees 
are going to be lost.
  We can do better. We can do something about the escalation of cost, 
but they refuse to do it. Let's go back to the drawing board and do 
something that is worthwhile.
  The Senate is on trial today. In a few moments we will vote to stop 
this charade. But I say this today: I am going to fight this bill with 
everything I have and, if necessarily, fight it tomorrow, next week, 
and next year. I will fight it for the nurse who paid into our hospital 
retirement fund for 20 years and the 3 million retirees like her who 
will lose their health insurance because of this bill. I will fight for 
the city workers in Springfield, MA, whose brave mayor plans to 
purchase cheaper prescription drugs from Canada for them and their 
families, an action that is illegal--do you understand?--illegal under 
this bill. I will fight for the widowed grandmother on Medicaid and the 
7 million poor Americans like her who count every penny yet will pay 
more for their prescription drugs under this bill. And I will fight for 
the 36 million Medicare seniors who want to stay in the program they 
love with the doctors and the hospitals they choose.
  I will fight to keep billions and billions of Medicare dollars that 
come out of your paycheck from lining the pocketbooks of the big drug 
companies and the HMOs. I will fight it for our honor as a nation that 
keeps its commitment to our seniors, the ones who fought our wars, 
raised our families, and built our economy.

  The more the American people learn about this legislation, the less 
they like it. The more senior citizens learn, the more they oppose it. 
Let us not reverse the historic decision our country made in 1965. Let 
us not turn our backs on our senior citizens so that insurance 
companies and pharmaceutical companies can earn even higher profits. 
Let us reject this bill and come back and do the job right.
  I withhold the remainder of my time.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. I yield 3 minutes to the Senator from Louisiana.
  Mr. BREAUX. Mr. President, I think one of the subjects that really 
united both Republicans and Democrats was the question about dual 
eligibles. There was a large number of seniors being treated as second-
class citizens

[[Page S15696]]

of this country because, if they were poor, they were not in the 
Medicare Program. If they were poor, they were not allowed to get 
through the Medicare door, and for no other reason than they were poor.
  Under that scenario, low-income seniors, maybe 80 years old, who 
worked all of their lives, but ended up in a very low-income status, 
were relegated to the Medicaid Program, where there was not a 
consistent amount of benefits for their health care programs. They were 
subject to the will and whims of the various State legislatures. Some 
treated them better, some treated them worse, and some didn't treat 
them hardly at all.
  What we were able to do, which I thought was a priority for many 
Republicans because it was in the House bill--but it also was a 
priority for many Democrats in this body--was to say that we are going 
to bring those low-income seniors, for the first time, into the Federal 
Medicare Program. We did that. That is part of this bill. Those low-
income seniors now are going to have the opportunity to be in the 
Federal Medicare Program. They will know what their benefits are. They 
will know, for the first time, they have access to prescription drugs, 
which is what I think the bill is all about. In addition, we were able 
to find an extra amount of money to help them with any type of 
copayments they might have.
  Some States have high copayments; some States have no copayments on 
drugs. But what we were able to do was to say: Here is extra money for 
the purpose of helping States to reduce the copayments down to $1, if 
they are buying a generic drug and only $3 if they are buying a 
prescription drug. In addition to that, the subsidies and assistance we 
have for low-income seniors in general is extremely important.
  Starting in April of this coming year, they will get a drug discount 
card. If they are low-income, they will start off with a $600 credit on 
that card, to be able to immediately have the benefit of something, 
where they have nothing at all today.
  On balance, when you have a 150 percent of poverty and below special 
assistance program, when you have a discount card that starts in April, 
and all of the seniors, for the first time, will be in the same Federal 
program, I think that is significant. For the first time, we will say 
to seniors who are low income that you will no longer be treated as a 
second-class citizen and be different from all of the other seniors you 
know. You will be part of the Federal program and you will have access 
to prescription drugs.
  Again, I think the question is, Have we designed a perfect bill? The 
answer is no. But I think when you look to associations such as AARP 
and the National Council on the Aging, we have a bill that merits their 
support.
  Mr. REID. Mr. President, my understanding is that we have 12 minutes 
left.
  The PRESIDING OFFICER. That is correct.
  Mr. REID. We have allocated time to Senator Edwards, 3 minutes; is 
that right?
  The PRESIDING OFFICER. That is correct.
  Mr. REID. I yield 8 minutes to the Senator from Massachusetts, Mr. 
Kennedy. We want to make sure we will use all of our time now. If 
Senator Edwards isn't here, that time will run because Senator Frist 
gets the last 5 minutes.

  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KENNEDY. Mr. President, I will just take a few moments to review 
for our colleagues what the implications of this bill will be for my 
State of Massachusetts. I can say that this is very typical of what is 
going to happen just about to every State. We have three MSA 
potentially eligible for premium support--the program that will raise 
premiums and effectively drive our seniors out of Medicare into the 
hands of the HMOs. We have three potentially eligible. We have 62,000 
retirees who will lose their drug coverage. They are part of the 6 
million nationally, and those figures are the figures that have been 
found by the Center for Budget and Policy Priorities. So we have 62,000 
retirees who will lose their drug coverage. And 185,500 low-income 
elderly and disabled will pay more for prescription drugs. We have 
60,000 low-income elderly and disabled who will fail the assets and 
income test in Massachusetts.
  This conference reimposed the asset test, which we had eliminated 
here by 67 votes in the Senate. They reimposed it. So there are 2.8 
million across the country, and 60,000 in my State, who will fail the 
asset test, and 34,920 seniors will pay more for Part B premiums.
  In the few hours of this debate, the proponents of this legislation 
have described their proposal in the most benign and misleading terms. 
They say it gives seniors the freedom to choose among competing plans 
and gives protection to the poor seniors. They say this bill will lower 
drug prices through competition. They say at least it helps low-income 
seniors. They are absolutely wrong on all those counts.
  Here is the truth: This is a partisan plan, I remind my friend from 
Iowa. You saw the vote over in the House of Representatives, what the 
Republican leadership had to do to coerce Members to pass it. That 
answers the question as to whether or not this is a partisan plan. This 
partisan program is out of the mainstream. The proposal damages 
Medicare and leaves the millions of senior citizens who rely on it 
without a lifeline. It is the first step toward a total dismantling of 
Medicare. In exchange for destroying Medicare, it offers senior 
citizens a paltry and inadequate drug benefit. The moment it is 
implemented, it will make 9 million senior citizens--almost a quarter 
of all senior citizens--worse off than they are today.
  Senior citizens already have the most important choice they want--the 
choice of doctors and hospitals they trust. That is the choice they 
want, not higher premiums and premium support. Those are their choices 
if we pass this. They lose if they are forced to join HMOs and PPOs, or 
other programs that say an insurance company bureaucrat can choose 
their doctor for them.
  Senior citizens already have the choice to join a private insurance 
plan competing with Medicare if they choose. But 9 out of 10 prefer to 
stay in Medicare. So they already have a choice and they are not taking 
it. But under this bill, you are providing so much in terms of 
effectively bribing them, and overpayments that they will eventually 
coerce those seniors. The bipartisan bill that passed the Senate 
provided additional choice, a program for regional PPOs. The conference 
adopted a right-wing House approach of ending Medicare as we know it 
and establishes a massive demonstration program that would subject 7 
million senior citizens--1 out of 6--to a so-called premium support 
program.
  Mr. HATCH. Mr. President, I would like to take a few minutes to rebut 
some of the points raised by the Senator from Massachusetts.
  First, he mentioned he is concerned about the cost of this bill. Let 
me remind my friend from Massachusetts that last year, he supported a 
bill that would have not only cost $800 billion, it would have 
sunsetted the Medicare prescription drug benefit. How would that have 
helped senior citizens and other Medicare beneficiaries, especially the 
disabled?
  Our bill costs $400 billion over 10 years and it is a permanent 
benefit.
  He also mentioned retiree health benefits and how individuals are 
going to lose their coverage as a result of the bill. Let me correct 
that statement for the record. First, $89 billion--yes, I said $89 
billion--is devoted to employer subsidies in order to preserve retiree 
health benefits, so individuals will not lose their retiree health 
coverage. We have gone from a drop-out rate of 37 percent in H.R. 1, to 
a drop-out rate of under 20 percent. Again, my colleague is simply 
using scare tactics.
  Mr. KENNEDY. Mr. President, I see the Senator from North Carolina 
here. He wanted some time.
  The PRESIDING OFFICER. The Senator has 7 minutes 10 seconds.
  Mr. KENNEDY. I am glad to yield that to the Senator. I know he 
intended to speak.
  The PRESIDING OFFICER. The Senator from North Carolina is recognized.
  Mr. EDWARDS. Mr. President, I thank the Senator from Massachusetts. I 
spoke yesterday, but I wish to speak once again on this bill.
  This bill is a perfect example of the kind of legislation that should 
not go through the Senate. It is a giveaway to HMOs and insurance 
companies, a giveaway to big drug companies, a continuation of this 
administration's shifting

[[Page S15697]]

of the tax burden in America from wealth and the wealthy to work and 
the middle class.
  It is not shocking that there is a $12 billion stabilization fund in 
this bill--$12 billion of taxpayer money that is going to go to HMOs so 
that they can compete? I thought the whole purpose of this bill was so 
that HMOs could provide competition. We are going to give $12 billion 
of taxpayer money--money that, in fact, could go to providing a better 
prescription drug benefit to seniors who desperately need it, instead 
of using that money to cover seniors, to give them help in getting the 
medicine they desperately need when they go to the pharmacy. No, 
instead we are going to give $12 billion of taxpayer money to HMOs. 
That is a great idea. That is just a terrific idea.
  On top of all that, we are not going to do anything meaningful to 
bring down the cost of prescription drugs. We have been through this 
fight over and over. We fight to try to allow reimportation of 
prescription medication from Canada, to bring down costs for people in 
America. Does it pass? No. Can we get it into this bill? No. Why? 
Because the drug companies are against it.
  We try to do something about misleading company advertising on 
television. Billions and billions of dollars are being spent every year 
by drug companies on television advertising. Much of the advertising is 
misleading. We know who is paying for this advertising: consumers, 
seniors, every time they go to the pharmacy, are paying for those ads. 
When we try to do something about that advertising, try to put some 
kind of reasonable controls on it, are we able to do it? Are we 
successful? No. Why? Because the drug companies are against it.
  We cannot even allow the Government to use its bargaining power to 
bring down the cost of prescription drugs for all seniors.
  This bill is a giveaway--a giveaway to HMOs, a giveaway to drug 
companies. It is not surprising that as a result of looking as if this 
bill is about to pass, the drug companies' stock and HMO stock is 
rising.
  One thing I can tell you for sure, if this bill passes, it will pass 
over the dead bodies of a lot of us standing here fighting against it. 
If this bill passes, the lobbyists will be celebrating all over this 
town, lobbyists who worked this bill every single day on behalf of the 
HMOs and the drug companies.
  I grew up in a small town in North Carolina in a rural area. There 
are more lobbyists for those industries around Washington, DC, than 
people who live in my hometown. How about if we in the Senate stand up 
for the kind of people I grew up with in that small town? How about if 
we actually stand up to big drug companies and big HMOs?
  Speaking for this Senator, I intend to stand up to those people. I 
will vote no and fight with everything I have to stop this legislation.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. EDWARDS. I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. THOMAS. Mr. President, I yield 1 minute to the Senator from 
Montana.
  The PRESIDING OFFICER. The minority still has time at this point.
  Mr. KENNEDY. How much time do we have?
  The PRESIDING OFFICER. Three minutes ten seconds.
  Mr. KENNEDY. I will be glad to wait until the Senator concludes, and 
then I will yield the remaining 3 minutes to my colleague from 
Massachusetts.
  The PRESIDING OFFICER. The Senator from Montana has 1 minute.
  Mr. BAUCUS. Mr. President, there is not a lot to say in 1 minute. I 
will do the best I can.
  Essentially, we have $400 billion in prescription drugs for seniors. 
I do not see how in the world we can let that moment pass by.
  It was said before that there are not enough low-income benefits for 
seniors. The previous speakers said that. They are wrong. One-third of 
our seniors will get such benefits under this bill that 95 percent of 
their benefits will be paid for. One-third of American seniors will 
find that 95 percent of their benefits are paid for. The allegation is 
there is no help for low-income seniors. That is just flat wrong.
  There were a lot of other statements made by those opposed to this 
legislation that are flat wrong. Some say 10 million will be affected 
by premium support. Flat wrong. We asked CBO what the number is. They 
said 600 to 700 to 1 million.
  Some people say 6 million were going to be hurt by Medicaid. Flat 
wrong. It is much less than that.
  I strongly urge Senators to look at the facts. Vote for the bill and 
particularly vote against the points of order because those are mere 
technicalities. They don't go to the substance of the bill. It is 
important to pass this legislation now for seniors.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President, the Senator from Montana just admitted the 
case. He said it is much less than that. He is arguing over fewer 
people being hurt, not whether any are going to be hurt.
  The question is, Why are people going to be hurt? How many people 
know there is going to be $25 billion raised in new revenue directly 
out of the pocket of senior citizens because we are going to increase 
the cost for the traditional Medicare coverage for doctor and hospital 
visits?
  This is following right in the wake of the Energy bill. Same deal. 
You pick up the newspapers and you see a headline: Drug companies win 
in battle over prescription drugs. Who do you think lost if the drug 
companies won? The senior citizens.
  There will be $139 billion or $125 billion, depending on which you 
read, of windfall profits to the drug companies. Why are the drug 
stocks going up the way they are? The difference between Medicare 
administrative costs, which are 2 percent, and drug company 
administrative costs, which are 15 to 20 percent, are now going to run 
roughshod over seniors who are going to be paying the additional 
administrative costs, and they are not going to get the benefit of 
lower cost drugs.
  There is nothing in this legislation that lowers the cost of 
prescription drugs. Indeed, it is the opposite. By pushing seniors off 
Medicare into HMOs and giving them the tough choice that if they were 
to stay where they have the ability to, they are going to pay more, 
they are going to be picking up the additional cost. This is going to 
be like catastrophic insurance in the 1980s when they pass legislation 
they think is good and seniors find out how complicated it is and how 
much more they are paying, which is exactly why it has been set for 
2006 for implementation. It took us 11 months to put the entire 
Medicare Program in place. Why can't we put a prescription drug benefit 
in place 2 months from now or 3 months from now? Why does it have to be 
2006 after the 2004 election? This is one of the greatest giveaways 
that I have seen in this city in a long time.

  We are not even going to allow Medicare to negotiate lower bulk 
prices. The State of Maine is allowed to do that. We have veterans who 
are allowed to do that. We have veterans in this country for whom the 
VA, in an almost unanimously adopted amendment in this body, can go out 
and do bulk purchasing. And we are not going to allow Medicare to bulk 
purchase and lower the prices.
  We should vote no. This is wrong. It is a giveaway. It is a special 
interest bonanza.
  The PRESIDING OFFICER. The Senator's time has expired. The majority 
leader.
  Mr. FRIST. Mr. President, we bring debate to a close prior to a very 
historic vote in which we are making a decision whether to give 40 
million seniors the opportunity, for the first time through Medicare--
the program that has been constructed and been used to give them health 
care security--whether for the first time these 40 million seniors will 
have access through that program to prescription drugs, to the tool 
which is the most powerful element of health care security today. 
Seniors don't have it. What we are voting on today is to give them that 
true health care security.
  America's seniors have waited 38 years for this prescription drug 
benefit to be added to the Medicare Program, and today they are just 
moments away from prescription drug coverage that they desperately need 
and deserve.
  It is clear that in this body there is a bipartisan majority--and I 
would say an overwhelming bipartisan majority--in favor of this 
Medicare Prescription Drug, Improvement, and Modernization

[[Page S15698]]

Act of 2003. Yet we have before us an attempt to block this body from 
expressing, through an up-or-down vote, their will to give seniors and 
individuals with disabilities access to affordable prescription drug 
coverage and, thus, stand in the way of health care security for those 
seniors.
  We are about to vote on a cloture motion in an attempt to overcome 
this filibuster.
  Later today, we are likely to face additional procedural hurdles that 
the minority has threatened to prevent passage of this bill. Make no 
mistake, these are not one and the same. The result of this filibuster 
and of the procedural points of order will be once again to deny these 
40 million seniors access to modern prescription drug coverage, 
something they need and something they deserve.
  In my own State of Tennessee, there are nearly one-quarter of a 
million seniors who right now have no prescription drug coverage. There 
are millions more all across the Nation for whom this legislation 
literally means life or death. Think hypertension, heart disease, 
chronic obstructive pulmonary disease, asthma, or emphysema, all for 
which we have effective prescription drugs which are not made available 
through our Medicare Program today. Our seniors cannot afford to wait 
longer. Then why wait? They cannot afford to wait. It is a matter of 
their health.
  This generation of seniors did survive the Depression, did fight 
World War II, did help make the United States the prosperous and 
thriving Nation we have today. Again and again, they answered the call. 
Now is the time for us to fulfill our duty to that generation. Many of 
them are poor and many of them are sick. It is time to answer their 
call.
  When he signed Medicare into law in 1965, President Johnson said:

       No longer will this Nation refuse the hand of justice to 
     those who have given a lifetime of service and wisdom and 
     labor to the progress of this . . . country.

  Let us not stay this hand of justice now. Let us not turn our back on 
America's seniors and individuals with disabilities. Our seniors 
deserve better than to be held hostage to Washington politics.
  There is a life-or-death issue in many ways in this legislation for 
millions of Americans and they cannot wait. Opponents of this bill 
would deny coverage to essential medicines.
  Mr. President, I will go on leader time for my remaining 2 minutes, 
if necessary.
  The PRESIDING OFFICER. The majority leader.
  Mr. FRIST. What will people tell millions of Americans or millions of 
low-income seniors if we go home and say, no, you are not going to have 
access to prescription drugs that this bill would have made available 
or tell individuals with disabilities, no, you are not going to have 
access to the preventive care that is actually in this bill?
  The elderly, the sick, and the disabled are now being told to wait 
for action in the future. Now is the time to act.
  We will do it next year, some say, but our seniors tell us time is 
running out. People are waiting for help.
  Just 2 days ago in my office was Dorthea Yancy of Lakewood, CO, a 
retired African-American woman who worked for years but lost her 
pension when her company went bankrupt. She needs our help now. Dorthea 
Yancy needs our help now.
  We are an eyelash away from fulfilling our promise to seniors. I ask 
my colleagues not to thwart the overwhelmingly bipartisan majority in 
this body because of using the tactics of some sort of parliamentary 
maneuvering. Do not hold America's seniors hostage to Washington 
politics. Our seniors deserve better.
  I want to close by just reading a statement issued today by the AARP 
on behalf of 35 million seniors that fine organization represents. This 
is from the AARP today, and I will close with this:

       The fate of the landmark Medicare prescription drug bill 
     now stands in the hands of the U.S. Senate. More than a vote 
     is at stake. With the final passage in the Senate, the 
     Congress will honor a longstanding promise to 41 million 
     older and disabled Americans and their families by finally 
     adding a prescription drug benefit to Medicare. This bill 
     will help millions of people, especially those with low 
     incomes and high drug costs. It will strengthen Medicare by 
     adding this long overdue benefit and preserving the basic 
     structure of the Medicare program. We urge the Senate to act 
     to seize this historic opportunity and vote to pass this bill 
     now.

  America's seniors are watching. America is watching. I urge my 
colleagues to do the right thing, to seize this historic opportunity, 
to vote up or down on this bipartisan legislation, and to pass this 
historic bill.


                             Cloture Motion

  The PRESIDING OFFICER. All time has expired. Under the previous 
order, the cloture motion having been presented under rule XXII, the 
Chair directs the clerk to read the motion.
  The bill clerk read as follows:

                             Cloture Motion

       We the undersigned Senators, in accordance with the 
     provisions of rule XXII of the Standing Rules of the Senate, 
     do hereby move to bring to a close debate on the conference 
     report to accompany H.R. 1, the Medicare Prescription Drug 
     and Modernization Act, an act to amend Title XVIII of the 
     Social Security Act to provide for a voluntary prescription 
     drug benefit under the Medicare Program and to strengthen and 
     improve the Medicare Program, and for other purposes.
         Bill Frist, Charles Grassley, John E. Ensign, Ted 
           Stevens, Susan Collins, Lisa Murkowski, Jon Kyl, John 
           Cornyn, Orrin Hatch, Larry Craig, Craig Thomas, Robert 
           Bennett, Olympia J. Snowe, Jim Bunning, Christopher 
           Bond, John Warner.

  The PRESIDING OFFICER. By unanimous consent, the mandatory quorum 
call has been waived. The question is, Is it the sense of the Senate 
that debate on the conference report to accompany H.R. 1 shall be 
brought to a close?
  The yeas and nays are required under the rule.
  The clerk will call the roll.
  The bill clerk called the roll.
  Mr. McCONNELL. I announce that the Senator from Alabama (Mr. Shelby) 
is necessarily absent.
  The PRESIDING OFFICER (Mr. Alexander). Are there any other Senators 
in the Chamber desiring to vote?
  The yeas and nays resulted--yeas 70, nays 29, as follows:

                      [Rollcall Vote No. 457 Leg.]

                                YEAS--70

     Alexander
     Allard
     Allen
     Baucus
     Bennett
     Biden
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Carper
     Chambliss
     Cochran
     Coleman
     Collins
     Conrad
     Cornyn
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dole
     Domenici
     Dorgan
     Ensign
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hatch
     Hutchison
     Inhofe
     Jeffords
     Johnson
     Kohl
     Kyl
     Landrieu
     Lincoln
     Lott
     Lugar
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Nickles
     Pryor
     Reid
     Roberts
     Santorum
     Sessions
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner
     Wyden

                                NAYS--29

     Akaka
     Bayh
     Bingaman
     Boxer
     Byrd
     Cantwell
     Chafee
     Clinton
     Dodd
     Durbin
     Edwards
     Feingold
     Graham (FL)
     Hagel
     Harkin
     Hollings
     Inouye
     Kennedy
     Kerry
     Lautenberg
     Leahy
     Levin
     Lieberman
     McCain
     Reed
     Rockefeller
     Sarbanes
     Schumer
     Stabenow

                             NOT VOTING--1

      
     Shelby
       
  The PRESIDING OFFICER. On this vote, the yeas are 70, the nays are 
29. Three-fifths of the Senators duly chosen and sworn having voted in 
the affirmative, the motion is agreed to.
  The Democratic leader.
  Mr. DASCHLE. Mr. President, for purposes of time management under 
cloture, I designate Senator Reid, the Democratic whip, as the 
opposition manager.
  Mr. President, I make a point of order that H.R. 1, the pending 
conference report, violates section 311(a)(2) and section 302(f) of the 
Congressional Budget Act of 1974, among other reasons, because of the 
provisions related to premium support and health savings accounts.
  The PRESIDING OFFICER. The majority leader.
  Mr. FRIST. Mr. President, on behalf of myself and Senators Grassley, 
Baucus, and Breaux, pursuant to section 904 of the Congressional Budget 
Act of 1974, I move to waive the applicable sections of that act and 
the budget resolution for the consideration of the conference report.

[[Page S15699]]

  The PRESIDING OFFICER. The motion is debatable.
  Mr. FRIST. Mr. President, I ask unanimous consent that there now be 2 
hours of debate on the pending motion to waive, with that debate time 
equally divided between the two leaders or their designees; further, I 
ask consent that following that debate time, the Senate proceed to a 
vote on the motion to waive, with no amendments in order to the motion.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. FRIST. Mr. President, we will shortly begin debate for 2 hours, 
as we just agreed to, after which we will have the vote--approximately 
2 hours from now.
  Mr. DASCHLE. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DASCHLE. Mr. President, obviously the pending motion is now the 
matter before the Senate and the clock is ticking. I want to use some 
of the time at this point and reserve the remainder of time for those 
who wish to speak. I will, hopefully, reserve some time for myself at 
the end of the debate.
  I make this motion recognizing there are a lot of concerns involving 
budgetary considerations on the legislation now pending. Those on the 
other side have expressed their understandable concern about the 
overall commitment in the budget to a new entitlement program, and I 
respect their position. It may be that on that basis alone, many of our 
Republican colleagues will want to vote against the motion to waive a 
budget point of order.
  They will make the case that this is an entitlement that goes way 
beyond the $400 billion, that it is very likely this legislation could 
grow to $600, $800, $900 billion in the very near future, as other 
entitlements have on occasion. That is their right.
  They will argue that this, as a new entitlement, provides very little 
cost control. On that I would agree, and I will come back to that point 
in a moment. So without a doubt, there are very important budgetary 
points of order to be made.
  Technically, this budget point of order challenges the bill because 
it exceeds the 2004 budget authorization. It also challenges the 
allocation of resources within the jurisdiction of the Finance 
Committee. So those are the technical reasons.
  I want to give my reasons for expressing the concern I have 
throughout the debate, and how it relates to this budget point of 
order. I don't challenge the $400 billion. Frankly, I don't think that 
it is adequate to provide a meaningful drug benefit. We have to do 
better than that. But that is another issue. What I challenge is why it 
is we are misallocating so many of the resources within that $400 
billion budget pie. That is my concern; how it is that we can spend $6 
billion on HSAs, health savings accounts, and at the same time tell our 
seniors they are going to have to pay $35 a month, 100 percent of the 
cost for drugs up to $250, 25 percent up to $2,250, 100 percent up to 
$5,100. Why are we going to tell them that when we have all this money 
for these special interests is something I can't understand.
  I can't go to my senior citizens and tell them: You are going to have 
to suck it up and understand that sacrifice is something we are going 
to ask of you for the opportunity of the Government to pay 75 percent 
of your drug costs for a limited period of time throughout the year.
  That is what we are saying. We have money for all these other 
accounts, but we don't have adequate resources dedicated to providing 
meaningful help to seniors. That is my first concern. We are simply not 
allocating the resources within that $400 billion to their maximum 
advantage.
  But there is another concern as well. We all ought to be concerned, 
Republicans and Democrats, about this. We have taken virtually all the 
cost control mechanisms out of this bill. So those who are concerned 
about an exploding entitlement have a right to be concerned about what 
this is going to cost 10 years from now.
  Ten years ago, we passed a bill by unanimous consent. I wish my 
colleagues all could have heard an eloquent speech made by the 
distinguished Senator from Florida about this in our caucus this 
morning. Ten years ago, on a bipartisan basis, we passed legislation 
providing not only a drug benefit to veterans but a cost containment 
mechanism for that benefit. We passed it unanimously. When we passed 
it, we basically said, we are going to allow the Government to 
negotiate the price for the VA, passing on the savings to veterans.
  We have done that. And by most accounts, we have now cut the cost of 
veterans drugs in half. Senator Graham talked about being at a VA 
hospital in Florida on Veterans Day. He said: How much are you spending 
on drugs right now?
  They said: $39 million, at that facility.
  He said: If you couldn't negotiate, if you had no ability to 
negotiate on behalf of your veterans, what do you think the veterans 
would be spending?
  They said: $71 million, almost twice as much.
  How is it we can argue on behalf of veterans that we ought to keep 
their costs down but at the very same time, argue that senior citizens 
ought to bear the full cost of those drugs? You tell senior citizens 
sitting next to another one at a public meeting a year from now that we 
somehow just believed there was a distinction, that it was OK for 
seniors to spend twice as much as veterans.
  I will fight every single day for the right of veterans to get the 
lowest cost for their drugs, but that same opportunity should be 
provided to every senior citizen as well.
  So you are going to see an exploding cost. And you are going to see 
the misallocation of resources within that $400 billion, away from 
seniors and to so many other groups that I have to say even the most 
avid supporters of this legislation would say don't need it as much. Do 
healthy people who have access to an HSA really need help as much as a 
senior citizen who is struggling to pay their bills?
  Isn't there a better way that we can allocate these resources to 
maximize the drug benefit for every citizen in the country today? The 
answer is, of course, yes. Why is it that we saw the need to exclude 
the single demonstrated ability on the part of a Federal program today, 
in the Veterans' Administration, to control the cost of drugs when it 
came to protecting drug prices for senior citizens? Why did we do that?
  Unfortunately, that wasn't the only cost containment mechanism 
excluded. For all intents and purposes, we also took out reimportation. 
We don't have any real authority now to reimport lower cost American-
made drugs into this country. I am told the reason we didn't is because 
the drug companies were overwhelmingly opposed. Keep in mind that a lot 
of these drugs are manufactured inside the United States, exported to 
be retailed outside the United States. So the irony is that drugs made 
inside the U.S. cannot be sold and brought back into the U.S. under 
this bill. I think it is a folly.
  So the bottom line for those who are concerned about the exploding 
cost of an entitlement is this: I have news for you. You have a right 
to be concerned because we have not done anything to control costs in 
this legislation. We are going to woe the day we passed this without 
providing the same mechanism VA has to do just that. We are going to 
woe the day. We are also going to woe the day when we draw distinctions 
between seniors for absolutely no good reason. If it is good enough for 
veterans, it ought to be good enough for senior citizens across the 
board. But the drug companies don't like that either. Because they 
don't like it, it was excluded. So I make these points of order on four 
very specific points.
  No. 1, we are not using that $400 billion we have allocated very 
well. We could do a whole lot better.
  No. 2, there are specific programs in here that don't belong in here 
in the first place, have nothing to do with offering drugs to seniors; 
that are handouts to special interests and have no business in this 
bill.

[[Page S15700]]

  No. 3, we do very little with cost containment. We exclude the most 
consequential leverage the Government has had in the past with a 
program as important as the VA. It passed unanimously on the Senate 
floor 10 years ago. Why is it excluded now? Because there was special 
interest opposition.
  No. 4, we are going to woe the day when we put special interests 
ahead of the senior citizens in making these resource allocations in 
this legislation the way we have.
  Mr. President, we can do better than this. We have to do better than 
this. I hope, on a bipartisan basis, we simply say we are going to ask 
that these provisions, these concerns be renegotiated.
  I was one--and I will end here--who voted in favor of cloture. I am 
not desirous of extending debate unnecessarily and in a prolonged way. 
I wanted to make that point by voting for cloture.
  But I must say, we expedite the day when we do the right thing with 
regard to the costs of drugs and with regard to a new system under 
Medicare. We expedite the day by voting against the motion to waive the 
point of order made by the distinguished majority leader.
  So I hope those who claim fiscal responsibility as an important 
priority, those who want to maximize the bang for the buck for seniors 
in this legislation, those who are concerned about the distinctions we 
draw among senior citizens, will join with those who voted for and 
those who voted against cloture, against waiving this point of order.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico is recognized.
  Mr. DOMENICI. Mr. President, the distinguished Senator in charge left 
the floor and said I could allocate some time to myself. I will not use 
much. I note the presence on the floor of the chairman of the Budget 
Committee. He wants to speak. Clearly, I want to speak for no more than 
7 minutes. I ask that I be advised when I have spoken for 5 minutes.
  The PRESIDING OFFICER. The Senator will be advised.
  Mr. DOMENICI. Mr. President, the Budget and Impoundment Control Act 
will be 30 years old soon--30 years in existence. Many pundits never 
thought it would survive even 1 year. As a freshman Senator, I worked 
along with my colleagues to help bring about the act, and then I was 
honored by this body to serve as chairman for many years.
  Let me say that the drafters of the Budget Act knew it was a bold and 
daring piece of legislation, setting up a whole new way of considering 
legislation in the Congress. As a matter of fact, I am not sure they 
even knew how bold it would be. It, indeed, in many respects, changed 
the way the Senate does business--some for the better, some not so much 
for the better.
  There is one provision that is called reconciliation--a strange 
word--and people wonder what it means. Let me just tell you, without 
trying to take much time, that our distinguished leader had an 
opportunity to move this bill under what is called a reconciliation 
bill. Do you know what that would have done, Mr. President? That would 
have limited debate, and it would have made the bill almost not 
amendable and, indeed, besides that, there would be no points of order. 
He chose, as the bill progressed through, to do otherwise.
  So let me repeat. The drafters recognized the need to provide waivers 
of points of order in this bill. The waivers are just as important as 
the points of order. They are not there just because points of order 
might cause so much damage that you need to waive them. They are there 
because points of order can be a range of things, and the points of 
order can be waived because the Budget Act says you can waive them, 
unless in fact they are important to fiscal responsibility or, in some 
way, violate the soundness of a Budget Act.
  So let's be clear. The budget resolution before us, which we adopted 
back in the spring under the leadership of Senator Nickles, authorized 
spending over the next decade of $400 billion for reform of the 
Medicare Program with prescription drugs. Let me repeat. The fiscal 
dimensions are $400 billion. You would think if you are going to make a 
point of order about this bill being out of line budgetwise, somebody 
would be here saying it spends more than $400 billion, it breaks the 
budget, would you not?
  Most logically, any Senator who says there is a point of order 
against this bill would say, well, we didn't think it spent more than 
was prescribed in the Budget Act. They are right, it didn't.
  As a matter of fact, using technical rules of evaluation, it spent 
less than allowed. It spent $395 billion. You would almost think it 
should get an accolade instead of a point of order. It should get a 
bow, a ribbon instead of a point of order. It spent less than the 
Budget Act, and yet a Budget Act point of order is being raised against 
it. Let me explain.
  I know that members of the committee and the leader himself tried 
their very best to keep this bill under $400 billion, and they 
succeeded. But you had to provide 10 years of estimates, the sum total 
of which could not exceed $400 billion. Are you with me, Mr. President? 
They had to produce a bill with 10 years of estimates, the sum total of 
which did not exceed $400 billion. The sum total of this bill is less 
than the Budget Committee gave them to spend. So it didn't break the 
budget.
  One of the years--1 of the 10 years--they could not make the estimate 
for that year fit the estimate of the 10 years.
  The PRESIDING OFFICER. The Senator has used 5 minutes.
  Mr. DOMENICI. I will complete in 2 minutes.
  The committee could not make this proposal fit in each piece of the 
10 years. In other words, if you look along and keep adding up the 
years, it is $395 billion. But the committee also made some estimates 
by the year, and one of those years is $4 billion high--got it, $4 
billion in an estimating bonanza of $400 billion.
  First of all, everybody knows they are estimates, the best you can 
do. I have had to rely upon them and got accused that I shouldn't have 
relied upon them when I was the budget chairman, but we did. So there 
is one year that is $4 billion off in the estimating of 10 years. But 
every other year is within, which is truly remarkable, and the sum 
total is $395 billion.
  Mr. President, I say to fellow Senators, the truth is the Budget Act 
point of order should not be used for a frivolous matter--$4 billion 
off in 1 year with a $400 billion bill. It should not be used to cure 
technical matters--$4 billion in a 10-year bill of $400 billion. I am 
sure my friend, the chairman of the Budget Committee, will talk about 
some of the other technical issues regarding programs. But the biggest 
issue is fiscal soundness.
  We have from time to time in a Budget Act authorized $300 billion for 
a program over 10 years, and I can tell you, many times a committee 
came back with a bill that was $300 billion, but for each of the 10 
years it didn't fit the number.
  This Senator, as chairman of the Budget Committee, wouldn't have 
dared to get up and say the bill should fail on a point of order 
because it violates the budget and, thus, the Budget Act should be used 
to kill it because they had done a great job and had met the total, but 
you can't, in estimating, make every year hit it right, right on the 
head.
  I submit that a point of order should not be used. The leader's 
waiver of that provision should be sustained because we are using the 
Budget Act to try to kill a Medicare bill that is fiscally as sound as, 
if you are just talking about fiscal soundness, not substance--the 
points of order are not substance; they have to do with dollars--if you 
are just off 1 year out of 10 but not on the total of 10, you should 
not invoke the point of order. It should be waived as requested by the 
majority leader.
  I thank the Senate for the 7 minutes. I yield the floor.
  I note the presence of the chairman of the Budget Committee.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. REID. Mr. President, will the Senator withhold?
  Mr. NICKLES. I will be happy to yield.
  Mr. REID. Mr. President, on our side, Senator Graham will speak for 
10 minutes, Senator Boxer for 5 minutes, Senator Dodd for 5 minutes, 
and Senator Corzine for 5 minutes.
  Mr. NICKLES. Mr. President, I yield myself as much time as I might 
consume.

[[Page S15701]]

  I urge my colleagues to vote to waive the budget point of order. I 
think I am correct--I haven't looked at numbers--I probably voted to 
make more points of order than almost anybody, maybe with the exception 
of my very good friend, the past chairman of the Budget Committee. I 
have always tried to maintain the integrity of the budget, but I think 
what we have here is a way of people saying: Let's vote for cloture, 
but maybe we can kill this bill indirectly; we will do it with a budget 
point of order and not to save money.
  I wish the people were really concerned about the fiscal integrity of 
Medicare, but I don't think that is what is behind the proponents of 
these budget points of order.
  As a matter of fact, in looking at past records, Senator Daschle, who 
made the budget point of order, has moved to waive a budget point of 
order 56 out of 60 times. Senator Kennedy has moved to waive a budget 
point of order 54 out of 57 times that he voted. In other words, some 
97 percent of the time they always moved to waive the budget rules. I 
have always been on the opposite side. I am going to be on the opposite 
side of them this time because, frankly, I think they are just trying 
to kill the bill so the bill will come back later with more costs and 
be a lot more irresponsible.
  If my memory serves me correctly, when we debated the budget this 
year on the floor of the Senate, there was an amendment to increase the 
$400 billion authorization or the reserve fund we put in the budget for 
prescription drugs and to improve Medicare. I believe Senator Kennedy 
and Senator Daschle supported an amendment to increase that figure to 
$600 billion. They were not successful.
  My point is I think their effort today is not because they are 
concerned about this bill costing too much money. I think they are 
trying to figure out a way to bring this bill down so it can come back 
and cost more money. I just mention that.
  What about the point of order? The budget said we would have up to 
$400 billion to spend for improving and strengthening Medicare, 
including providing prescription drugs. The bill that was reported out, 
according to CBO, meets that target. It scores at $395 billion. I 
happen to think it is going to cost more than that, but it is compliant 
with the rules set by the Budget Committee on its total spending and 
scored by the Congressional Budget Office.
  There is a violation or budget point of order in 2004. What do I mean 
by that? It scores $3 billion more in 2004. What that relates to is 
when we pass a budget, we allocate so much money to each committee each 
year, and the Finance Committee has already spent all of its money. It 
spent all of its money because we passed unemployment compensation--a 
total of $4.7 billion in unemployment compensation in 2004 not assumed 
in the Budget Resolution. We spent an additional $10 billion in aid to 
the States that was not assumed in the budget resolution. There are 
some other things that we didn't do, so the Finance Committee is out of 
compliance now by about $3 billion with this bill.
  What does this bill do in 2004 that costs money? The prescription 
drug proposal doesn't really get started in 2004 with the exception of 
the prescription discount drug card. The card, which offers all seniors 
a 15-, 20- or 25-percent of immediate savings in January of 2004 and 
provides a $600 benefit for low-income seniors. Seniors who have 
incomes less than 135 percent of poverty will get a card. I believe 
that card will be authorized in January of 2004 for $600. The 
beneficiary would have to make a copayment of 10 percent. So that costs 
money in 2004. I don't hear the opponents seeking to delay immediate 
relief for seniors and low-income seniors.
  Further, there are other items that cost money in 2004. Providers 
receive assistance. Providers, who do I mean? I mean doctors, 
hospitals, rural hospitals--provisions that are supported very strongly 
by Members of both parties--rural add-ons, and so on. That is the bulk 
of this money, $3.8 billion. So if people don't want to spend that 
money, that is of interest, but my guess is that is not really the 
case.
  My guess is people want to spend the money for rural health care 
areas.
  I then heard the Democratic leader indicate his concern was also on 
the revenue side of the budget. There is a point of order because of 
health savings accounts. That is a $160 million revenue loss in 2004.
  I understand some people do not like that particular provision of the 
bill. I happen to think it is a very good provision of the bill. If the 
supporters of this point of order prevail then the entire Medicare bill 
is going to be pulled down. Am I right to assume that their goal is to 
ensure that there will be no prescription drug coverage for low-income 
seniors because of that provision? I do not think so.
  Now folks are stating that the bill has no cost containment. Well, I 
believe we have very different meanings of those words. The proponents 
of the point of order consider government price controls to be 
effective cost containment tools. I do not agree. I do agree that the 
legislation lacks real cost containment--I heard Senator Daschle say we 
did not have cost containment. This Senator worked very hard to get 
real cost containment. I wanted to put cost containment in that would 
require a supermajority vote to worsen Medicare's financial condition. 
If any future Congress had legislation before the body which would make 
the fiscal problems of Medicare, which are already significant, worse, 
there would be a vote, a 60-vote point of order. I was not successful 
in convincing our colleagues to include that fiscal restraint.
  In fact, my primary opponent in creating real cost containment was 
Senator Baucus. He kept saying: I cannot pass that in my caucus. That 
will never pass. That is a nonstarter. You cannot get a supermajority 
on this entitlement. You will be curbing the growth of this 
entitlement. That is not done for other entitlements. I heard it over 
and over. We debated it for a long time. Well, the facts are that it is 
done for other entitlements. We have this rule in place today for 
Social Security. Social Security's entitlement status has never been in 
question as a result of a supermajority requirement.
  I was not successful in getting stronger cost containment than what 
we have in this bill. I regret that. I wish that we would. I would be 
happy to pursue that in subsequent budget resolutions with the Democrat 
leader, but we were not successful in getting it in this package. I 
think the proponents of this point of order are not serious in their 
effort to control costs. In fact I am puzzled as to why the proponents 
of this point of order voted for cloture. Instead of opposing cloture 
they are trying to get around it the other way and say, we will just 
use a 60-vote budget point of order.
  Seriously, I do not think their efforts are about budgets. I think it 
is a way to try and kill this bill. I may not support final passage of 
the bill because I am concerned about the total cost of the bill. But I 
do not think it should be because we are spending some money for rural 
hospitals or for doctors. I think doctors are getting like $600 million 
in 2004; rural hospitals and other providers are receiving money in 
2004; and health savings accounts reduce revenues by $160 million in 
2004.
  The real reason the Finance Committee has exceeded its allocation in 
2004 is because we spent $4.3 billion for unemployment compensation and 
because we spent $10 billion for aid to the States in 2004, neither of 
which were in the original budget resolution.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. I will yield time in just a moment to my colleagues. 
First, I will respond briefly to a point made by the distinguished 
Senator from New Mexico, Mr. Domenici. I am sorry he is not on the 
Senate floor. I wanted to respond to a comment he made. He said this 
was a frivolous point of order.
  I remind my colleagues, this is precisely the point of order made by 
Senator Grassley and Senator Frist on two different motions last year. 
So I argue if it was appropriate last year, it would be appropriate 
this year. If it is frivolous this year, it would have been frivolous 
last year. Yet the distinguished Senator from New Mexico, and I might 
add, of course, my friend the distinguished Senator from Oklahoma, both 
voted in favor of the points of order last year when that precise point 
of order was made.

[[Page S15702]]

  I ask unanimous consent that the rollcall involving both points of 
order be printed in the Record at this time.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         U.S. Senate Rollcall Votes 107th Congress--2nd Session

       As compiled through Senate LIS by the Senate Bill Clerk 
     under the direction of the Secretary of the Senate


                              vote summary

       Question: On the Motion (Motion to Waive CBA re: Graham 
     Amdt. No. 4309).
       Vote Number: 186.
       Vote Date: July 23, 2002, 02:54 PM.
       Required For Majority: 3/5.
       Vote Result: Motion Rejected.
       Amendment Number: S. Amdt. 4309 to S. 812 (Greater Access 
     to Affordable Pharmaceuticals Act of 2002).
       Statement of Purpose: To amend the XVIII of the Social 
     Security Act to provide coverage of outpatient prescription 
     drugs under the Medicare program.


                              Vote Counts

       YEAs: 52.
       NAYs: 47.
       Not Voting: 1.


                      alphabetical by Senator Name

     Akaka (D-HI), Yea
     Allard (R-CO), Nay
     Allen (R-VA), Nay
     Baucus (D-MT), Yea
     Bayh (D-IN), Yea
     Bennett (R-UT), Nay
     Biden (D-DE), Yea
     Bingaman (D-NM), Yea
     Bond (R-MO), Nay
     Boxer (D-CA), Yea
     Breaux (D-LA), Yea
     Brownback (R-KS), Nay
     Bunning (R-KY), Nay
     Burns (R-MT), Nay
     Byrd (D-WV), Yea
     Campbell (R-CO), Nay
     Cantwell (D-WA), Yea
     Carnahan (D-MO), Yea
     Carper (D-DE), Yea
     Chafee (R-RI), Nay
     Cleland (D-GA), Yea
     Clinton (D-NY), Yea
     Cochran (R-MS), Nay
     Collins (R-ME), Nay
     Conrad (D-ND), Yea
     Corzine (D-NJ), Yea
     Craig (R-ID), Nay
     Crapo (R-ID), Nay
     Daschle (D-SD), Yea
     Dayton (D-MN), Yea
     DeWine (R-OH), Nay
     Dodd (D-CT), Yea
     Domenici (R-NM), Nay
     Dorgan (D-ND), Yea
     Durbin (D-IL), Yea
     Edwards (D-NC), Yea
     Ensign (R-NV), Nay
     Enzi (R-WY), Nay
     Feingold (D-WI), Yea
     Feinstein (D-CA), Yea
     Fitzgerald (R-IL), Yea
     Frist (R-TN), Nay
     Graham (D-FL), Yea
     Gramm (R-TX), Nay
     Grassley (R-IA), Nay
     Gregg (R-NH), Nay
     Hagel (R-NE), Nay
     Harkin (D-IA), Yea
     Hatch (R-UT), Nay
     Helms (R-NC), Not Voting
     Hollings (D-SC), Yea
     Hutchinson (R-AR), Nay
     Hutchison (R-TX), Nay
     Inhofe (R-OK), Nay
     Inouye (D-HI), Yea
     Jeffords (I-VT), Yea
     Johnson (D-SD), Yea
     Kennedy (D-MA), Yea
     Kerry (D-MA), Yea
     Kohl (D-WI), Yea
     Kyl (R-AZ), Nay
     Landrieu (D-LA), Yea
     Leahy (D-VT), Yea
     Levin (D-MI), Yea
     Lieberman (D-CT), Yea
     Lincoln (D-AR), Yea
     Lott (R-MS), Nay
     Lugar (R-IN), Nay
     McCain (R-AZ), Nay
     McConnell (R-KY), Nay
     Mikulski (D-MD), Yea
     Miller (D-GA), Yea
     Murkowski (R-AK), Nay
     Murray (D-WA), Yea
     Nelson (D-FL), Yea
     Nelson (D-NE), Yea
     Nickles (R-OK), Nay
     Reed (D-RI), Yea
     Reid (D-NV), Yea
     Roberts (R-KS), Nay
     Rockefeller (D-WV), Yea
     Santorum (R-PA), Nay
     Sarbanes (D-MD), Yea
     Schumer (D-NY), Yea
     Sessions (R-AL), Nay
     Shelby (R-AL), Nay
     Smith (R-NH), Nay
     Smith (R-OR), Nay
     Snowe (R-ME), Nay
     Specter (R-PA), Nay
     Stabenow (D-MI), Yea
     Stevens (R-AK), Nay
     Thomas (R-WY), Nay
     Thompson (R-TN), Nay
     Thurmond (R-SC), Nay
     Torricelli (D-NJ), Yea
     Voinovich (R-OH), Nay
     Warner (R-VA), Nay
     Wellstone (D-MN), Yea
     Wyden (D-OR), Yea


                        Grouped by Vote Position

                                YEAs--52

     Akaka (D-HI)
     Baucus (D-MT)
     Bayh (D-IN)
     Biden (D-DE)
     Bingaman (D-NM)
     Boxer (D-CA)
     Breaux (D-LA)
     Byrd (D-WV)
     Cantwell (D-WA)
     Carrahan (D-MO)
     Carper (D-DE)
     Cleland (D-GA)
     Clinton (D-NY)
     Conrad (D-ND)
     Corzine (D-NJ)
     Daschle (D-SD)
     Dayton (D-MN)
     Dodd (D-CT)
     Dorgan (D-ND)
     Durbin (D-IL)
     Edwards (D-NC)
     Feingold (D-WI)
     Feinstein (D-CA)
     Fitzgerald (R-IL)
     Graham (D-FL)
     Harkin (D-IA)
     Hollings (D-SC)
     Inouye (D-HI)
     Jeffords (I-VT)
     Johnson (D-SD)
     Kennedy (D-MA)
     Kerry (D-MA)
     Kohl (D-WI)
     Landrieu (D-LA)
     Leahy (D-VT)
     Levin (D-MI)
     Lieberman (D-CT)
     Lincoln (D-AR)
     Mikulski (D-MD)
     Miller (D-GA)
     Murray (D-WA)
     Nelson (D-FL)
     Nelson (D-NE)
     Reed (D-RI)
     Reid (D-NV)
     Rockefeller (D-WV)
     Sarbanes (D-MD)
     Schumer (D-NY)
     Stabenow (D-MI)
     Torricelli (D-NJ)
     Wellstone (D-MN)
     Wyden (D-OR)

                                NAYs--47

     Allard (R-CO)
     Allen (R-VA)
     Bennett (R-UT)
     Bond (R-MO)
     Brownback (R-KS)
     Bunning (R-KY)
     Burns (R-MT)
     Campbell (R-CO)
     Chafee (R-RI)
     Cochran (R-MS)
     Collins (R-ME)
     Craig (R-ID)
     Crapo (R-ID)
     DeWine (R-OH)
     Domenici (R-NM)
     Ensign (R-NV)
     Enzi (R-WY)
     Frist (R-TN)
     Gramm (R-TX)
     Grassley (R-IA)
     Gregg (R-NH)
     Hagel (R-NE)
     Hatch (R-UT)
     Hutchinson (R-AR)
     Hutchison (R-TX)
     Inhofe (R-OK)
     Kyl (R-AZ)
     Lott (R-MS)
     Lugar (R-IN)
     McCain (R-AZ)
     McConnell (R-KY)
     Murkowski (R-AK)
     Nickles (R-OK)
     Roberts (R-KS)
     Santorum (R-PA)
     Sessions (R-AL)
     Shelby (R-AL)
     Smith (R-NH)
     Smith (R-OR)
     Snowe (R-ME)
     Specter (R-PA)
     Stevens (R-AK)
     Thomas (R-WY)
     Thompson (R-TN)
     Thurmond (R-SC)
     Voinovich (R-OH)
     Warner (R-VA)

                             NOT VOTING--1

       
     Helms (R-NC)
       


                         grouped by home state

     Alabama:
       Sessions (R-AL), Nay
       Shelby (R-AL), Nay
     Alaska:
       Murkowski (R-AK), Nay
       Stevens (R-AK), Nay
     Arizona:
       Kyl (R-AZ), Nay
       McCain (R-AZ), Nay
     Arkansas:
       Hutchinson (R-AR), Nay
       Lincoln (D-AR), Yea
     California:
       Boxer (D-CA), Yea
       Feinstein (D-CA), Yea
     Colorado:
       Allard (R-CO), Nay
       Campbell (R-CO), Nay
     Connecticut:
       Dodd (D-CT), Yea
       Lieberman (D-CT), Yea
     Delaware:
       Biden (D-DE), Yea
       Carper (D-DE), Yea
     Florida:
       Graham (D-FL), Yea
       Nelson (D-FL), Yea
     Georgia:
       Cleland (D-GA), Yea
       Miller (D-GA), Yea
     Hawaii:
       Akaka (D-HI), Yea
       Inouye (D-HI), Yea
     Idaho:
       Craig (R-ID), Nay
       Crapo (R-ID), Nay
     Illinois:
       Durbin (D-IL), Yea
       Fitgerald (R-IL), Yea
     Indiana:
       Bayh (D-IN), Yea
       Lugar (R-IN), Nay
     Iowa:
       Grassley (R-IA), Nay
       Harkin (D-IA), Yea
     Kansas:
       Brownback (R-KS), Nay
       Roberts (R-KS), Nay
     Kentucky:
       Bunning (R-KY), Nay
       McConnell (R-KY), Nay
     Louisiana:
       Breaux (D-LA), Yea
       Landrieu (D-LA), Yea
     Maine:
       Collins (R-ME), Nay
       Snowe (R-ME), Nay
     Maryland:
       Mikulski (D-MD), Yea
       Sarbanes (D-MD), Yea
     Massachusetts:
       Kennedy (D-MA), Yea
       Kerry (D-MA), Yea
     Michigan:
       Levin (D-MI), Yea
       Stabenow (D-MI), Yea
     Minnesota:
       Dayton (D-MN), Yea
       Wellstone (D-MN), Yea
     Mississippi:
       Cochran (R-MS), Nay
       Lott (R-MS-) Nay
     Missouri:
       Bond (R-MO), Nay
       Carnahan (D-MO), Yea
     Montana:
       Baucus (D-MT), Yea
       Burns (R-MT), Nay
     Nebraska:
       Hagel (R-NE), Nay
       Nelson (D-NE), Yea
     Nevada:
       Ensign (R-NV), Nay
       Reid (D-NV), Yea
     New Hampshire:
       Gregg (R-NH), Nay
       Smith (R-NH), Nay
     New Jersey:
       Corzine (D-NJ), Yea
       Torricelli (D-NJ), Yea
     New Mexico:
       Bingaman (D-NM), Yea
       Domenici (R-NM), Nay
     New York:
       Clinton (D-NY), Yea
       Schumer (D-NY), Yea
     North Carolina:
       Edwards (D-NC), Yea
       Helms (R-NC), Not Voting
     North Dakota:
       Conrad (D-ND), Yea
       Dorgan (D-ND), Yea
     Ohio:
       DeWine (R-OH), Nay
       Voinovich (R-OH), Nay
     Oklahoma:

[[Page S15703]]

       Inhofe (R-OK), Nay
       Nickles (R-OK), Nay
     Oregon:
       Smith (R-OR), Nay
       Wyden (D-OR), Yea
     Pennsylvania:
       Santorum (R-PA), Nay
       Specter (R-PA), Nay
     Rhode Island:
       Chafee (R-RI), Nay
       Reed (D-RI), Yea
     South Carolina:
       Hollings (D-SC), Yea
       Thurmond (R-SC), Nay
     South Dakota:
       Daschle (D-SD), Yea
       Johnson (D-SD), Yea
     Tennessee:
       Frist (R-TN), Nay
       Thompson (R-TN), Nay
     Texas:
       Gramm (R-TX), Nay
       Hutchison (R-TX), Nay
     Utah:
       Bennett (R-UT), Nay
       Hatch (R-UT), Nay
     Vermont:
       Jeffords (I-VT), Yea
       Leahy (D-VT), Yea
     Virginia:
       Allen (R-VA), Nay
       Warner (R-VA), Nay
     Washington:
       Cantwell (D-WA), Yea
       Murray (D-WA), Yea
     West Virginia:
       Byrd (D-WV), Yea
       Rockefeller (D-WV), Yea
     Wisconsin:
       Feingold (D-WI), Yea
       Kohl (D-WI), Yea
     Wyoming:
       Enzi (R-WY), Nay
       Thomas (R-WY), Nay

  Mr. DASCHLE. I yield 10 minutes to the distinguished Senator from 
Florida.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM of Florida. Mr. President, given my expanded amount of 
time, I would like to talk about two aspects of this. In 2001, first 
with Senators Zell Miller and Ted Kennedy, and then with Senator Gordon 
Smith, I offered variations of a prescription drug bill to this Senate. 
In the case of the first legislation, there was, in fact, a point of 
order, precisely the one that is now before the Senate, offered against 
both of those provisions.
  In the first instance, the vote to waive the point of order was 52, 
so the bill had a majority of the Members of the Senate prepared to 
support it, which would have meant we would not be having this debate 
today because senior citizens and disabled Americans would be going to 
the drugstore and getting their prescription drugs today.
  The second bill which Senator Smith and I offered was very similar in 
structure to the one that is in this current legislation; I would say 
somewhat better and more public spirited but similar.
  On that bill, there were 50 votes exactly not to waive the point of 
order. So this is not a unique, unusual, or inappropriate motion to 
make. It was made twice in 2001. In the one case, it denied passage of 
legislation. In the other case, on virtually the same bill we have 
before us today, it denied us the opportunity because we could not get 
the 60 votes in order to override the point of order.
  What I really want to talk about, however, is the last point that my 
friend and fellow-departing Member of the Senate, Mr. Nickles, just 
said, and that was about the issue of cost containment. Senator Nickles 
has a definition of cost containment. That definition is that we will 
impose limits on the amount of funds which can be spent on the Medicare 
Program, the most prominently suggested approach being to say that if 
more than 45 percent of the nontrust fund monies of the Federal 
Government are going to be spent on Medicare, then there will be a 
complex Rube Goldberg of votes and countervotes to determine if that 
can occur.
  If those limits are imposed, then the only way that 45-percent excess 
can be replaced are through things which are clearly going to be very 
onerous upon the Medicare beneficiaries, such as increasing the payroll 
tax or increasing the amount of premiums that seniors would pay.
  The idea that we might go to general revenue as the means of meeting 
that excess is not allowable. It has to come out of the Medicare 
Program itself.
  I have a different definition of what a cost control ought to be, and 
it is not a bureaucratic maze. It is a very straightforward, 
capitalist, free enterprise, marketplace approach. It also is not a new 
idea. In the early 1990s, this Senate passed legislation which 
authorized the administrator of the Veterans' Administration to 
negotiate with pharmaceutical companies on behalf of the VA. That bill 
was sponsored by Senator Alan Simpson, retired Republican from Wyoming; 
Senator and now-Governor Frank Murkowski of Alaska; retired Senator 
Alan Cranston from California, and our colleague today, Senator Jay 
Rockefeller. Those were the four sponsors.
  When the bill came before the Senate, there was not a request for a 
recorded vote. It passed unanimously. So that does not sound like it 
was a very radical bill, given who its sponsors were, or that it raised 
any great cries in the Senate.
  What has happened over the intervening decade plus since this 
legislation was passed? Well, here is a chart that shows some of the 
common prescriptions which are now being purchased by the VA under this 
legislation. Let us take one which I happen to know well because I take 
it myself, and that is Zocor. It was designed to control high 
cholesterol.
  On Veterans' Day of this year, I spent the day at the VA hospital in 
Miami. A lot of the day was spent in the pharmaceutical dispensing 
area. I asked the question: What are you paying for Zocor? Well, the 
answer was 66 cents a tablet. I then asked what would it be if they 
went to the drugstore and bought the same identical tablet. It was 
$3.77.
  I said: Is that illustrative of the kind of discounts you are able to 
negotiate? The answer was: No, it frankly is a little bit deeper than 
average. We, this year, will dispense about $39 million of prescription 
drugs through the Miami VA. I asked: If you went down to the drugstore 
and bought it at the same price that, for instance, seniors under 
Medicare would pay, what would it cost? It was $81 million. So there is 
more than a 50 percent discount--in some cases much more dramatic 
discounts.
  The question that I think we should anticipate, so we had better 
ready with an answer, is the question: Why, in light of the success of 
the VA in providing for its 27 million eligibles--why do we have this 
in this legislation, under the clause ``noninterference?''
  I might correct a statement I made yesterday when I said it was on 
page 54. In the final version of the printed conference report it is 
moved to page 53, lines 18 through 26. Here is what those lines say:

       Noninterference. In order to promote competition under this 
     part and in carrying out this part, the Secretary--[who was 
     in the Chamber just a few moments ago]--(1) may not interfere 
     with the negotiations between drug manufacturers and 
     pharmacies and PDP--[which is the drug-only insurance policy] 
     sponsors; and (2) may not require a particular formulary or 
     institute a price structure for the reimbursement of covered 
     part D drugs.

  What all that legalese means is that we are about to prohibit the 
Secretary of HHS from using the tremendous bargaining power which 
Medicare has, similar to the Veterans Administration, to accomplish for 
Medicare beneficiaries the same cost control that we are now achieving 
in the Veterans Administration.
  Some people say: Why are we doing this? What is the reason we would 
have such diametrically different policies for two very similar groups 
of Americans?
  One answer was: Well, veterans, they are a special class. There are 
not as many veterans; therefore, they will not have the impact.
  I agree, veterans are a special group of Americans. They deserve to 
be honored. But so are the other members of the greatest generation. So 
are the wives who stayed home with the children while their husbands 
were fighting abroad.
  The fact is, there are 27 million veterans eligible to get these 
reduced costs. When we pass this Medicare bill, until such time--and I 
am afraid it will not be very long--that we see a mass retreat of 
private pre-employers--that is the persons, the businesses that used to 
employ the current retirees--start to drop coverage--until that 
happens, there will be about 10 million to 12 million of the 40 million 
Medicare beneficiaries who are likely to take most advantage of this 
prescription drug benefit.
  You can't tell me if 27 million veterans can take advantage of this 
program, and they have not brought the

[[Page S15704]]

pharmaceutical industry to its knees, that 10 to 12 million Medicare 
beneficiaries are going to cause that to occur.
  The PRESIDING OFFICER (Mr. Graham of South Carolina). The Senator has 
used 10 minutes.
  Mr. GRAHAM of Florida. I ask for an additional 5 minutes.
  Mrs. BOXER. Reserving the right to object--of course, I will not 
object--I would like to be the next Democrat on the list to speak 
because Senator Daschle had committed that to me but he is not in the 
Chamber at this time. I ask unanimous consent that I be the next 
Democrat to speak, up to 7 minutes, after Senator Graham, and of course 
yielding to the other side.

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRAHAM of Florida. There is a question more serious than the 
question I just asked, and that is, How do we answer the question? This 
is Ms. Kitterage. She is 75 years old. She lives in Tamarac, FL. She 
has about $4,900 a year expenses over a range of prescription drugs. 
That is her annual expense. Here you see some of the vials of her 
prescription drugs.
  This is not the case--at least I don't know it to be the case--but 
let's assume that Ms. Kitterage either is married or is a widow and 
that her husband was about her age, which would have meant that he 
would quite possibly have been one of our brave soldiers in the Korean 
war. As such, he would be eligible, as one of the veterans, to get the 
VA discounts. She is not eligible today. Because of this provision we 
are proposing to put into law, she will not be eligible in the future 
to get the benefit of Medicare's tremendous purchasing power.
  I want to just leave this question. When we stand up before an 
audience of elderly Americans and Ms. Kitterage comes and asks this 
question: My husband is the same age I am; why is he able to buy 
prescription drugs at half the price that I have to pay because he can 
do it at the VA, that is the question we are going to be required to 
answer. I would like to offer that to my colleagues for a response. 
Would somebody please tell me what is the public policy that justifies 
utilizing the purchasing power of the VA to get these kinds of 
discounts?
  Yet to the wives of the veterans we say: You have to pay the full 
amount. I can't find a justifiable reason for that.
  I am a capitalist. I am a free enterpriser. I am a marketplace 
person. I don't believe in socialism. Why should we bring the 
marketplace to the veterans but bring the red flag of socialism to 
Medicare? I hope, during the course of this debate, we can engage on 
this issue because I think it is maybe the most central issue. If we 
did this one thing, if we eliminated this specific paragraph and wrote 
in the language that we did over 10 years ago for the VA, we would be 
doing the seniors of America a greater benefit than anything we are 
considering and we would be saving the American taxpayers an enormous 
amount of money, therefore avoiding further additions to our national 
debt.
  The PRESIDING OFFICER. The Senator has used his additional time.
  Mr. GRAHAM of Florida. Mr. President, I leave that question with you 
and hope during the course of this debate we will be engaged in 
answering.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, first of all, I should find out how much 
time we have left.
  The PRESIDING OFFICER. You have 43 minutes.
  Mr. GRASSLEY. I yield myself such time as I might consume.
  This may sound like a simple vote, to raise a point of order about a 
budget and how this fits into the budget. But what this vote is all 
about is whether or not we are going to have any bill whatsoever 
providing prescription drugs for seniors. That is what this next vote 
is all about because I believe if we get 60 votes like we did 70 votes 
on the cloture motion, we will be on our way to passage, in a 
bipartisan way--everything has been bipartisan on this bill, as far as 
I am concerned--in a bipartisan way, passage of this bill, so our 
seniors can have prescription drugs, so that the biggest hole that has 
ever existed in Medicare for the last 38 years is filled in.
  So all the arguments can be made about this little budget deal or 
that little budget technicality, but this is a vote about keeping the 
promises of both political parties over the last three elections. I do 
not think we ought to pooh-pooh keeping the promises of the last 
election. People are cynical about political leaders anyway--
overpromising, not delivering on promises. This is our opportunity. 
This is one of the last two votes for this bill to go to the President 
of the United States.
  So this vote is about our seniors, and also we can include Americans 
with disabilities. So a successful vote against overriding this point 
of order will gut the immediate funding we provide for prescription 
drug discount cards.
  Much has been said by the opponents of this bill about not providing 
help to seniors fast enough. How many times, in the last 3 days, 4 days 
of debate on this bill have you heard the point: ``Well, this bill is 
not going to take effect for 2 years. I don't know why it can't take 
effect sooner''?
  Now, that is not our choice. We pass a bill. You have to give some 
time for bureaucrats to implement it and write the regulations, and you 
want to do it right. So that is what they say: They need that amount of 
time, No. 1. No. 2, this bill takes effect immediately for part of it, 
and that part is the drug discount card for seniors and the disabled so 
they can get 15 to 25 percent discounts on drugs right away.
  So apparently a discount card available to all seniors in less than 5 
months, and also with a direct $600 subsidy to those with the lowest 
incomes, is something that opponents of this bill--crying in their beer 
all the time about this not doing enough for seniors or not taking 
effect soon enough--is a reason to block this bill.
  They are talking out of both sides of their mouth when they say that. 
On the one hand, they say it is not going into effect soon enough, and 
then with the next vote we are going to have up, they are going to 
guarantee no drug benefit for years, and just with some little budget 
technicality on a procedure vote.
  That is pretty ironic, that they would take that stand over the 
course of 4 days--argue that this bill is not going into effect soon 
enough, ignoring the discount card that starts immediately, and saying 
we are not doing enough--and then they are willing to block it on a 
technicality.
  It seems to me that anybody who says we are not providing drug 
benefits quickly enough for our seniors and our disabled would vote to 
override this point of order so we can get to the next vote, final 
passage of this legislation.
  Also, I just heard some of my colleagues from the other side of the 
aisle say this bill, in some instances, does not do enough for rural 
health care delivery. We provide $25 billion in this bill for rural 
providers to deal with the inequitable situation of the 30 States below 
the national average. That is because the formulas for doctors and 
hospitals in rural areas treat them less well, less equitably than the 
formulas for urban areas, because the assumption is in rural areas you 
can deliver health care for less costs.
  But they are crying in their beer about maybe that is not doing well 
enough. And if they vote as 1 of the 41 who might keep us from 
overriding that point of order, then how can they talk out of both 
sides of their mouth--one time saying, ``We are not doing enough,'' and 
then, on the other hand, ``Kill this bill on this budget 
technicality''? Because just as soon as this bill passes, rural 
providers are going to get a great deal of help from this legislation.

  Now, that help is not just for our providers because we feel sorry 
for doctors or hospitals. We are not being able to recruit doctors and 
maintain our hospitals in rural America. This $25 billion in this bill 
will strengthen our hospitals. It will give us an opportunity to 
recruit doctors.
  So if you are 1 of the 41 who does not help us override this point of 
order, you are saying no to the recruitment of doctors in rural 
America. You are saying it is OK to close rural hospitals. Because you 
know what is going to happen right away if we do not pass this 
legislation--all the doctors of America are going to take a 4.5-percent 
cut in their reimbursement because of the way our formulas work. I do 
not

[[Page S15705]]

know how formulas such as that were written, but those formulas have an 
egregious impact upon the doctors.
  I strongly disagree that that ought to happen and that we ought to 
have situations where medical doctors are fed up with working with 
Medicare patients and they just get out of the program. Then our 
seniors have fewer doctors to take care of their needs.
  But if this bill passes, it is going to give relief to our doctors, 
not only stopping that 4.5-percent cut, it will give them a 1.5-percent 
increase in reimbursement.
  It seems to me a vote against overriding the point of order is a vote 
against our rural hospitals every day because every day our hospitals 
are doing more with less. They serve our elderly. They serve the 
uninsured, those who live in some of the remotest parts of our country, 
and those who live in our cities as well because city hospitals have 
problems, too.
  Are we going to tell those hospitals what they do every day in saving 
lives and improving patients' quality of life is not somehow important? 
I certainly hope not. But a vote against overriding this point of order 
is a thumb in the eyes of health care providers, in the eyes of the 
people who run our hospitals, the nurses who work there.
  So this is going to be a vote against some of our neediest seniors. 
And the neediest of our seniors are those in nursing facilities who 
need physical therapy. They need occupational therapy, speech therapy. 
This bill, out of this $25 billion, provides a 2-year moratorium from 
the therapy cap that is in law today, which, basically, at $1,500 is 
saying, if you have a stroke, if you have some sort of major operation, 
you are only going to get physical therapy up to $1,500; and too bad 
after that.
  Well, we take care of that in this legislation. But the people who 
vote against overriding this point of order are saying no to those 
neediest of seniors in the nursing homes who will be hit by this $1,500 
cap and will not be able to get the physical therapy services they 
need.
  We are at a point where all this effort about rural hospitals has 
been supported by an overwhelming majority in both the House and the 
Senate.
  We heard our colleague, Senator Bennett of Utah, speak passionately 
about his daughter. His daughter is a speech therapist and knows all 
too well how nursing home residents benefit from therapies after they 
have suffered a stroke, heart attack, or maybe just a fall. Are we 
going to say to Senator Bennett's daughter that we don't need to delay 
these caps? Are we going to say to our seniors that access to physical 
therapy doesn't matter? I certainly hope not.
  You will hear a lot about this vote being a comment on how we spend 
money in this Medicare bill. You will hear how this vote might be a 
vote against special interests in America. I ask my colleagues what 
they mean because if their seniors need immediate relief from high 
prescription drug bills, their hometown doctors need some help, their 
local hospitals need some help, their seniors recovering from stroke 
and heart attack need some help because they need more therapy, then I 
guess they should vote against these people.
  That isn't what I hear from the other side of the aisle. They are the 
great humanitarians of the American political environment. They are 
concerned about all these people. Well, this next vote will show how 
concerned they are because they are voting against all these people who 
have need, most often the seniors of America who need prescription 
drugs.
  I do not intend to vote against them and, in the process, hopefully 
get this bill to final passage.
  I reserve the remainder of my time and yield the floor.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, the Senator from California has already been 
recognized to speak for 5 minutes. Following the Senator from 
California, I ask unanimous consent that Senator Dodd be recognized, 
and following that, Senator Corzine be recognized for 5 minutes, and 
following that Senator Durbin for 5 minutes.
  The PRESIDING OFFICER. It is the understanding of the Chair that 
Senator Boxer was going to be recognized for 7 minutes.
  Mr. REID. That is correct.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from California.
  Mrs. BOXER. Mr. President, let me tell you where we are because 
people watching this debate may be confused on what has happened. On 
our side we have made a point of order against this bill because it 
busts the budget. Know where does it bust the budget? Does it bust the 
budget by giving a more generous prescription drug plan to our seniors? 
No. It busts the budget by giving away billions of dollars to the HMOs. 
It also busts the budget because it allows a big deduction from the 
wealthiest and healthiest people to set up what they call HSAs, health 
service accounts, and to be able to deduct that money. What that does 
is, it raises the premiums for everybody else, taking those people out 
of the insurance pool.
  So make no mistake about it, when the Senator from Iowa says we are 
terrible on our side because we don't want to spend more money, we are 
willing to spend the funds on the senior citizens' prescription drug 
benefit. We are not willing to throw it away on HMOs and on the tax 
breaks for the wealthiest people who are already doing just fine, thank 
you very much.
  Having said that, there is a real benefit to ensuring that this bill 
stops in its tracks by supporting this point of order. In order to do 
that, we have to vote no on the motion to waive it. So if we prevail, 
if the other side does not get 60 votes, this bill will go back and get 
started again. It will come back to us with a better prescription drug 
plan. It will come back to us with less confusion, less bureaucracy and 
the rest.
  The underlying bill hurts seniors; 6 million of them will pay more 
for prescriptions than they do today. There is a cruel asset test in 
here where you may have to sell off your wedding band to get help. You 
may have to sell off your car if it is worth more than $4,500 to get 
help with prescription drugs. And it seems to me selling off family 
heirlooms is not something we want to do to our seniors.
  In many of our States that have big metropolitan areas--and I see the 
Senators from Connecticut, Illinois, and New Jersey, I am from 
California--our seniors will be forced into demonstration projects. 
That means they will either have been forced into an HMO to get a 
better break on their monthly premium or have to pay more to stay in 
traditional Medicare where they have the choice of a doctor.
  It increases Medicare premiums for middle and upper class people. 
Some people may say that is a great thing. Let me tell you a couple of 
bad things about that. Again, what will happen is, these people may 
well leave Medicare, which means the pool shrinks and the premiums go 
up for everybody else. The other problem is, these premiums are not 
indexed. If this had been in place in 1980, I think we figured it would 
be people with $33,000 a year who would have to pay higher premiums. We 
know that is a low number.
  There will be confusion and fear. I will talk about that. And there 
will be large benefit shutdowns which are daunting and penalize 
innocent seniors.
  I say to the occupant of the Chair, something maybe he has not yet 
found in this bill because, look at the size of this thing. This is the 
size of it. It is hard to lift it. If you look at this, hidden in there 
it says the Secretary of HHS can demand from the IRS your tax return or 
mine or any of our constituents to just make sure they are not cheating 
on a lot of the rules that go along with this.
  In California, the minute this bill goes into effect, I have a lot of 
problems: 867,000 sick low-income seniors will have worse coverage; 
250,000 retirees will lose their more generous prescription drug 
coverage; 296,000 fewer low-income seniors will qualify for low-income 
protections than under the Senate bill that I was pleased to vote for; 
230,000 Medicare beneficiaries will pay higher Part B premiums; and 1.4 
million seniors will be forced or could well be forced into one of 
those demonstration projects with HMOs.
  I don't have a lot of time left so I want to leave you with this 
chart that I made up, sort of wrote it myself. A lot of it is in my own 
hand. I have to tell you, I used this chart on Saturday. My phones have 
been ringing off the hook. This is what the senior citizens now have to 
understand.

[[Page S15706]]

  I would urge my colleagues to look at every expression on this chart 
and you tell me if you understand what these things are: Transitional 
assistance, there is one thing seniors better learn because they are 
transitioning into something different; MSAs, medical savings accounts; 
risk adjustment, you are going to hear about that; benefit shutdown, 
that is when you know longer have any benefit, and Senator Daschle was 
so eloquent on that point.
  If you have $5,000 worth of prescriptions, you are going to have to 
pay $4,000 toward that $5,000. You can get a better deal with a 
discount card. If I was a local pharmacist, I would just say: Come on 
in, Medicare patients. I will give you a discount. Don't bother filling 
out all the forms that will be necessary with this so-called great 
benefit that the other side says they have given. There is a huge 
benefit shutdown.
  Coverage gap is another expression to explain. There are copayments, 
risk corridors. You all know what HMOs are. You better know it well 
because there are going to be a lot more of them. There is MA-PD plans, 
plan retention funding; MA regions; donut holes--and you can't eat 
those donut holes; those are gaps in coverage--premiums, you all know 
what that means.
  Let me tell you, it is going to be confusing. You won't know what 
group you fall in and what your premium is. Income related, HSAs, 
wraparounds, national bonus payments, stabilization funds--that is a 
nice name for the slush funds that are going to the HMOs, and one 
reason that budget point of order ought to be sustained--Medicare 
advantage competition, annual out-of-pocket threshold. Seniors, you 
better learn what that is. You are going to have to keep notes on every 
little penny you spend.

  By the way, if you happen to be on a prescription drug that is not in 
the Medicare formulary, but it was in your Medicaid formulary--I don't 
even have the time to go through all this.
  One of my favorites is ``clawback.'' Half of my colleagues probably 
don't know what that means. States are prohibited from helping their 
seniors who are very poor pay their copayments. The States are 
prohibited and they must pay back the Federal Government. So seniors, 
pick up the phone, call your Senator. Tell them to bring this bill back 
to the drawing board. It is a huge bill. Only a tiny portion of it is a 
prescription drug benefit.
  Mr. President, let's get rid of this turkey in time for Thanksgiving.
  I yield the floor.
  The PRESIDING OFFICER. Who seeks recognition?
  The Senator from Connecticut is recognized.
  Mr. DODD. Mr. President, I commend my colleague from California. 
Bring that chart down here. Talk about alphabet soup, this is very 
instructive, it seems to me, in terms of why people are so confused 
about what is in this bill. There is incredible language here that even 
the most determined person to learn about this bill would be hard 
pressed. There it is.
  I thank the Senator from California because she has laid out here a 
lexicon of language which would glaze over the eyes of the most 
determined people to try to sort out what this bill means.
  One of the points the Senator made is worth noting again. This is not 
the end of a Congress. This is only the end of a session. If we were at 
the end of a Congress, I presume the argument made that we have no 
other choice, we can either do it now or it doesn't get done would be 
valid. Each new Congress has to begin all over. But we can actually 
come right back, pick up where we left off, and try to work this 
legislation out to serve a better interest.
  I thank her for this. Some of this really needs further explanation. 
Let me say this--and I am being repetitive to some degree--the 
prescription drug piece of this is of concern to me. I was willing to 
accept the argument that having a prescription drug benefit of $400 
billion over the next 10 years, while not perfect, was a start. If that 
is all we were voting on today, I would probably vote for it. What is 
not being discussed at any great length is the second half of the bill, 
which is very confusing to people because it has language in it that is 
unclear as to what the ramifications mean.
  So people need to pay attention and understand that if we are just 
dealing with the second half of the bill, the Medicare-exclusive parts 
of Medicare, I think there would be a very different reaction in the 
Chamber to what we are proposing. I suspect the prescription drug 
benefit piece would pass overwhelmingly, and I suspect that a free-
standing Medicare piece might not get 15 votes, when you consider what 
is being proposed.
  You are absolutely prohibited, under this bill, from joining to go 
out and buy prescription drugs collectively. You are banned under this 
legislation. Under this legislation, of course, you are going to give a 
significant advantage in the competition because of the $12 billion 
subsidy. That is the reason the order holds here. This piece of 
legislation has a significant subsidy coming up to the private piece of 
this proposal. Nothing like that is being offered anywhere else.
  In fact, a similar point of order was raised in July of last year--at 
the end of July of 2002--making the exact same point of order that has 
been made on this legislation. That point of order was raised by the 
majority leader and the chairman of the Finance Committee against the 
piece of legislation offered by Senators Graham, Miller, and Kennedy. 
There, the point of order was against section 302(f) of the Budget Act 
because it broke the budget ceilings.
  That is what is being offered here for exactly the same reasons. It 
will be curious to see whether or not the people who felt so strongly 
about not waiving the Budget Act back then will do the same here.
  This legislation being proposed, obviously, also makes it extremely 
difficult for people, down the road, to be able to have a prescription 
benefit plan that is going to be fair and balanced. I take note that 
none of these provisions, by the way, will go into effect rather 
immediately. You can impose many of the things we are talking about 
here in a matter of days if you are truly interested. Yet they are 
delaying it until 2006, until after the 2004 elections when, obviously, 
what happens to beneficiaries under the so-called fair competition--
Medicare, remember, was a program designed to take the wealthy and 
healthy and the poorer and sicker together, not to discriminate, and to 
provide for both of these constituencies. Over the years, that is why 
the program has been so successful. What is going to happen, of course, 
with this unfair competition of a 9-percent differential and a $12 
billion subsidy is that those who are wealthier and healthier will spin 
off out of Medicare, and only the poor and the sicker will be left in 
the program; thus, raising the premium costs or reducing benefits. That 
is what is going to happen here. There is no doubt in my mind about 
where we are headed with this proposal. We have raised this point of 
order to suggest that there is a better way of crafting this 
legislation. We urge our colleagues to support the point of order when 
the vote occurs.
  The PRESIDING OFFICER. The Senator from Pennsylvania is recognized.
  Mr. SANTORUM. Mr. President, I yield myself such time as I may 
consume. Will the Chair please notify me when I have used 10 minutes?
  The PRESIDING OFFICER. The Chair will do so.
  Mr. SANTORUM. Mr. President, I find this to be a little bit of a 
surreal experience, being here on the Senate floor and listening to all 
of the problems in this legislation, all about how it doesn't provide 
enough benefits and how we need to spend more money, and what is being 
offered is the budget point of order by the very people who want to 
spend more than what this bill does.
  Someone is saying we are spending too much money--I think $4 billion 
or $5 billion--in 2004. We are not even spending the $400 billion 
allotted. It is a $395 billion bill. We are within the budget window 
over 10 years and also over 5 years. But in the first year we are not 
in the budget window. Why? Let's figure it out. If you are in for 5 and 
10, what is the problem for the first year? The problem the first year 
is that the budget sets up a category for mandatory spending, and 
included in that was the money for Medicare.
  Now, is the money that we have in this bill exceeding the money that 
we anticipated in the budget for Medicare? No. Well, wait a minute. If 
the money that we have in this bill doesn't exceed

[[Page S15707]]

what we had budgeted for Medicare, then why is it subject to a budget 
point of order? Well, because the money that we had budgeted for 
Medicare was eaten up by two Democrat initiatives that have swallowed 
up that money--unemployment extension, and FMAP, money to the States 
for their medical program. Because of those two expenditures--which I 
agree was done in a bipartisan way, and I tip my hat to the other side; 
it was clearly motivated by the other side of the aisle to spend this 
additional money--we have now blown through what we were going to spend 
on Medicare. Guess what. There is no money left in fiscal year 2004 for 
Medicare--any kind of spending in this bill.
  So if we would have done anything in this year to spend money on 
Medicare, we would have exceeded the budget caps. So we have this thing 
tantamount to a gimmick, if you will, where we have exceeded the budget 
because of other spending having nothing to do with Medicare, and that 
leaves us liable to a budget point of order.
  Now, I understand if you want to kill the bill--and I understand you 
do want to kill the bill--we had a vote on cloture. We had 70 votes, 
and it would have been 71 had Senator Shelby been here and his plane 
was able to get off the ground. But we had 70 votes not to block it on 
a procedural vote, to give the people of this country, through the 
Senate, an opportunity for an up-or-down vote as to whether this 
proposal is worthy. Seventy Members voted today that we were not going 
to use a procedural filibuster.

  What is the next step? The next step is to use another procedural 
gimmick. In this case, as the Senator from New Mexico has pointed out, 
it truly is a gimmick because we are within what was contemplated when 
we passed the budget earlier this year for Medicare next year, but we 
have a technical problem because of other spending that has nothing to 
do with Medicare.
  I say to my colleagues who are going to be casting their votes 
momentarily on this issue: If you want to block this vote procedurally, 
you had your chance. It was a vote on cloture. We are now postcloture. 
To put up another procedural gimmick--and this is truly a gimmick--
being offered by someone who for 57 out of the last 60 waivers of the 
Budget Act voted to waive the Budget Act and the 3 times they did not, 
they were not here to vote as a way to obstruct the Medicare bill at 
the 11th hour and the 59th minute, when they had voted for every single 
waiver that was available to be voted on, to use this to try to block 
this bill I think does not comport with the original vote which was not 
to filibuster this bill.
  This is tantamount to another filibuster only it doesn't have the 
word attached to it. Maybe you can go back home and say: We didn't 
filibuster this bill; I voted to allow this bill to be considered. But, 
you know, there was this budget problem. Now by the way, I have never 
seen a budget problem that I didn't have a problem with waiving. I have 
waived it 57 times or 60 times this year on things a heck of a lot less 
important than prescription drugs for Medicare, and we routinely did 
it, but when it comes to Medicare, when it comes to $3 billion or $4 
billion or $5 billion out of a $400 billion bill in the first year, 
because of a problem having nothing to do with Medicare, then I am 
going to find a problem, then I am going to be concerned about the 
budget when I voted to waive the Budget Act 60 times prior to that.
  That dog doesn't hunt. That is just a procedural obstruction. I hope 
my colleagues who voted for the cloture motion will vote consistently. 
This is another vote on cloture. That is what this is. This is a 
procedural hurdle that has no substance or basis to it.
  When the people who offer this procedural motion, concerned about the 
impact on the budget, and in all of their speeches talk about how much 
more money we should be spending, one wonders how sincere the budget 
concerns really are. Every person who has gotten up to support this 
budget point of order has said this bill falls short because it doesn't 
spend enough. Yet they are making a point of order on the budget which 
says we are spending too much.
  This is the kind of shenanigans that goes on in the Senate, that goes 
on in Washington, DC, that the public, frankly, just doesn't 
understand. You are either for this bill or against this bill. If you 
want to block this bill, vote against cloture, but don't put up these 
gimmicks, rules that are in place to stop something from happening 
because you want to accomplish the opposite effect of the rule. The 
rule was put in place to save money. They are using the rule so they 
can spend money.
  It shouldn't be any surprise that on another issue relating to this, 
we have a situation where many on the other side of the aisle have been 
critical of this noninterference issue. That is the provision that says 
the Federal Government is not going to negotiate a price for 
prescription drugs for everybody on Medicare. Why do we have this in 
place? Let me give you the policy.

  We have this in place from a policy point of view because roughly 50 
percent of all prescriptions in this country are going to be bought 
through Medicare--to have that kind of ``market power'' where the 
Federal Government will basically go in and dictate a price fix, price 
set to every pharmaceutical--most pharmaceutical, not every--most 
pharmaceutical products in this country.
  Most Members of Congress are not for a command-and-control, one-size-
fits-all drug price in America. Some are. Some would like to adopt the 
Canadian-style system, and some would like to adopt the German-style 
system, but we have made a decision that we believe it is better for 
the private sector insurance company, with big market share because 
there will not be very many of these plans--there will be big market 
share--to negotiate with the private sector drug companies for the best 
price they can get. And the better negotiators they are, the better 
premiums they can offer to their beneficiaries which means more 
enrollees. It is certainly their incentive to negotiate tough bargains 
with the pharmaceutical companies. They have the market power and the 
ability to negotiate.
  It is different than giving the Government the ability to negotiate--
I shouldn't say negotiate, I should say dictate--the price they will 
pay for pharmaceuticals. We think the private sector should work, not 
the Government dictating prices. They compare it to the Veterans 
Administration. Yes, the Veterans Administration has such a proposal--
not a proposal; it is the law. It mandates a 24-percent reduction. Does 
that have any rhyme or reason to what the drug costs should be? No, it 
is just a flat 24 percent across the board. If you don't take that 
reimbursement, then you can't participate in Medicaid or any other 
Federal program. It is a heavy hammer. It is a very small part of the 
pharmaceutical industry.
  I yield myself 3 additional minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SANTORUM. Mr. President, that is the policy. What is the history 
of this provision? It is very interesting. This proposal, which was 
criticized by Senator Daschle today, was introduced by Senator Daschle. 
This came from the Democrats' bill in the year 2000. This language, 
almost verbatim, was introduced by the Democratic leader, and now like 
lemmings, they are lining up saluting this as the worst thing they have 
ever seen. Yet it is their proposal, not just Senator Daschle's. It was 
also in Congressman Stark's bill in 2000, and again, in the Snowe-Wyden 
proposal, there was the exact language. It was in the tripartisan plan 
of last year. Actually, a version of this language appeared in the 
Senate bill that received 76 votes on the floor of the Senate.
  I just wonder whether the degree of outrage is somehow inversely 
proportional to the actual complicity of the act. We see this huge 
amount of outrage, and yet we see complicity. In fact, it is their 
language that is in this bill. Why did they put it in? They put it in 
because they did not want to be charged with having Government price 
fixing. They didn't want to be accused in their proposal that it was 
going to be a command-and-control Government price fixing of 
pharmaceutical products.
  What did they do? They said: We believe in competition. They wanted 
to be able to say that they have a competitive model, so they put in a 
competitive model. Let the private sector negotiate their incentives 
for the insurers to get lower costs out of the

[[Page S15708]]

pharmaceuticals, and there are incentives on the pharmaceuticals point 
to give volume discounts.
  Let that mechanism work. Don't have the head of CMS, the Medicare 
Director in Washington, DC, dictate prices for everybody.
  Let us not set those prices in the Senate. Let us let the marketplace 
work to squeeze cost and get efficiency out of the system. It is their 
idea. So, again, I suggest on two issues that have gotten a lot of 
talk, No. 1, the budget point of order, which is made to save money, is 
actually being used by the other side so they can spend more money. The 
major provision that has gotten the ire of so many, which is this 
noninterference with negotiating drug prices, is their proposal.
  I suggest, as I had a conversation with one of my colleagues on the 
other side of the aisle a few moments ago, I understand the left hates 
this bill. As we saw from the House and we saw from some of our 
colleagues, a lot of the right hates this bill. Usually, things that 
come straight down the middle are usually where most Americans are and 
where most Americans would like us to go. That is what this bill does. 
I hope we have very strong support for it as a result.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. CORZINE. Mr. President, I want to speak for about 5 minutes about 
encouraging my colleagues to sustain this point of order. I want to use 
some of the comments I heard about gimmickry because I am concerned 
about the budget issues, and this is absolutely relevant. It was 
gimmickry to say we are spending $400 billion on a prescription drug 
benefit for seniors and then hide it in HSAs, $12 billion support for 
the insurance industry, lots of support, some of which I actually might 
even have agreed to with regard to encouraging corporations to maintain 
their insurance policies so Medicare does not have to pick it up, all 
of that is true. But we have a major league problem. There is no cost 
containment in this program of any serious effect.
  I come from a State where there are a lot of pharmaceutical 
industries and we were talking about importing price controls from 
Canada. We had that debate around here. I am not for that. I think we 
ought to deal with a market structure that is fair and respectful of 
the buyers actually competing for the price.
  Last time I checked, the Federal Government, when it buys a tank, 
actually goes out and negotiates the price. When it is buying 
airplanes, we talk about negotiating the price. I think it is 
absolutely essential that if Medicare is the provider of the resources, 
the taxpayer, that they be able to negotiate their price.
  One of my problems with this bill--which I will remind people is 
1,200 pages long and not many of us have read it--is that it has a lot 
of unintended consequences. It has one very real intended consequence 
which is to dampen competition which might lower prices. We are 
increasing the demand curve and we are keeping the supply curve the 
same, and that raises prices. That is exactly what happens. That is 
economics 101.

  By the way, the VA is a perfect example of it, and I thank Senator 
Graham for pointing this out. When the VA is negotiating prices, it is 
not 24 percent across the board. It is on individual drugs. They can 
save about half of what would be paid if they went to a pharmacy.
  This is not my chart but it is actually doggone good. I take this 
Lopressor for high blood pressure. No wonder I have high blood pressure 
being in the Senate. It costs 1 cent per pill. At the drugstore it is 
87 cents.
  Here is another one. This is Zantac. I guess if one has an ulcer--
some people get ulcers when they are around here--it costs 2 cents at 
the VA. It costs $1.83 at the drugstore. That is price control, price 
containment at the VA, while the drugstore is charging what the market 
will bear. That is what our seniors are doing. That is going to back 
into the longrun explosion of costs with regard to this bill, about 
which a lot of conservatives are concerned. I am concerned about it.
  We say this is $400 billion, it is out of tilt with the budget 
resolution in the first year, but if we think we know whether this bill 
is going to produce $400 billion worth of expenditures over the next 10 
years, I think we are kidding ourselves.
  Nobody knows what is inside this bill on each individual page. There 
is going to be a lot of difference by the time we get there. The one 
thing we do know when we go from 40 million seniors to 70 million 
seniors is this thing is going to explode in the second 10 years. The 
estimate is it will cost $1.3 trillion to $2 trillion.
  Frankly, it is going to increase the unfunded mandate for Social 
Security and from about $18 trillion to $25 trillion. I cannot even 
think of those numbers, but that is a huge problem if we are not 
willing to deal with the reality of what we have to do.
  That is why it is important on the budget to take into consideration 
whether VA and the Medicare system are actually going to negotiate 
these prices because they can hold down those costs. If we do not want 
to deal with that, then we are going to have those kinds of long-term 
results which are going to end up undermining the ability of the 
American people to continue to have the kind of support they expect 
from Medicare and other things.
  I said last night, there is a lot of good in this bill. 
Unfortunately, at least in New Jersey, 300,000 folks who do not have 
insurance or drug coverage right now are going to get it, but 550,000 
are going to be impacted negatively. It is real. We have done the 
analysis. We know it.
  What is important is we are putting ourselves on a track where we 
will not be able to afford Medicare A, B, prescription drugs, or any of 
these things. I think we are putting ourselves on a track because we 
have been unwilling to deal with cost containment in a serious way. The 
way to do that is not command and control. It is 15 percent of the 
market. People negotiate for the Federal Government in every other 
purchase they do. They ought to be doing that here. It would make a big 
difference on cost containment.
  I urge my colleagues to sustain the point of order.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. I yield whatever time he might consume, up to 5 
minutes, to the Senator from Oklahoma.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I wish to add a couple of comments to my 
earlier statement. I noticed the Democrat leader, Senator Daschle, 
alluded to similar points of order being raised in July of 2002. That 
was raised and supported for a couple of reasons. One, the budget 
resolutions in 2002, that was based on the resolution that passed in 
2001 for fiscal year 2002, said there is up to $300 billion in a bill 
that was reported out of Finance Committee that would strengthen and 
enhance Medicare.
  In 2002, the Democrats were running the place. They did not report a 
Medicare bill out of the Finance Committee. They bypassed the Finance 
Committee. I was a member of that committee. I was incensed that we 
would just ignore the committee. Therefore, it violated the budget. 
One, I know it was not reported by committee. Also, it was just, here 
is the bill. I believe the bill was quite a lot larger than $300 
billion. I am not sure if it was $570 billion or $600 billion. It was a 
lot more than $300 billion.
  So there was a very legitimate reason. One, it was not reported out 
of committee. It did not have work done on it by the committee. It did 
not meet the overall structure or the framework. This bill that we have 
before us is within the $400 billion as reported by CBO. It did go 
through committee, both the Finance Committee and the Ways and Means 
Committee. It has been scored by CBO. At that time, I believe the bill 
we had on the floor of the Senate had not even been scored, or at least 
the details had not been scored, by CBO.
  There was a legitimate reason to make a budget point of order. This, 
in my opinion, is not. By its very fact, as evidenced by most of the 
people who are promoting this budget point of order, they have almost 
all the time, 90-some percent of the time, opposed budget points of 
order when they have been raised in the past.
  I yield the floor.
  The PRESIDING OFFICER. Who seeks recognition?

[[Page S15709]]

  The Senator from Illinois.
  Mr. DURBIN. Under the unanimous consent, I believe I have been 
allocated 5 minutes. Is that correct?
  The PRESIDING OFFICER. That is correct.
  Mr. DURBIN. I ask for 4 and ask if the Chair will notify me when I 
have 1 minute left.
  A few minutes ago, the Secretary of Health and Human Services, Tommy 
Thompson, was on the floor. It is his right to visit with us. It is an 
opportune moment for him to come as the Senator from Pennsylvania 
reminds us that we are not going into socialism, socialized medicine, 
command and control; we are not going to have the Government bargaining 
on the prices of medicine.
  Yet I guess the Senator from Pennsylvania has forgotten that during 
the anthrax crisis when Cipro, which was going to be used as an 
antidote, was $4.67 a pill, Secretary Thompson negotiated for America 
to reduce the price of that drug in the midst of the crisis to 75 
cents. He was quoted as saying:

       Everyone said I wouldn't be able to reduce the price of 
     Cipro. I'm a tough negotiator.

  Sounds a lot like command and control for me.
  For Americans, they are taking a look at this bill and saying: Who is 
going to speak for us? This 1,100 page bill prohibits reimportation of 
drugs from Canada. So our friends, the seniors and families and others 
who are looking there for relief, they will not be getting it out of 
this bill. Even worse, as has been noted, in this one page that I take 
out of 1,100, page 53, lines 18 through 26, we prohibit Medicare from 
negotiating lower drug prices.
  The Senator from Pennsylvania says that is because we believe in the 
free market. Let the market set the price.

  I might say to my friend from Pennsylvania, how do you explain the 
multibillion-dollar subsidies for HMOs included in this bill? How do 
you explain the $6 billion subsidy for your friends with health savings 
accounts in this bill? Frankly, you can't, under free market 
principles.
  Let me say, when you take a look at this bill you understand that we 
are squandering $6 billion for retiree coverage. That is one of the key 
elements. We create these new health savings accounts. I will not go 
into the long and lurid history, but when Mr. Newt Gingrich of Georgia 
took control of the House, he brought with him one of his best pals, 
the Golden Rule Insurance Companies from Lawrenceville, IL. In fact, 
the Speaker was so smitten with this company he cut a television ad for 
them with their medical savings accounts. Frankly, they returned the 
favor, contributing over $3.6 million to Republican congressional 
candidates. It was such a sweet arrangement. They would pass bills 
sending more business to Golden Rule, Golden Rule would send millions 
of dollars to Republican candidates.
  Frankly, that meant nothing compared to this bill. This bill gives $6 
billion for health savings accounts that have nothing to do with 
Medicare and nothing to do with prescription drugs for seniors. This is 
the largest single giveaway I have ever seen in 21 years. It is in this 
bill.
  Now, let me connect the dots. Turns out Golden Rule Insurance Company 
was recently purchased. Who bought Golden Rule Insurance Company? A 
group called UnitedHealthcare, down here, whose CEO, Channing Wheeler, 
was paid $9.5 million, a sweet salary; compared to other HMO execs--not 
that great.
  Now connect the dots. Golden Rule, a friend of the Republican Party, 
purchased by UnitedHealthcare; UnitedHealthcare is the largest 
insurance group working with AARP. It all comes together.
  AARP is selling this product for UnitedHealth Group, a $6 billion 
subsidy in this bill, and now they have discovered this is the best 
bill in the world.
  I suggest to all my colleagues and all those watching this debate, 
call AARP. Here is the telephone number, 1-800-424-3410. Tell them to 
stand up for seniors for a change, tell them to fight for Medicare, 
tell them to stop the sweetheart deals with Golden Rule and 
UnitedHealthcare. We need to make sure the people who wrote this bill 
get back to work and eliminate these giveaways, the multibillion-dollar 
giveaways, the subsidizing for these great free market disciples that 
are included in this bill. And we need to do it now. Sustain the point 
of order. Vote no on the waiver of the point of order.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, we reserve the last 4 minutes for the 
Democratic leader.
  The PRESIDING OFFICER. There is 3 minutes remaining. The Senator from 
Iowa.
  Mr. GRASSLEY. I want to take 30 seconds and then yield 5 minutes to 
the Senator from Louisiana and then the Senator from Montana.
  Before I do that, how many times have we heard from the other side of 
the aisle about this being a 1,000-page bill? I want them to read, if 
they know how to read: There are 678 pages here. I want to know how you 
folks can raise a point of order when you can't even count the number 
of pages in a bill? I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. BREAUX. Mr. President, we have reached that point where the 
debate is on the size of the bill and not the merits of the bill.
  Let me just say, 38 years ago this Congress passed this document that 
I have in my hand for the first time. It was in 1965 that we enacted 
Medicare, which was a noble experiment. It was led by Democrats and 
signed into law by President Lyndon Johnson. It was, indeed, a change 
and a challenge. No one knew whether it was going to work. People could 
not be guaranteed it was going to serve the needs of America's seniors. 
But it was a chance worth taking. It was a change. I suggest today 
Democrats in particular should not fear change if it is aimed at 
improving a document that has served this country so well.
  The only defect of this legislation was that it didn't do everything 
that it should have. For instance, while it covered doctors and it 
covered hospitals, it did not cover what at that time were new 
innovations in the area of prescription drugs. Members of Congress knew 
we had to take care of seniors going to the hospital. We had to take 
care of seniors seeing their doctors. But no one really thought that 
seniors getting prescription drugs was going to be that important.
  Today we have the opportunity to correct what we did not do in 1965 
and bring about a reform to this program which is greatly needed. I 
would just say that is why organizations such as the National Council 
on Aging, which represents all of these seniors who go to these senior 
centers throughout our States and congressional districts, as well as 
the AARP--and Democrats many times cite the AARP when they agreed with 
them. But now when they do not agree with them they find fault with the 
organization.
  I suggest the Nation's largest organization representing over 35 
million seniors has had their health economists and their lawyers 
carefully study the document that is before us and made a 
recommendation to those of us in Congress. They said this is something 
we support because it is indeed, on balance, the bill we should approve 
and send on to the President for signature.
  Again, I say it is not a perfect bill. But, once again, we can't let 
the perfect be the enemy of the good. We also cannot let the political 
pundits of both of our parties suggest we cannot vote for this bill 
because somehow it may give credibility to the other party. I have 
actually heard that from both sides of the aisle. I think that would be 
a tragic mistake.
  The issue today is not which political party wins. The issue today is 
whether we can craft legislation that allows America's 40 million 
seniors to come out a winner. I think on balance this bill does that 
because it combines the best of what government can do with the best of 
what the private sector can do.
  Many on my side of the aisle think the Federal Government should do 
everything all the time. We can't do that. We can't do it very 
effectively. So I think it is important to note that on the other side 
of the aisle, many of them think the Federal Government should not do 
anything and that the private sector should do it all.
  The truth lies, as most truthful matters lie, somewhere in between. 
The fact is, we ought to combine the best of

[[Page S15710]]

what Government can do with the best of what the private sector can do 
and create a new Medicare reform for the 21st century.
  With regard to the points of order, I made it very clear the two 
points of order we are going to be voting to waive are not dealing with 
the so-called premium support language that is in the bill. It doesn't 
deal with the cost containment provisions that are in the bill. It 
doesn't deal with whether we are going to bring in the Medicare Program 
all low-income seniors who are currently in, under the State Medicare 
Program--it doesn't deal with any of that. It deals basically with the 
fact that we are spending more money in this legislation than the 
structure of the budget would allow us to do.
  That is not uncommon, and the proper procedure is to have a waiver of 
those points of order, which is what we are going to be voting on.
  The first point of order really lies because of the fact that we put 
more money to help the State Medicaid Programs, something that most 
people on my side of the aisle strongly supported, to make sure we help 
those programs make sure the drugs that they are going to still be 
involved in helping seniors with--that they will be able to help them 
to the maximum degree possible.
  In addition, one of the other reasons the first point of order lies 
is because previously the Finance Committee helped the States with 
their unemployment insurance, something most people on my side of the 
aisle strongly supported. It is not sufficient for people to go back to 
our States and tell seniors that we somehow prevented this bill from 
being adopted because of a point of order that was very technical in 
its essence. I think people want to know where we stand on the merits 
of the bill. Are we for prescription drugs for the first time, for 
seniors, since 1965? Are we for giving them a program where the Federal 
Government pays 75 percent of their drug costs? Are they for or against 
a program that is going to give particular help and assistance to our 
Nation's low-income seniors, which is so terribly important? Are we for 
bringing low-income seniors into one standard national Medicare Program 
or are we not?
  I would not want to go back and somehow argue the technical merits of 
the point of order and say this is why I could not vote for 
prescription drugs for seniors, a $400 billion package. There are going 
to be some on the more liberal wing and more conservative wing who will 
find reasons to be against this bill, but on balance it represents a 
centrist coalition, and I urge my colleagues to support it.
  The PRESIDING OFFICER (Mr. Sununu). The time of the Senator has 
expired.
  Mr. DASCHLE. Mr. President, how much time remains on either side?
  The PRESIDING OFFICER. The minority side controls 3 additional 
minutes, the majority side controls 6\3/4\ minutes.
  The Senator from Montana.
  Mr. BAUCUS. Mr. President, make no mistake about it, the issue before 
us--that is, whether a point of order should be sustained--is a vote 
about whether or not we provide prescription drug benefits to seniors. 
It is that simple.
  If we fail to waive this point of order, this bill is dead, certainly 
for this year, probably for the next Congress. The very narrow issue 
before us is whether or not it is ``OK'' to spend roughly $4 billion 
more than the Budget Act previously allocated for the year 2004.
  It is important to remember that this bill is totally within the 
Budget Committee's allocation for the 10-year period of $400 billion. 
So the narrow question is, Is it within the allocation for the year 
2004?
  Now, a couple points here. In 2004, dollars will be spent based upon 
various pieces of legislation. There is already legislation passed 
which allocates dollars for 2004. So the conference report itself does 
not break the 2004 cap, but, rather, it is the accumulation of the 
dollars in this bill plus previous bills which total up to exceeding 
the cap allowable for 2004 under the Budget Act by about $4 billion.
  So the real question we are asking ourselves is, Are we going kill 
this bill--a bill for which the full $400 billion allocation does not 
violate the Budget Act--are we going to kill this bill on a mere 
technicality, a technical trap that any spending in 2004 has the effect 
of bringing this bill down?
  Now, it makes no sense to do that because, clearly, we want, in this 
bill, to spend some money in 2004. What about the doctors in 2004? What 
about the hospitals in 2004? Are we to tell doctors and hospitals, 
because of a mere technicality, they do not get reimbursed in 2004? We 
will suspend payments for a year, but then, beginning in 2005, we could 
pick them up again? I do not think so.
  I don't know what Senators are going to say to their seniors back 
home who vote to sustain the budget point of order to kill the bill 
because of some spending in 2004 for doctors and hospitals, denying 
them a prescription drug benefit because they killed the bill. I do not 
think many people in this body would like to do that.
  This is a good bill. It is unfortunate that at this stage of the 
debate, where we are past the listening stage, an awful lot of Senators 
are not listening to each other. Rather, they are being rhetorical, 
they are making their rhetorical points, and they are trying to 
persuade I don't know who, but some people to certain points of view.
  But if you look at the mere language of the bill, it is a good bill. 
It provides a prescription drug benefit for seniors, a huge benefit for 
low-income seniors. One-third of all seniors, under this legislation, 
are categorized as low-income, and they get the benefits of this bill.
  We also added in more money for what is called the Medicaid wrap to 
help lower income folks even more than earlier was the case. We also 
added in money to help keep retiree coverage.
  I think it is important to note that companies generally are reducing 
retiree coverage in America, irrespective of this bill. We have put in 
$88 billion to companies for retiree coverage, which means, clearly, 
that those companies are more likely to keep and retain coverage; that 
is, this legislation intends to encourage the retaining of coverage, 
not discouraging it.

  So if this bill goes down, there are going to be more retirees who 
will lose their coverage. Senior citizens will not get the benefit of a 
drug benefit, particularly the lower income seniors will not get the 
benefit, and we will be doing our seniors a terrific disservice.
  So tomorrow is another day. We can improve upon this bill. If the 
bill is killed, as it will be if this point of order is sustained, 
those who hope, ``well, maybe we can do better next year,'' I think 
should remember the admonition that a bird in the hand is worth two in 
the bush.
  Next year is a very political year. It is 2004. It is a Presidential 
election year. It is almost impossible to predict the dynamics of next 
year. It depends on the economy. It depends upon foreign policy. It 
depends upon the Presidential election politics. And we all know that 
usually in a Presidential election year not much legislation of 
consequence passes. Usually, there is a lot of talking but not a lot of 
action.
  I do not think we can afford passing up giving seniors a chance to 
get prescription drug benefits. So I urge Senators, on the technical 
matter before us, to vote to waive the point of order because it does 
not make much sense to me to let a technicality kill this bill.
  The PRESIDING OFFICER. The Senator's 5 minutes have expired.
  The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I yield myself such time as I might 
consume, and probably all of it.
  Keeping the point of order means keeping the status quo. So I am 
asking my friends on the other side of the aisle, what is there about 
the status quo on Medicare that is good and acceptable? The lack of 
prescription drugs? The slowness in getting cheaper generic drugs out 
into the market? Arbitrary caps on physical therapists? Insufficient 
funding for rural hospitals and long waiting lines for seeing the 
doctors, if Medicare people can get in to see a doctor in rural 
America?
  I ask my colleagues, is this status quo acceptable? Apparently it is, 
at least to the Senators who are refusing to waive the point of order.
  I say nothing about Medicare's status quo is acceptable, not doctors' 
cuts, not decreasing hospital and home health payments, not the lack of 
access to health plans in rural areas such as

[[Page S15711]]

mine. And most of all, seniors' lack of access to prescription drugs 
for all these years is what I find to be most unacceptable about the 
reality of the status quo.
  For those of you happy with the status quo, I say, try telling that 
to your doctors, your hospitals, and, most of all, to your seniors. You 
try telling these people that a technical point of order is more 
important than changing Medicare's status quo. I will not try, and I 
hope my colleagues will not try either.
  The PRESIDING OFFICER. The Senator's time has expired.
  The minority leader.
  Mr. DASCHLE. Mr. President, this is our last chance to do something 
to control the exploding costs that are absolutely guaranteed to occur 
for seniors and for the Government unless we do something else. This is 
the last chance.
  There are those who have just said this will kill the bill. Just to 
make sure everybody understands, this has nothing to do with killing 
the bill. What happens under Senate rules is that we will go back to S. 
1 as an amendment to H.R. 1. That is the pending business. That was 
voted on, by the way, 76 to 21. So we go back, if we sustain this point 
of order, to the Senate-passed bill, which passed 76 to 21. We can send 
it to the House and ask for bipartisan support.
  The distinguished Senator from Pennsylvania was saying that one of 
the concerns I raised was our ability to contain costs. And yes, he is 
right, we had an early bill that had the provision, this egregious 
provision in it prohibiting the Government from getting the best deal, 
just as Secretary Thompson has done with Cipro, just as we do with the 
Veterans Administration.
  What he did not tell our colleagues is that every subsequent bill--
the last two bills we have introduced--did not have this provision in 
it. Why? Because we understand what an incredibly valuable tool it has 
been for the Veterans Administration.
  So, Mr. President, if you want to control costs, if you want to make 
sure the senior citizens of this country have the ability to get the 
lowest price, if you are absolutely as concerned, as you say you are, 
about controlling the costs of this program, then you are going to vote 
to sustain this point of order.
  This is our last chance.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from South Dakota has 1 minute 
remaining.
  Mr. DASCHLE. I yield the remainder of my time.
  Mr. GRASSLEY. Mr. President, I ask for the yeas and nays.
  The PRESIDING OFFICER. The yeas and nays have been requested. Is 
there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The legislative clerk called the roll.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The yeas and nays resulted--yeas 61, nays 39, as follows:

                      [Rollcall Vote No. 458 Leg.]

                                YEAS--61

     Alexander
     Allard
     Allen
     Baucus
     Bennett
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Carper
     Chafee
     Chambliss
     Cochran
     Coleman
     Collins
     Conrad
     Cornyn
     Craig
     Crapo
     DeWine
     Dole
     Domenici
     Dorgan
     Ensign
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Graham (SC)
     Grassley
     Gregg
     Hatch
     Hutchison
     Inhofe
     Jeffords
     Kyl
     Landrieu
     Lincoln
     Lott
     Lugar
     McConnell
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner
     Wyden

                                NAYS--39

     Akaka
     Bayh
     Biden
     Bingaman
     Boxer
     Byrd
     Cantwell
     Clinton
     Corzine
     Daschle
     Dayton
     Dodd
     Durbin
     Edwards
     Feingold
     Graham (FL)
     Hagel
     Harkin
     Hollings
     Inouye
     Johnson
     Kennedy
     Kerry
     Kohl
     Lautenberg
     Leahy
     Levin
     Lieberman
     McCain
     Mikulski
     Murray
     Nelson (FL)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
  The PRESIDING OFFICER. On this vote, the yeas are 61, the nays are 
39. Three-fifths of the Senators duly chosen and sworn having voted in 
the affirmative, the motion is agreed to, and the point of order falls.
  Mr. FRIST. I move to reconsider the vote.
  Mr. McCONNELL. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. DASCHLE. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DAYTON. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DAYTON. It is with a heavy heart I rise to speak against, and 
later vote against, this bill before the Senate. I campaigned in 
Minnesota on the need for prescription drug coverage for senior 
citizens. I said consistently I would vote for a responsible bill. 
Something was better than nothing. I voted a few months ago for the 
Senate-passed bill despite considerable reservations. It was better 
than nothing.
  That Senate bill contained my ``taste of their own medicine'' 
amendment which would require Members of Congress to live with the same 
prescription drug coverage as we have for seniors and other Medicare 
beneficiaries. That amendment, which passed the Senate by a vote of 93 
to 3, was stripped out of the conference report as, evidently, some 
Members were promised it would be. That should tell the American people 
everything they need to know about this bill. It is not good enough for 
Congress.
  Some Members of Congress are trying to sell this legislation as good 
for seniors and other Medicare beneficiaries of America, but it is not 
good enough for them to live under. That is the height of hypocrisy. It 
is good enough for the senior citizens of this country, it is the best 
we will vote to provide for them, but, sorry, we will pass on it for 
ourselves. Why is Congress opting out of this coverage if it is so 
good? Why is it only half as good as what Members voted to provide 
themselves and their families and their employees?
  First, the program does not begin for 2 years, not until January of 
2006. Until then, the senior citizens of America are going to have 
their opportunity to get another drug discount card. There is a novel 
idea. There are only how many dozens available already to seniors?
  This one plays special favorites. A senior with an income above 150 
percent of poverty, approximately $13,000 per year of income and 
approximately $16,000 a year for a couple--they get a drug discount 
card and nothing more. A single senior with an income just under that 
amount, by even a couple dollars, or a married couple with an income 
similar, just a few dollars under that cut off level, gets a drug 
discount card plus $600. It is all or nothing. Either $600 or nothing.
  I am strongly in favor of helping low-income retirees but certainly 
on a more equitable basis than $600 or nothing. That is all that is 
available for seniors for the first 2 years.
  I would think the administration and others who decry the 
bureaucratic ineptitude and want to dismantle whole structures of 
Government would say something about this kind of ridiculous delay. Two 
years from passage to inception, for what? To give insurance companies 
time to write insurance policies? Or to shortchange seniors for 2 years 
to get the 10-year costs of the bill down? What is the reason for this 
ridiculous delay?
  Whatever it is, if a program such as this cannot be initiated for 2 
years, that is a compelling reason to junk this program and find one 
better. Seniors of Minnesota and America have waited too long already 
to get good comprehensive prescription drug coverage. They should not 
be told they have to wait another 2 years before the program can even 
begin. That should be reason itself to find another way.

  When it does begin, what does the average senior get? He or she pays 
an annual premium of about $420 with an annual deductible of $250 and a 
25-percent copay for the next $2,000 in expenditures in that 1 year. In 
other words, $500 of the $2,000 of costs. So if you add those up--$420 
premium, the $250 annual deductible, the copay of $500, the

[[Page S15712]]

senior is paying $1,170 of the first $2,250 annual costs for 
prescription drugs. In other words, just over half.
  But the next $2,850 of the costs for that senior citizen in that 
single year have to be paid entirely by the senior, everything out of 
their own pockets. That means for the first $5,100 of annual expenses 
for prescription drugs--which is not, unfortunately, beyond the pale 
for many seniors--the senior citizen pays $4,020. The Senior pays for 
80 percent of the first $5,100 of annual prescription drug expenses. 
Above that, catastrophic coverage kicks in and the program pays 95 
percent of the balance for that year but then the next year it starts 
all over.
  Something is better than nothing, but to delegate $400 billion over 
10 years for coverage that seniors have to wait 2 years to begin and 
then they have to pay $4,000 of the first $5,100--all of that to save a 
little over $1,080 is something but it sure is not much.
  If that were all the bill did, I still would support it reluctantly 
because something is better than nothing. Unfortunately, the bill does 
worse than that; 2.7 million seniors estimated by the Budget Office now 
covered under private plans will lose that private coverage and will be 
relegated to this coverage which is far inferior to what they have now. 
That would include an estimated 40,000 Minnesotans. People who worked 
all their lives for a private employer and are now covered under that 
plan would lose it and be shifted to something much worse for them and 
what they have now.
  For over 7 million low-income elderly, the poorest of our poor senior 
citizens, they will pay more as they get shifted from Medicaid to 
Medicare. Their copay will increase and their choice of prescriptions 
will be reduced. That will affect almost 90,000 people in my State of 
Minnesota.
  The worst result in this bill is a prescription for higher and higher 
drug prices for all Americans that all Americans will have to pay. All 
Americans will have to pay out of their own pockets for their own 
prescription drugs and they will have to pay out of their own pockets 
for this program and other Government programs because the way this 
bill is written, the drug companies profit and everyone else has to 
pay.
  There will be no drug reimportation from Canada permitted unless the 
Secretary of Health and Human Services certifies the safety of 
all, which is something that the Secretary's predecessors in the 
previous two administrations did not do and this Secretary has 
indicated he will not do either.

  It is a totally unrealistic requirement to put on a Secretary to give 
a blanket certification of the safety of everything that would 
transpire.
  If the Secretary of Transportation had to provide that kind of 
guarantee for all air travel in the United States, we would not have an 
airline network functioning because no one could be expected to give 
that kind of guarantee.
  But the people who wrote this bill were very clever. They will not 
prohibit reimportation themselves, even though that is the result they 
want. No. They pretend the opposite, that it is permitted if--if--the 
Secretary of Health and Human Services certifies safety, something they 
know he will not do.
  The irony--or the absurdity really--is that according to Congressman 
Rahm Emanuel, one of the coauthors of the reimportation bill in the 
House of Representatives, the United States imports $14 billion worth 
of foreign-made drugs into the United States every year--$14 billion of 
prescription drugs that are manufactured in countries such as Ireland 
and elsewhere that are imported into the United States and distributed 
to U.S. pharmacies and then sold to American citizens.
  Those exact same drugs are manufactured in exactly the same plants, 
in the exact same countries, such as Ireland, and are shipped into 
Canada and distributed to Canadian pharmacists; and the only 
difference--they are exactly the same; the same product, manufacturer, 
packaging--the only difference is in Canada the price is one-third what 
it is in the United States or one-fourth what it costs in the United 
States or even as little as one-fifth or less than what it costs in the 
United States.
  That is the only difference: the price. Yet all of my colleagues who 
are free trade proponents and those over in the House want to repeal 
NAFTA just for prescription drugs, which is one of the areas where the 
American consumer would benefit most decidedly, enormously, from NAFTA, 
from free trade, from the ability to go to another country and take 
advantage of those lower prices.
  No. Sorry. Under this legislation, the result will be you Americans 
must buy your drugs in the United States, and only in the United 
States, at prices two or three or four times the world market price.
  Now, why are the prices so much lower in Canada than they are in this 
country? It is because the Canadian Government stands up for its 
citizens and negotiates prices that are lower and will not agree to 
prices that are exorbitant. And their citizens are the beneficiaries of 
these prices that are one-third, one-fourth, one-fifth of what they are 
in the United States--not even close approximations.
  People say the Government ought to act more like a business, and they 
are right. What we are proposing the Government would do is exactly 
what large corporations which self-insure or HMOs do, which is to 
purchase volumes of prescription drugs at negotiated discounts of 30 
percent, up to 50 percent. It is exactly what my colleague Bob Graham 
from Florida has pointed out, that the Veterans Administration does 
quite successfully, with fantastic savings for veterans and for the 
American taxpayers who pay for part of the cost of that program.

  But not under this legislation. This legislation would prohibit what 
they call Government interference in price setting negotiations. Why? 
Well, once again, the words of the bill belie the intent and the 
result. It says: ``in order to further competition.'' What deception 
that is. It says, let a bunch of small-competitor plans offer nickel-
and-dime savings, but prohibit the Government from insisting upon and 
getting 5 times, 10 times that amount of savings, savings that would 
benefit everyone in America--seniors and everyone else. Those price 
reductions would be reflected in domestic market prices.
  The critics call it price fixing. Well, there is price fixing now in 
this country. It is the drug companies that are doing the price fixing. 
They are given monopolies, called patents, for 15 to 20 years or more. 
They set the prices, they raise the prices, and we have to pay the 
prices. But that kind of price fixing, I guess, is all right according 
to some who want to prohibit the Government from doing so.
  Does anybody really believe Americans are going to be upset about 
paying lower prices for prescription drugs? Does anybody think 
consumers in America are going to say: Government is acting in a way 
that I don't support? In fact, it will be the opposite. People will 
say: Wow, my Government is doing something for me. My Government is 
standing up for me against these big corporate entities that I don't 
have the ability to face by myself. I don't have that purchasing power. 
I can't go to a drugstore and negotiate price. Even as a pharmacist I 
can't negotiate a different price. My Government is standing up for me 
the way the Canadian Government is standing up for their citizens. By 
golly, my Government is doing something right.
  But the people who wrote this bill are so anti-Government that they 
will not even let Government do something right. They will not even let 
Government do something that would have enormous financial benefit for 
all the people of this country that would save them billions of dollars 
of expenditures because I guess it might contradict their ideological 
absolutism that Government does everything wrong.
  Well, it also might cost the drug companies, the largest contributors 
to the Federal political campaigns--it might cost them, I guess, some 
of their millions of dollars of profits, coming out of the pockets of 
people we are supposed to represent.
  It is a big victory, this bill, for the corporate drug dealers. You 
have to give them credit. All those lobbyists--what is it? They 
estimate there are six times the number of lobbyists for the 
pharmaceutical industry for every Member of this body. Well, it sure 
paid off for them this time. They won everything. They got uncontained 
price increases for years to come, a market group, 39 million seniors 
who will have help pay them, who will pay those

[[Page S15713]]

higher prices, and everyone else paying higher prices, and a captive 
market, where they are not even able to go someplace else and take 
advantage of lower prices elsewhere. The drug companies want 
everything.
  The Medicare manipulators, they are the other winners. This bill is 
supposed to be about providing the best possible prescription drug 
coverage for senior citizens. Now we find out all these ambushes of 
various aspects of Medicare are tossed in that were not considered by 
the Senate, for which there were no hearings. And there were not votes 
on these matters. They were either put in the House bill or stuck in 
the conference committee behind closed doors where no one else could 
see what was going on.

  The program reform in Congress has become like a drive-by shooting. 
With no forewarning, somebody picks a target, shoots a bunch of holes 
in it, and takes off. That is our version of reform. That is what we 
are doing here with no forethought.
  Another example is special education. We have waited 3 years for so-
called reform of special education, which is always used as the reason 
we cannot spend the money that is necessary to fulfill a 27-year old 
commitment. And then suddenly, last week, lo and behold, there was 
unanimous consent for 2 hours of debate, evenly divided, on IDEA 
reform, and, boom, we are going to have it done, boom, in time to go 
home and eat turkey.
  Unfortunately, we produce enough turkeys right here with this 
legislation. Unfortunately, this bill we have before us is one of those 
turkeys. And I say that with no pleasure at all, given the importance 
of it. But this is a $400 billion turkey that gives first pickings and 
all the gravy to the corporate drug dealers and the big insurance 
companies and the big plan providers. Some seniors get the leftovers, 
and the American taxpayers get the neck and higher drug prices for 
themselves and higher payments through this program and others, 
subsidizing prices that are just exorbitant and that I would be ashamed 
to support.
  There is a better bill that could be written. There is a better bill 
that could be passed. There is a better bill that could benefit the 
people of Minnesota and the people of this country. With a 2-year 
delay, we could come back next year and pass that bill and still enact 
it and get it implemented sooner than this one. That is the course of 
action we should take.
  We should reject this conference report, not for nothing, but for 
something better because the American people deserve something much 
better than what is being foisted on them here.
  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. SMITH. Mr. President, I ask unanimous consent to speak for 5 
minutes.
  The PRESIDING OFFICER. The Senator has that right.
  Mr. LAUTENBERG. I have a question, Mr. President, about the process. 
Is the time available under the cloture rule divided between two sides 
in equal parts?
  The PRESIDING OFFICER. No, there is no provision for equal division 
of time.
  Mr. LAUTENBERG. So that any speeches now are made under cloture.
  The PRESIDING OFFICER. The Senator is correct.
  The Senator from Oregon is recognized.
  Mr. LAUTENBERG. I thank the Chair.
  Mr. SMITH. Mr. President, for the information of my colleagues, 
Senator Clinton and I are going to speak briefly and make a unanimous 
consent request with which I think he would agree.
  Having listened to my colleague from Minnesota, I think many of us 
come to this historic day on this vote on Medicare with some 
trepidation but, frankly, with a lot of hope. Everyone knows that 
Medicare, as it is currently constituted, does many good things for our 
senior citizens. We also know they need a prescription drug benefit. 
And we also know we are just about to add $400 billion for that 
purpose. There are reforms in this we hope will work, but reforms which 
will make us enlightened as to how best to preserve Medicare in the 
future. I believe that is the bipartisan motive behind all of this.


                   Unanimous Consent Request--S. 1839

  Mr. SMITH. Mr. President, I sought recognition to talk about our 
economy and, frankly, the need to extend unemployment benefits. It is a 
fact that long-term unemployment reached a 20-year high and the job 
outlook for the future, though improving, still leaves an awful lot of 
people wanting and unemployed as this holiday season approaches. For 
example, in my State of Oregon, we are down from 8 percent now to 7.6 
percent. This is simply too high. Despite this economic reality, the 
Federal program that provides Federal unemployment benefits is set to 
run out next month unless we provide an extension.
  We have extended these benefits several times since it was created in 
March 2002. I believe we need to do so again. Millions of unemployed 
workers have reached the end of their benefits without finding work, 
and thousands more continue to run out of their State unemployment 
benefits at the highest rate on record.
  My concern is that Congress is going to recess and go home without 
providing the assistance jobless Americans need and deserve. This 
month, Senator Clinton and I introduced the Temporary Extended 
Unemployment Compensation Program for an additional 6 months of 
unemployment benefits. She and I have introduced this bill because the 
current unemployment insurance program will run out in June, unless we 
do this. It would then run out in June and phase out by September 30. 
This is a modest extension for Congress to pass, but it is vital to 
many unemployed Americans, particularly those who have lost not only 
their jobs but their homes, health care, and more. We simply cannot 
leave families out on a limb while they are looking for jobs. This is a 
bill that will help them provide for their basic needs while making 
their job searches a little easier.
  I urge my colleagues not to leave Washington for the Thanksgiving and 
Christmas holidays without passing legislation to lend a helping hand 
to those Americans most in need.
  Before I propound a unanimous consent request, I yield time to my 
colleague, Senator Clinton of New York, for her comments, and then 
would make my request.

  The PRESIDING OFFICER. Without objection, the Senator from New York 
is recognized.
  Mrs. CLINTON. Mr. President, I am very pleased that my colleague 
Senator Smith has taken the lead in asking for an extension of the 
Temporary Extended Unemployment Compensation Program. One might wonder 
why we are having to do this, but the simple explanation is that once 
again we have run out of time. People will run out of their benefits by 
the end of this year. If we go home for the Thanksgiving and Christmas 
holidays without acting, there will be many Americans and a lot of 
people in Oregon and in New York who are not going to have the 
continuing help they deserve in these times.
  We have extended unemployment insurance with bipartisan support in 
the Senate three times in the last 2 years. I am very proud of that 
because I think it shows how we can work together to help those who 
deserve our assistance.
  Because we are not coming back in, as I understand it, until January 
20, we won't be able to do that if we don't act now on the Senator's 
proposal. If we do act now, the House, which is coming back in early 
December, will be able to similarly act and the benefits will flow.
  It is significant, too, that Senator Smith and I are in the Chamber 
asking our colleagues to join us because the State of Oregon and New 
York City have the highest unemployment rates in the entire country. 
New York City has an unemployment rate of 8.2 percent. We have never 
recovered from the effects of September 11. Oregon has an unemployment 
rate of 7.6 percent. So both the Senator and I are very concerned about 
the good people we represent on opposite ends of our country who have 
been out of work for a long time. We know long-term unemployment is at 
the highest level it has been in 20 years. We need to give them some 
additional time.
  This extension would provide another 13-week extension until June. I 
would urge support of Senator Smith's proposal. If I am not already 
listed as an original cosponsor, I ask unanimous consent that I be so.

[[Page S15714]]

  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. CLINTON. I yield back to the Senator from Oregon.
  The PRESIDING OFFICER. Without objection, the Senator from Oregon is 
recognized.
  Mr. SMITH. Mr. President, I ask unanimous consent to proceed to the 
immediate consideration of S. 1839, to provide additional Federal 
benefits for the unemployed.
  The PRESIDING OFFICER. Is there objection?
  The Senator from Nevada.
  Mr. ENSIGN. Mr. President, reserving the right to object, I want to 
make a couple of points. Point one is that we have seen that the 
economy is recovering. We are at about a 6 percent unemployment rate 
nationwide. Back in 1993, the Democrats controlled the House of 
Representatives, they controlled the Senate and they controlled the 
White House. Extensions of unemployment benefits had been going on for 
a period of time because of the recession. And with the Democrats in 
control of both Houses and the Presidency, they terminated the program 
when the national unemployment rate was at 6.4 percent. The national 
unemployment rate was .4 of a percent higher than it is today.
  The current extension of unemployment benefits does not end until the 
end of December. In December, individuals currently receiving extended 
benefits will still maintain those benefits. And based on all the 
projections, the national unemployment rate should be lower at the end 
of December than it is today.
  There are a couple other points that need to be made in this debate. 
First, when the unemployed are about to exhaust their unemployment 
benefits, over half of those unemployed individuals get a job in those 
last 2 weeks. And we have seen that a lot of people lately have been 
exhausting the full time on their unemployment. Why is that? Well, for 
one reason: The States have been reducing the amount of job searching 
required by each individual. Basically, they are making it easier to 
stay on unemployment insurance and taking away the incentives to go out 
there and get a job.
  The welfare reform bill, signed into law by President Clinton, 
characterized Republicans as throwing women and children out into the 
streets, that we were cruel, heartless, hard-hearted people. But we 
knew something about human behavior. We knew that if we gave some 
assistance, some temporary assistance, and gave individuals an 
incentive to be employed, in other words that it was better to get a 
job than it was to be on welfare--we knew that a lot of people would go 
out and get jobs. What we didn't know was the staggering number of them 
who did.
  Unemployment insurance is the same way. The more generous the 
benefit, the easier you make it to stay on unemployment insurance, and 
the less incentive there is for people to actually go out and do what 
it takes to get a job. So this is not about being cruel and heartless. 
It is recognizing the fact that our unemployment rate is less today 
than it was in 1993, when the Democrats were in control and every 
single Democratic Senator and House Member voted to end the program 
when the unemployment rate was higher than it is today.
  Every single Democrat voted to end the program. With that, I 
appreciate the work they are trying to do. I know their hearts are in 
the right place. But on policy grounds, I object.
  The PRESIDING OFFICER. Objection is heard. The Senator from New York 
is recognized.
  Mrs. CLINTON. Mr. President, I believe we are to go back on the 
schedule for the postcloture Medicare debate; is that correct?
  The PRESIDING OFFICER. The Senator is correct.
  Mrs. CLINTON. Mr. President, I will say a few words and then yield to 
my good friend from New Jersey. Before I get into the Medicare debate, 
I wish to say some concluding remarks in response to my colleague from 
Nevada.
  At the rate that job creation is going under this current 
administration, we have one job opening for every three applicants, and 
it will take the next 19 months to get to the level of jobs we had 
before the March 2001 recession started. So I think we are mixing 
apples and oranges here.
  This has been a jobless period. One can argue about whether or not 
there has been any kind of recovery. I would take issue with people 
suggesting it, but if they do, then they need to use that oxymoron ``it 
is a jobless recovery,'' because the economy sure is not creating jobs. 
In addition, we have places such as the one my friend, the Senator from 
Oregon, represents, and my State, where the unemployment rate is far 
above the national average. There is no way to say New York City, with 
an 8.2-percent unemployment rate, is creating jobs again. It is not 
happening.
  I have a little problem with this idea that we are comparing welfare 
recipients with people who lost their jobs. Welfare recipients didn't 
have jobs, by definition. The whole effort in the 1990s was to create 
circumstances in which people could move from welfare to work. What we 
have now are people moving from work to nothing. We have no safety net. 
So we are telling people who have worked hard, done what they were 
supposed to do, been laid off from airlines, or telecommunications, or 
financial services, whose jobs have gone to India or China, and there 
are no jobs to replace them, we are telling them: Tough luck, happy 
Thanksgiving, Merry Christmas, Happy New Year.
  If that is what the other party wants to send as their Christmas 
greetings to their constituents, that is certainly their right. It 
certainly seems not to be in the spirit of the holiday we are about to 
celebrate.
  It is factually inaccurate to say there are jobs being created, and 
all we have to do is really put the pressure on these people and make 
it impossible for them to do anything other than go get a job. That 
would be great if there were jobs to be gotten.
  Given the combination of the economic and budget policies of this 
administration, I don't think we are going to have those jobs 
available. I predict to you that even if we have an unemployment rate 
nationally of 6 percent, or 6.1 percent, or 6.2 percent, we are not 
going to have the jobs coming back because this administration has 
presided over the largest job loss in American history since Herbert 
Hoover. If I were on the other end of Pennsylvania Avenue, I would not 
want to be reminded of that, either. I would not want there to be an 
up-or-down vote on whether or not to extend unemployment insurance 
because, if do you that, you admit the obvious: You know what, we are 
not creating jobs and we have to do something to help people.
  I regret that the effort my friend, Senator Smith, and I have joined 
together in trying to accomplish has been objected to; namely, to bring 
about an extension of unemployment benefits, which strikes me as not 
only the right thing to do but the smart thing to do, because every 
time we extend unemployment benefits to the people who truly need them, 
you pump more money into the economy, which may create a job or two and 
obviate the need for uninsurance benefits in the future.
  We will be back, as we were last year. We are not going away, 
obviously. This is something about which we care deeply. It is the 
right thing to do. If I thought we were having the kind of economy in 
the future that we had starting in 1993, I might have a different idea, 
but that is not what is going to happen. All the happy talk 
notwithstanding, that is not going to happen.
  Mr. President, I will now move to the Medicare conference report. I 
have to tell you that the more I learn about this proposal, the less I 
like it, the less fair I think it is, the less useful for our seniors.
  Just recently, because we got this 1,200 page bill 4 days ago, 
including a weekend, when people were combing through it, our experts 
were trying to read it. I can guarantee you that if you put two 
Senators up in the well of the Senate on opposite sides of the bill, or 
even on the same side of this bill, they would not agree on every 
provision because there is not anybody who fully understands what is in 
this bill.
  But what I just learned is that three important items from the Senate 
bill were changed in conference, in addition to everything else we know 
that was changed--all the big things, including the reimportation of 
drugs, the limitation on premium support, the lack of any kind of 
support for HSAs, all of those things which changed. Here are

[[Page S15715]]

some additional changes which are now coming to light as people comb 
through the fine print of the bill.
  First, we thought seniors would know at the time of their enrollment 
in these private plans what drugs would be on the list. That is called 
a formulary. It is kind of a fancy term. There are lots of fancy, 
confusing terms in this bill. My colleague, Senator Boxer from 
California, has a mind-boggling chart, where she and her good staff 
have pulled out all kinds of words that no normal human being 
understands. Heaven forbid, I don't think abnormal people understand 
them. They are made-up words that describe these processes and events, 
and nobody understands what they really mean.
  So we now found out that these formularies--the list of drugs that 
would be offered by a plan--are not necessarily going to be available 
to a senior when that senior signs up.
  Now, imagine that. Think about my 84-year-old mother, who takes a 
number of prescription drugs that are very specific and assigned to her 
by her physician to meet her needs. Her doctor says: This is what you 
need, and here is your prescription. So in 2006 or 2007, when she signs 
up for one of these plans, she is not going to know whether the plan 
includes a particular drug that she needs. I find that a big problem, 
because how can you buy something when you don't know what it is you 
are buying?
  This is supposed to be a prescription drug plan. Therefore, 
prescription drugs are at the heart of it. If you don't even know which 
drugs you are supposed to get on your plan, that is not much of a plan. 
This is another typical example of the old bait and switch--maybe it is 
better to call it buying a pig in a poke. You don't know really what 
you are buying but you have to go out and buy it.
  Second, when the Senate sent the bill to conference, the Senate 
required that the 10 regions determined by the Secretary of Health and 
Human Services would be larger than a State. Now, that was supposed to 
assure that we avoid the problem we now have with Medicare+Choice, 
where HMOs serve some counties but withdraw from or refuse to serve 
other counties.
  I have that problem all over my State. The most intensely organized 
seniors in my State are seniors who have had a bad experience with 
HMOs--HMOs that came into their county and left them high and dry at 
the end of the year; HMOs that came in and, when they found they had no 
competition, raised the costs right in the middle of the year. Or at 
the end of the year, when it came time to change and they were the only 
game in town, they really increased costs to our seniors.
  But the conference report, instead of taking the Senate requirements, 
eliminates it--eliminates the requirement that the insurers must serve 
an entire State or a large region.
  I also know that as a Senator from New York, I have a special 
obligation toward the people of Puerto Rico. We have a lot of Puerto 
Ricans in New York. We are very proud and I am very honored to 
represent a large Puerto Rican population in New York. But the 
conference report has less money than the Senate bill for prescription 
drugs for Puerto Ricans. I know it always comes as a surprise to some 
people to learn that Puerto Ricans are American citizens. They are not 
some alien group over here. They are American citizens. They don't live 
in a State, but neither do the people who live in the District of 
Columbia, but they are American citizens, too. For some reason, we are 
not providing adequate funding for the people of Puerto Rico to get the 
prescription drugs to which American citizens under this bill are 
entitled.
  Those are three hidden provisions in the fine print that we just 
discovered today. Now we are going to have to vote on this bill today 
or tomorrow, and we are going to be setting ourselves on a course that 
will radically change Medicare.
  Why should people care? If you are not 65 or older, if you are not my 
mother's age, if you are not even closing in on Medicare, as I am, why 
should you care if you are my daughter's age or one of these young 
people working in the Senate in their thirties or forties? Why should 
you care?
  I would argue you should care because, No. 1, in our country we try 
to keep faith with each other by providing a safety net for seniors, 
for people who fought the wars, raised their families, built their 
businesses, and served their communities. We thought ever since 1965, 
when Medicare was passed, that it was really good for America to make 
that commitment to our parents and our grandparents. It was the right 
thing to do. It was the moral thing to do. It was the smart thing to 
do. Before 1965, the poorest people in America were people over 65. Now 
there are poor children. We have had a massive transfer of wealth to 
take care of our parents and grandparents through Social Security and 
Medicare. I believe we have neglected our children. We have about 22 
percent of our children living in poverty. I am not proud of that, but 
I am proud of what we have done through Social Security and Medicare.
  If we are starting to unravel that now, that says something about who 
we are as a people. It says something about this generation of American 
leadership compared to previous generations.
  Why else should you care if you are not a Medicare beneficiary? Maybe 
you are the son, the daughter, or a grandchild of a Medicare 
beneficiary and maybe you will want to do the right thing if your 
grandparent or your parent has some kind of medical problem and they 
cannot afford to pay for it themselves, and you want to step in and 
help because that is the kind of person you are. And I hope that 
describes the vast majority of our young people in our country today.
  That may be tough because maybe you are saving to send your own child 
to college or maybe you are saving to buy your first house. Then all of 
a sudden, a medical catastrophe strikes, and what used to be Medicare 
to provide that safety net is just not there anymore in 2010 or 2012. 
All of a sudden, the burden falls back on you.
  Why else should you care? Because in this bill it is not only about 
undermining Medicare, it is about undermining health insurance in 
general. We already have an increasing number of uninsured people, and 
we are going to have even more of them in the future because we have a 
totally dysfunctional system for financing health care that certainly 
does take care of insurance companies and their executives and 
pharmaceuticals and their executives but doesn't do a great job for the 
average person.
  This bill will undermine insurance for everyone, not just for 
Medicare recipients. Why do I say that? Because there are no cost 
controls to keep the price of a prescription drug down. There is no 
bargaining power for the Governor to try to hold the pharmaceutical 
companies in line to prevent them from just blowing the top off 
whatever the price structure is. There is a really insidious provision 
that puts a limit on how much money we can spend on overall Medicare if 
the prices of Medicare go up--that is, hospitals, doctors, and drugs 
now--which means you have to cut back on everything, not just 
prescription drugs. So we are going to have Medicare recipients 
squeezed even more. There is such a thing called cross subsidization. 
What that means is, if you have insurance and you go to the hospital, 
you are not just paying for your services that you get, you are, in 
effect, paying for people who couldn't pay. For example, maybe the day 
before you showed up in the emergency room, Mrs. Smith came in after a 
terrible car accident or maybe some kind of acute asthmatic attack or 
other kind of serious problem, and she didn't have any insurance. The 
hospital takes care of her, but then they have to charge you, your 
employer and your insurance company more to pay their bills. Anytime 
you transfer money away from direct care, you are forcing more people 
to pay more for the same care. Some of them will be unable to afford 
it, but the cost to the providers of that uncompensated care will, in 
turn, raise the price which, in turn, has employers dropping people 
which, in turn, creates more uninsured individuals. It is a closed 
system. It is a circuit. The circle should not be stressed. This breaks 
that circle. This takes the security of Medicare and pulls it right 
out, causing all sorts of effects throughout the circle.

  The reason we created Medicare in the first place was that insuring 
older people who might be more sick and more frail is not a profitable 
enterprise. There are people who retire and go to some beautiful place 
and play

[[Page S15716]]

golf all the time. They are physically fit and they look great when 
they are 75, but now they may live to be 100, 25 more years. At some 
point, the body starts breaking down no matter how well you take care 
of yourself.
  Medicare was the idea that we needed to provide a product because the 
marketplace would not provide it, and this bill proves the wisdom of 
that because the only way you are going to provide these benefits is 
basically by subsidizing or, some might say inelegantly, bribing 
insurance companies with billions and billions of taxpayer dollars to 
provide this benefit that they would not ordinarily provide because it 
is not cost-effective; it is not profitable.
  There are many other reasons this Medicare bill is not in the best 
interests of either Medicare recipients or our general population.
  It is a sad day when we essentially devise this scheme to try to 
transfer money from the Medicare system and the taxpayers' pocket to 
those who are already doing very well, indeed. Probably the saddest 
thing to me is not what might happen to the average Medicare recipient, 
which I deeply regret, but to the poorest of our Medicare recipients, 
the people who don't retire from an office job or some other 
undertaking that gives them the resources to move to some warm place 
and play golf every day, but the vast numbers of people who are sick, 
who are frail, who are chronically ill, who are poor, and who end up in 
nursing homes. Six million of them will be worse off under this bill. 
That is really hard for me to accept. I do not understand how a great, 
rich nation like ours can come to this point, where we impose new and 
extra burdens on the poorest of the poor and the sickest of the sick.

  I guess we think if somebody is in a nursing home and not out at a 
golf course that we will not see them; we will not care; we will not 
know. Maybe that is true if it is not your relative, your neighbor, 
your colleague, or your friend. But 6 million low-income, chronically 
ill or nursing home bound Medicare beneficiaries will be worse off 
under this bill because of formularies or increased co-pays. I find 
this not only hard to justify but cynical, cynical because some folks 
are making a bet that those poor people are not going to raise a fuss 
or a ruckus: Out of sight, out of mind.
  They will not show up to vote or certainly not give anybody any 
campaign contributions. So basically they do not exist. So we can turn 
our back on them.
  I do not understand what has happened to our country. I do not 
understand what we believe about our obligations to one another or our 
values when we would do that to our fellow citizens. I also do not know 
what universe some people are inhabiting because none of us knows what 
is going to happen tomorrow. Not a single one of us can predict when we 
might need help, when we might have that accident, when we might get 
that terrible diagnosis. We do not know.
  I thought the golden rule was the overriding philosophy that should 
guide us, but unfortunately in this bill that stands for an insurance 
company that is going to get billions of dollars for the unproven 
concept of health savings accounts. That is not what I learned in 
Sunday school but what somebody else figured out how to make some money 
off of.
  It is a sad story, but I have a lot of confidence in the intelligence 
of Americans and particularly for the generation that lived through the 
Great Depression and World War II. I am about to yield the floor to one 
of them. He is someone I admire and think so highly of, who had a lot 
of blessings in his life and never forgot where he came from. He never 
turned his back on people who were less fortunate than he was because 
he knew the basic lesson that I think some people forget--there but for 
the grace of God go I.
  If that were our hallmark, we would not be passing this bill, which 
puts so many of our seniors at risk, but even more than that puts at 
risk what we mean when we talk about America and American values.
  I yield to the Senator from New Jersey.
  The PRESIDING OFFICER (Mr. Cornyn). The Senator from New Jersey.
  Mr. LAUTENBERG. I thank my colleague from New York for her eloquent 
statement and her perception about what is really taking place in front 
of us. We both have the good fortune to share one of the most 
interesting areas of this country, the center for finance, industry, 
and trade, and people, yes, who have to work hard to maintain their 
living in this high cost area that we share.
  One of the problems we see in both of our States is that unemployment 
is unreasonably high; that people who used to work in manufacturing in 
the New York City region, in New Jersey, have lost jobs that are not 
available to be regained. It is a pity, but what has happened is that 
they were sold out to cheaper prices. We are looking for things cheaper 
while many of us revel in the fact we can live by such luxurious 
standards.
  What does it tell us? It tells us there is a significant imbalance 
out there in the way people earn their livings, live their lives. That 
is one of the things that is so much in our view today when we talk 
about the outcome of the vote thus far on this purported Medicare bill. 
It does not have the ``care'' and I am not sure it even has the 
interest.
  One of the things we are looking at is whether or not people who have 
had the good fortune, as I have--as said by the Senator from New York, 
I have had very good fortune. My father died when he was 43. His father 
died when he was in his middle fifties. His brother died when he was in 
his early fifties. I think the cause of death was probably 
occupational. They all worked in the same factories in the city of 
Patterson, NJ, where I was born. My father's death left a permanent 
imprint on me because of the circumstances of how and when it occurred.
  My father was 43 in the year 1943. He lived his life by the 
healthiest of standards, including the food that he ate. He disavowed 
smoking in a very vigorous way. He was not someone who drank a lot of 
coffee. In fact, he did not drink any coffee. He enjoyed his nonworking 
time by being in a gymnasium. They did not call it ``workout'' then. 
They called it exercise. They called it the ``gym.''
  So he would spend time down there. He used to like to lift weights, 
wrestle, and play basketball. One day, he was not feeling well and he 
went to a doctor. The doctor informed our family that my father had 
colon cancer, a condition that gets ever rarer with the medical care we 
have today, if it can be afforded. No matter what we did, without the 
advances that we have today and medical technology and medicines, he 
suffered for 13 months. From a well built, muscular man, who was a 
picture of health to behold, he disintegrated before our very eyes 
until he died 13 months later.
  My mother was 36 when my father died. She was a very young widow. I 
was 18. I had already enlisted in the Army. Why this story? Because it 
is seared so deeply in my memory. Not only were we grieving, we were 
poor, and my mother strained to make a living as my father was in his 
illness. I had a job loading trucks. That was my skill. That was my 
experience. We just about kept ends together.
  When my father died, imagine a family of four--I had a little sister 
who was 12--grieving over the loss of a father at age 43, so young, and 
also at the same time worrying about bills that had to be paid, about 
obligations that occurred as a result of hospital treatment, bills that 
occurred because of doctors' visits, bills that we had to pay because 
we owed pharmacists money. That is what I remember. I thought, oh, my 
goodness, if only we could find the money to pay the bills so my mother 
and I didn't have to worry so much about our existence and at the same 
time honor our obligations. We were that kind of a family.

  Then, as time passed, we saw developments in America that made us all 
proud and that, frankly, I think should have caused us in this body to 
be more tender, to be more understanding, to be more sensitive to the 
people who have been able to live long enough to be eligible for 
Medicare and Social Security and all of that that is intended to reward 
people for their work to build this country. Many of these people come 
from what has been described as the greatest generation. If they 
weren't exactly in that generation, they were in the generation that 
continued to build our country through the 20th century

[[Page S15717]]

to make this a stronghold of industry and business and technology and 
education. That is what these people did who are now concerned about 
how they continue their life.
  Oh, of course, a lot of them can get jobs if they want them at school 
crossings, at $5.50 an hour, $206 a week--have a good time, go to a 
restaurant and have dinner. Not on your life.
  That is what should have been thought about as we debated this issue. 
There was a certain degree, I saw, of smugness, as they pirated votes, 
giving lots of money--$11 billion, $12 billion to a special interest 
here, special interest there, here a special interest, there a special 
interest. It reminds me of a nursery rhyme. But that was no game that 
was being played. They held open the vote in the House of 
Representatives way beyond the rules. They did anything they could to 
bypass the process as it was normally.
  I wish to show those who can see what I am holding, if I have the 
strength to hold them--I do. Those who witness this stack, who see it, 
this pile of paper, may say: What is the Senator talking about? This 
describes what was in this Medicare proposal in which the Democrats 
were not invited to participate. That is against the rules. The 
participation was limited. This was a stealth affair: Sneak it out, get 
it out there. Why? Because they don't want people to know what is in 
here.
  Do you know what else? Here is a little smaller part of this whole 
package. This says: ``Joint Explanatory Statement.'' This tells the 
audience who might read this what is really in this stack here. It is 
all mysterious. It is all arcane--can't really understand what is 
happening.
  Why is this debate so acerbic? Why is it that those of us, along with 
the senior citizens of this country, look as if we are losing this 
debate? It looks as if we are going to lose control of this issue. It 
is true, that we will have suffered a day in infamy, to steal an 
expression, because what happens here is we are going to assess poor 
people more costs.
  I come from the corporate sector. I was fortunate to be able to 
create one of America's great companies with two other young fellows 
who lived in the same area as I did. Both of them, like me, had fathers 
who worked in the silk mills. That was the trade in the city in which 
we lived. They had no money. Their parents had no education. But it 
gave them the incentive to create something for themselves.
  So we created a company. The company is called ADP. A lot of people 
know it. It is an international company with 40,000 employees. We 
started with nothing.

  One of the things I learned as the CEO and chairman of that company, 
before I came to the Senate, was that the most important asset my 
company had was not its customers. The most important asset we had was 
its employees, because if the employees did their job, the customers 
were there for us. We could render a service that was an invaluable 
beginning to outsourcing, to giving specialists opportunities to do 
jobs that they could best do. But one of the things we had to do was to 
make sure the employees were considered in everything we did, including 
health insurance, including an early start with daycare, to make 
certain our employees were happy and thus productive.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, if I could interrupt the distinguished 
Senator from New Jersey, I have a unanimous consent I would like to 
propound.
  Mr. LAUTENBERG. I am happy to yield, with the proviso that I regain 
the floor.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, pursuant to the rule, Senator Daschle has 
designated me the manager in opposition. Senator Levin is on the floor. 
Senator Akaka is on the floor. Pursuant to the rules, they have asked 
that I be given their 1 hour postcloture. They are both on the floor. 
Is that sufficient?
  The PRESIDING OFFICER. The Senators have that right under the rule. 
Is that the will of the Senators?
  Mr. LEVIN. Mr. President, I do ask unanimous consent that the hour 
which I might be entitled to under the postcloture rules be yielded to 
Senator Reid.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. AKAKA. Mr. President, I yield my time to Senator Reid.
  The PRESIDING OFFICER. The Senator has that right.
  Mr. REID. Mr. President, through the Chair to the distinguished 
Senator from New Jersey, thank you very much for allowing me to 
proceed.
  Mr. LAUTENBERG. I assume the time that would have been credited to me 
for my 1 hour, whatever time remains, is still available.
  The PRESIDING OFFICER. That is correct.
  Mr. LAUTENBERG. I thank the Chair.
  What I got today was a request from one of America's largest 
companies. I will not identify them because they are not unique. But 
they wanted us to pass this bill. They don't make pharmaceuticals; they 
don't do anything in the health care field; they are not an HMO. They 
are a manufacturing company, a gigantic company by any standards. They 
are hoping we are going to pass this bill.
  The reason they are hoping we would pass it is because then those 
retirees who are dependent on their health care continuation could be 
kicked off the system. Then, because of what we are saying in this 
bill--this hocus-pocus language that there will be some money to 
provide premium support for HMOs--go there and you will be able to get 
it cheaper, and this giant company, this unnamed giant company will be 
able to say: Whew, we are finally rid of those retirees who we promised 
we would give this care to all those years they worked for us. But now 
we don't have to keep that promise--no. All we have to do is say 
goodbye, thank you, we are eliminating coverage.
  In New Jersey, it means that about 90,000 people are likely to lose 
their company-provided health care.
  Coming from a State as I do--a State often called ``the Medicine 
Chest;'' it is a great State--we produce terrific products that make 
people feel better and help them live longer. I know because I use a 
couple of their products here and there. But the entire debate here is 
the result of the irrefutable fact that prescription drugs cost too 
much in this country. This bill doesn't do anything to fix that 
fundamental problem. All over the world, people pay less money for the 
exact same prescription drugs that they can buy cheaper in other 
countries.
  In Italy, Acoplex is 40 percent less than here in the United States. 
In England, it is 31 percent less than here in the United States. And 
just to the north of us, our friendly neighbor, Canada, the price is 37 
percent less.
  No wonder seniors are getting on buses and making the trip to Canada 
to get their medication.
  If you look at the things that we talk about, and see what happens 
when prices are not negotiated, the prices keep rising. From 2001 to 
2002, drug prices rose 17 percent. The only way to lower drug prices is 
to give Medicare bargaining power--just the opposite of what this bill 
does. This bill says they want to prohibit giving what is normally 
called volume discounts. Instead of taking this step to lower prices, 
this bill explicitly forbids it.
  The company I was talking about with a health plan has over 1 million 
employees. They want us to pass this bill. Imagine what happens when 
they say to their retired employees that they will be off their health 
care system.
  We know from experience that allowing agencies to use bargaining 
power brings down prices. A good example of this is the health care 
system run by the Veterans' Administration. The VA is encouraged to 
negotiate prices. In this bill, as it presently exists, they forbid 
Medicare to negotiate prices.
  I want to follow up on a point that our friend and colleague, Senator 
Bob Graham, made earlier today. This chart really tells the story. The 
chart compares VA-negotiated prices for medication with what it costs 
to buy from a local pharmacy.
  By way of example, Acoplex, a stomach acid product, in the drugstore 
it is $4.37. At the VA it is 22 cents.
  Let us take a product such as Zocor, to guard against high 
cholesterol which is very damaging to one's heart. If you want to buy 
it in the drugstore, you have to pay $3.77 per tablet, and if you are a 
member of the VA, their price is 66 cents. The list goes on.

[[Page S15718]]

  At the drugstore for aspirin at 325 milligrams, the cost is 20 cents. 
If you buy it in the VA, it costs a penny.
  Plavix to guard against heart attack and strokes, $3.63 per tablet; 
$2.01 if you go to the VA.
  The list goes on with even better known products. The price 
comparison is ugly at best when you consider what happens with people 
on Medicare.
  Mevacor reduces cholesterol--four bucks in the pharmacy and 26 cents 
at the VA.
  Many of these medications make the top 50 list of drugs used by the 
elderly. We ought to learn from that and not prohibit the VA from 
negotiating volume prices.
  Another troubling part in this bill is the effective date. When the 
Senate first voted on a prescription drug benefit for seniors back in 
June, I offered an amendment to make this benefit effective within 1 
year. But it was voted down with strong Republican assistance. Eleven 
votes made the difference. We passed that amendment with bipartisan 
effectiveness to make this benefit effective within 1 year.

  Under this conference report, the drug coverage doesn't start until 
January 2006, 23 months from now.
  We have to ask the question: Why is this taking so long? One clue is 
illustrated on this chart. Notice election day in the yellow box; the 
original Medicare Program was processed in 11 months. President Johnson 
signed the law on July 30, 1965, and 11 months later, July 1, 1966, all 
of the people who were eligible for the program were enrolled in the 
program. I know something about computer processing. I literally had my 
career grow in the computer development stage. They had to create the 
files. The identification had to be punched into cards. They weren't 
read electronically in 1965 as they are now. It took 11 months and the 
whole deal was done. It was created from the beginning in 11 months.
  Now we are asking for a toleration of 25 months to get it into place. 
But election day is here, and Heaven forbid that the public at large 
should find out about this bill. When they learn about it, they are 
going to be mad as could be.
  If they can get safely past election day, the rhetoric is out there 
flooding the country. They even have the American Association of 
Retired Persons supporting the bill. That is a mystery that we are 
going to have to find out about one day. A lot of people we get calls 
from--Medicare recipients and beneficiaries--are ripping up their 
cards. We got one batch that was 75 to 2 against the bill. There were 
two who were doctors also who are concerned about whether they will be 
able to continue their practice as it was. It is a reasonable question. 
But 75 to 2--that is while this bill is being discussed. The bill is 
not yet in place.
  Once the phone calls start coming into my office, I know what is 
going to happen. They are going to ask: When can we sign up? What are 
the benefits?
  We are going to say: Hold your horses. What is the rush? It costs you 
a lot of money later on. Right now, we have your temper down. Not so 
much your temperature but your temper is going to go up once you find 
out after election day that this bill is going to take place with 
higher prices for medical care and prescription drugs.
  The Democrats created Medicare. We protected it for decades. The 
Republicans never really liked it. They resisted the creation of 
Medicare and have opposed it ever since.
  It wasn't too long ago that a very well known leader of the House, 
Newt Gingrich, expressed his desire to see ``Medicare wither on the 
vine.'' That is what he wanted to see happen. He represented a view 
that was generally accepted.
  We may see it wither but not without a strong fight on our hands, 
even if we have lost step 1 here. The senior citizen population in this 
country has to raise the alarm and shout it out to those who are in 
this building and those who are in the House of Representatives. Tell 
them: We don't like that bill. It is going to cost us more. You are not 
helping us, you are hurting us. We worked our lives away with certain 
promises in place, and the promise included a proposition that said as 
you get older and as we see things develop, we are going to help you 
get those things to keep your health going.
  The bill before us today is the first major step toward 
disintegration of Medicare as we know it.
  In reality, this bill is not as much a benefit for seniors as it is a 
big benefit for HMOs, the private health care organizations, and other 
private-sector special interests who want to tear the Medicare Program 
to pieces. Get them in corporate hands so we can charge more, make 
more. I wonder whether we could limit the incomes of some of the guys 
at the top of these companies, in the interest of public service? We 
regulate lots of industry.
  So what is it specifically the President is afraid seniors will find 
out before 2006? Is the President afraid the seniors will realize they 
will pay at least $810 before they break even and get any benefit from 
this plan? For many seniors, that is more money than they currently 
spend on prescription drugs. Up to 30 percent of the beneficiaries 
would pay more for enrolling in the plan than they would receive in 
actual benefits. Is the White House worried seniors will learn there is 
a huge gap in coverage? Under this plan, a senior will pay a premium 
estimated at $35 a month, a $250 deductible, 25 percent coinsurance 
payments until reaching $2,250 in drug expenses.
  What happens then? Seniors then get no coverage. I have been heard 
correctly: Zero coverage. At that point, seniors continue to pay their 
premiums but they will also pay 100 percent of their drug costs. That 
is a double whammy, as we say in New Jersey. Only until they have 
reached a catastrophic limit of $5,100 in drug costs does any benefit 
restart. By that time, seniors will have incurred $3,600 in out-of-
pocket spending. This is the so-called hole in the donut. It does not 
sound like a good deal to me.
  Remember, nowhere in the bill does it say that premiums will be only 
$35. It could be significantly higher. The $35 is a current estimate. 
We know how good this administration has been at making estimates. Is 
the President afraid that seniors will figure all this out? You bet. 
Seniors deserve a much better program than that which the Senate is 
considering right now. They certainly deserve it before 2006.
  I will spend a few minutes more talking about the overall impact of 
this bill on seniors in the State I represent, New Jersey. The most 
important reason I am voting against this bill is I am convinced more 
seniors in my State will be hurt by this legislation than helped. There 
are approximately 1.1 million seniors in New Jersey. Because this bill 
provides a disincentive to employers to continue offering coverage to 
retirees, it is estimated that over 90,000 seniors in New Jersey will 
lose their existing, more generous retiree drug coverage from their 
former employer.
  This bill is also going to make poor seniors in my State worse off. 
In New Jersey, Medicaid covers drug costs for seniors with incomes of 
less then $9,000 a year for an individual or $12,000 a year for a 
couple. In New Jersey, low-income seniors currently on Medicaid have 
access to whatever drugs they need and they do not have a copay for 
their prescription. Under this bill, however, they are now going to pay 
$1 per prescription for generic drugs and $3 per prescription for brand 
name drugs.
  Low-income seniors tend to be in the worst health and have higher 
annual drug spending. A senior with $8,000 annual income does not have 
the discretionary income to shell out $15 or $20 or $25 for the 
prescriptions he or she may need.
  I will long remember the battles we have had in the Senate to try to 
raise the minimum wage. It is the old rhyme that says: Try, try again. 
We tried, we tried, and we tried, but we could not raise it. So there 
are people out there who are working for $5.15 an hour, $206 a week. 
Having to pay these extra burdens for their prescription drugs is going 
to be a torturous outcome for them. The low-income Americans can be 
forced to choose between providing medication or buying food, providing 
medication or keeping the heat on in the winter.
  This bill represents an enormous opportunity squandered. We had a 
real chance to do something right. We had $4 billion to improve the 
lives of 34 million seniors, 14 million of whom do not have any 
prescription drug coverage right now. Frankly, we missed the 
opportunity. We ought to scrap this plan and go back to the drawing 
board to give seniors a real prescription drug

[[Page S15719]]

benefit in the Medicare Program. Let's not try to move seniors into 
HMOs. Let's not leave that enormous gap in coverage. We should give 
seniors a plan that starts now, not in 2006.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Murkowski). The Senator from Connecticut.
  Mr. DODD. Madam President, let me first of all commend my colleague 
from New Jersey for a very fine statement on the pending matter, the 
Medicare bill. I intend to take some time to speak on the same matter 
and then I plan to yield my remaining time to the Democratic leader for 
his purposes.
  This is the third time I have spoken on this matter since last 
Friday. We are now in a situation, I am sure people are aware, where we 
have had a cloture motion which was approved earlier today. We then 
considered a point of order which was not sustained, and as a result 
our efforts to try to use a procedural move short of final passage have 
been, I gather, exhausted. So we are down now to the question of 
whether or not we ought to vote for this bill at this juncture or 
whether or not people will come to the conclusion there are enough 
flaws in the pending matter that we ought to take some additional time 
to review it before it becomes the law of the land.
  Before I get into some discussion of the substance of the bill, I 
will take a minute or so and talk about the process of law. Putting 
aside the matter before the Senate, which has obviously been 
contentious, I am very worried about how we are doing our work in this 
institution--not just this body but the legislative branch in general.
  I will have served, at the end of this term, some 30 years in the 
Congress, 6 years in the other body and 24 years in the Senate. I have 
enjoyed serving in this fine institution and watched it carefully over 
the years. In that time, I have noticed that there are ebbs and flows 
in how the institution functions and operates. There have been periods 
affectionately referred to as the golden age of the Senate and other 
times when they have been less than golden. I will not use language to 
describe what others have used to describe the less than golden periods 
of the Senate.
  I am very worried about how we are proceeding at this time with the 
underlying measure. It is so important in these institutions that we 
not only just be concerned about what we accomplish but how we go about 
working toward these accomplishments.
  The Founding Fathers of this country were very concerned about that. 
If they were looking for efficiencies of systems, if they were looking 
for a process that would guarantee quick results overnight, this is 
certainly the last system they would have constructed. Particularly in 
this institution, the Senate, the rights of a minority are paramount. 
We have always said in the other body, the House Chamber, the rights of 
the majority should prevail. And the Founders, in their wisdom then, in 
the creation of the Senate, emphasized the rights of a minority. In so 
doing, they wanted to guarantee that matters would be thoughtfully 
deliberated.
  I am very worried, over these last number of months, including the 
bill presently before the Senate, that we are not devoting the time 
necessary for deliberate consideration of matters before this body. In 
fact, I was stunned to just learn that when conferees were named on the 
Medicare bill before us--and for those who are not students of this 
institution or follow the Congress on a regular basis, when the Senate 
passes a bill, and the House passes a bill, invariably, with some 
exceptions, there are differences.

  So this body, the Senate, will appoint conferees, representatives of 
this body--usually from the committees of jurisdiction over the 
legislation--to meet with conferees of the other body, usually coming 
from their committees of jurisdiction. And those two smaller groups 
then meet to resolve the differences between the two bills.
  Over the years, of course, many conferences have been lengthy, many 
have been contentious, particularly those involving difficult matters, 
but it is the nature of the institution, learned over our 220-year 
experience that it is in the tension of debate that some of the best 
ideas emerge, when there is full expression of the views of the 
American public in those meetings, when people of different persuasions 
and ideologies come together and work to resolve their differences.
  What I find stunning is that it has become popular, in recent days, 
to have conferees named and then have conferees excluded from meeting 
in these conference committees. That is exactly what happened here with 
the measure presently before us. Whether you are a Republican or 
Democrat, liberal, conservative, or moderate, you ought to be deeply 
concerned if this becomes the precedent, the operating standard 
procedure, that when bills are passed and conferees are named, then 
people are excluded from meeting to try to resolve their differences.
  I can only suspect, Mr. President, that most Americans are not aware 
that this 675-page bill, the Medicare reform bill, was crafted by only 
Republican Members of the House of Representatives. There was not a 
single Democratic Member of the House of Representatives from the Ways 
and Means Committee included in the room to write this bill--not one--
despite the fact that the House is controlled by Republicans by only a 
small majority. Yet not one member of the minority party of the House 
of Representatives was brought into the room to sit down when the 
conferees met to resolve their differences on this bill. And out of 
this body, only two conferees from the minority side were included, 
despite the fact that only one Member separates us. Senator Daschle and 
Senator Rockefeller, duly appointed as conferees, were excluded from 
meeting. In fact, Senator Daschle, the Democratic Leader of the Senate, 
was excluded from the conference on this important measure. To say to 
the Democratic leader, the minority leader of the Senate, and to 
Senator Rockefeller, two senior members of the Senate Finance 
Committee: You are not allowed to come into the room to help draft a 
piece of legislation dealing with 41 million Americans, Medicare 
beneficiaries, to frame a prescription drug benefit. I am stunned, Mr. 
President, that a 675-page bill, on as an important a matter as the 
healthcare of nearly 41 million elderly Americans, that not a single 
Democratic Member of the House, and only two members of the Senate 
Finance Committee already supportive of this bill could meet to craft 
the bill before us. I find it breathtaking that the process was so 
flawed in the development of this bill that Members of our own 
respective Chambers were not allowed to come in and work to resolve 
differences on matters as important as this.
  Then, in the House of Representatives on Friday evening and well into 
Saturday morning, when the vote was being cast on the final passage of 
this bill, we witnessed a historic moment as the House held open for 
almost three full hours--the longest recorded vote in the body's 
history--a vote that was supposed to take 15 minutes to pass this bill. 
The Presiding Officer said: There will now be 15 minutes to record your 
votes by electronic device. Having served in the House of 
Representatives when electronic balloting came into place, I heard that 
message over and over again: Members will have 15 minutes in which time 
they can record their ballots by electronic device. And almost 3 hours 
later, that ``15 minutes'' elapsed, as every possible bit of arm 
twisting, every possible maneuver you could make to change the outcome 
of that vote transpired. I believe that this vote constitutes one of 
the worst moments I can think of in the conduct of the House of 
Representatives.
  Then, when several other members of the minority decided they would 
change their votes in light of the arm twisting and in light of the 
final outcome, the gavel came down within a nanosecond, and the 
traditional opportunity given to Members to change their votes before a 
final vote is recorded was denied them.

  I am stunned as I watch a process around here so deteriorated that it 
has come to this. And I say to my friends on the other side: Beware. 
The wheel does turn. The day will come when we will be in the majority. 
And in the House that will happen as well. Changes in leadership have 
occurred throughout our history and they will continue to occur. What 
sort of precedent are we setting if this is how we conduct our 
business?

[[Page S15720]]

  Then, last Thursday, late in the afternoon, those of us who were 
excluded from having Members who represent our views work on this 
conference report, were delivered this 675-page document.
  Suffice it to say, there is not a Member here who has read this in 
its entirety, nor could they possibly understand it even if they tried 
to, since last Thursday. Yet we have just voted on several procedural 
motions here to say that within a matter of hours, we are now going to 
adopt this historic piece of legislation without fully, in my view, 
understanding the implications of what is actually contained in the 
bill.
  Mr. President, a bill of 675 pages, delivered just last Thursday, and 
here it is, Monday at 6 p.m., and we find ourselves only a few hours 
away from deciding the fate of 41 million Medicare beneficiaries and 
coming generations of them as to whether or not they will have the 
incredible safety net the Medicare Program has provided for 38 years.
  These process questions cannot go unnoticed, Mr. President. And while 
we talk about the implications of what we are told is in this bill, I 
am deeply troubled that the shutting out entirely of Democratic Members 
of the House, the denial of the Democratic leader of the Senate, along 
with Senator Rockefeller, the ability to meet and discuss this bill and 
its full implications. Further troubling then to witness a 3 hour vote 
in the House of Representatives in the middle of the night, under the 
guise that we must get this done. As my colleagues know full well, this 
is the end of a session, not the end of a Congress, and to not take a 
few more weeks to analyze what we are doing with this bill, to see if 
there is not some compromise that can be reached, when you consider the 
great implications of this bill, I think is a sad commentary on the 
condition of the Congress. I have been here for a quarter of a century, 
and I do not recall a time like this in my 24 years where we have come 
to this.
  So beware. Beware, America. Beware, America, of what happens when 
this process breaks down, as it has here with this bill.
  Beware, America, when you have a bill of this magnitude and size 
passed in the wee hours of the morning in one Chamber, and rushed 
through the other in a matter of hours of debate and discussion--more a 
litany of speeches than any real debate.
  Beware, when almost one-half of the entire Congress is excluded from 
sitting and working on a product as important as this. There is 
something wrong when that happens, Mr. President.
  I don't care what your politics are; I do not care what your ideology 
is. Beware, Americans, when you find out other voices are denied being 
heard. It is the critical quotient, the critical element of what 
constitutes this democracy: the importance of debate and discussion, 
the tension the debate brings, and the ultimate improved product that 
occurs when that happens in America.
  When other voices are not heard, when other ideas are not brought to 
the table, then we all suffer. That is what has happened in the 
construct, if you will, of this legislative package.
  Let me take a few minutes, if I may, and try to share with my 
colleagues what I believe is included in this bill. I have talked about 
it to some degree already, and I know, in a sense, why we are being 
called on to do this as rapidly as we are. Because based on the time I 
have spent going over this bill, and looking at it, and others who are 
more knowledgeable than I am about health care issues, who have 
dedicated almost their entire careers to examining these issues, I 
would say one of the reasons this is being pushed through as rapidly as 
it is, is there is a lot in this bill that the more you know about it, 
the less you would like it, and the more opposition would grow to its 
passage. The more people are aware of what is included in these 675 
pages, the greater concern they ought to have.
  There are those who have never liked the Medicare program, who fought 
against its very creation 38 years ago, and since then have been 
seeking an opportunity to undo it.
  Congratulations to them. Congratulations to them because I think, in 
effect, they have achieved that result with what I think is going to 
happen in a few hours; that is, the adoption in the Senate of this 
particular package, the approval already in the House and the 
likelihood, of course, that the President is going to sign this into 
law.

  Then I would tell America, as you get to know this bill, you will 
come to have greater and greater concerns about it. Let me explain why 
I think that is the case.
  We have all been talking about--certainly this side of the aisle 
has--the great need for a prescription drug benefit for years. However, 
I have reservations about the prescription drug benefit contained in 
this bill. Under this bill, 2.7 million retirees are going to lose 
their existing drug benefit package--2.7 million of the 41 million 
Medicare beneficiaries. While some might say that doesn't amount to 
much, when combined with the other millions of seniors who are going to 
have their premiums increased, and possibly their benefits reduced if 
this bill is to pass, you begin to realize how troubling this bill is. 
That is literally what is going to happen under this bill. 2.7 million 
retirees are going to lose their present prescription drug coverage.
  Why? Because they presently are covered under plans offered by their 
previous employers. They have retired and yet they carry with them 
those plans. The estimates are that 2.5 million retirees are going to 
lose coverage because their employers are going to drop those plans if 
the benefit under this bill is enacted.
  In my State, just to put it in local terms, this will mean that 
39,000 people in Connecticut who fall into that category will lose 
their present drug coverage. In Connecticut there are approximately 
515,000 people who are of retirement age, and of that number, I am 
going to have 39,000 who are going to be dropped from their 
prescription drug coverage.
  Further troubling, I am then going to have 74,000 Medicare 
beneficiaries in my state of Connecticut, and 6.4 million nationwide, 
who are going to lose as well under this bill. What happens to these 
people? These are seniors with severely limited incomes, making them 
eligible for both Medicare and Medicaid. These senior citizens are 
going to face less access to and higher prices for the drugs they need 
due to this conference agreement requiring drug co-payments and the 
creation of an assets test.
  I have heard Members say that the price increases these low income 
seniors will face are not that significant. Well, it isn't much, if you 
make $158,000 a year as a Senator. A few bucks a month amounts to 
nothing. But if you are a person making $13,000 a year or less, as 
these people do, and you are on Medicaid and Medicare and you are 
working each month trying to pay a mortgage, to put food on the table, 
to pay for the other essential needs you have, then believe me, these 
cost increases are terribly hard to bear. We in this body do not have 
such worries because we have such a great health care program. Members 
of Congress enjoy a fabulous healthcare plan. We offer nothing like 
that to the rest of the American public so we don't quite understand 
what other people go through in many ways.
  Taken together--those losing their present prescription drug coverage 
and those low-income beneficiaries facing increased costs--you have one 
fourth of all Medicare beneficiaries negatively effected by this bill. 
Those are, to begin with, some of the concerns we have with what 
happens to close to 9 million of this nation's nearly 41 million 
retirees.
  Now let me move to address some of the other issues of concern in 
this bill. While others have already talked about the prescription drug 
benefit portion of this bill at length, I want to point out that I am 
worried about certain aspects of this portion of the bill which will 
present real problems for our seniors. Under the proposed prescription 
drug benefit, this bill before us contains a gap in coverage, the so-
called donut hole. The donut hole is nearly $2,800, twice the size of 
the one we adopted when this bill was adopted by the Senate back a 
number of months ago. Under the conference report, Medicare 
beneficiaries with costs within this so-called donut hole will be 
forced to pay for the full cost of their prescribed medicines as well 
as a monthly premium of an estimated $35. This will mean that when your 
prescription drug

[[Page S15721]]

spending falls within this coverage gap that you will receive 
absolutely no assistance purchasing your prescribed medicines under 
this bill. To add insult to injury, you're still on the hook for the 
monthly premiums while receiving no assistance affording your needed 
medicines.

  Also troubling, Mr. President, is the notion of the monthly premium 
of an estimated $35. Under this conference agreement, if you end up 
having only one private plan providing the drug coverage in your area, 
these plans could charge whatever they want, because the lack of a 
another competing plan. The $35 figure often cited is not a cap; it is 
the estimate of what the average may be. There is nothing in this bill 
that prohibits one of those private plans from charging whatever they 
want in that area. You would end up being forced to charge whatever 
these plans determine is their price or not having any drug coverage at 
all.
  Despite all of the problems with the prescription drug benefit 
portion of this package, even with the concerns I have outlined, I 
would have supported this portion of the bill if it stood alone as I 
believe it offers a first--though not nearly complete--first step 
toward adding a prescription drug plan under the Medicare program. I 
think the idea of doing something in this area made some sense. I would 
have, even with these bad features, supported this legislation in the 
hopes that in the coming years we could have modified it and changed 
it.
  But something that few people want to talk about on the other side of 
the package before us are the structural reforms of Medicare contained 
in this bill. The conference report we are considering today is not 
just about prescription drugs. It has a second, much more troubling 
part. It is over this part that most of us who are expressing our 
strong objections to this bill have found concern. It is this part of 
the bill that gives us all pause because it is no less, in our view, 
than an attempt to end Medicare, certainly as we have known it over 
these past 38 years.
  I tell America to watch carefully. This is the part on which you want 
to focus. The more you read about it, the more you will draw the same 
conclusion as those of us who are strenuously fighting adoption of this 
bill. It is an attempt to force seniors into private plans, producing 
billions in profits for HMOs but denying seniors access to the benefits 
to which they have become accustomed and the doctors they trust.
  This bill provides a $12 billion subsidy to the private companies and 
a 9-percent kicker, in effect, to make sure the competition called for 
by this bill is rigged in such a way that they cannot possibly lose in 
that competition. The supporters of the bill will tell you it is not 
forcing seniors out of traditional Medicare. They claim they are 
creating competition and, as a result, offering seniors a choice.
  Let's talk about the so-called competition in this bill and what it 
would create. Private plans under this conference report will be 
reimbursed at a higher rate than traditional Medicare--9 percent higher 
to be exact. How does Medicare compete when you have a 9-percent higher 
reimbursement for the private insurance plans they are supposed to be 
competing against? What kind of a competition is that, when all of a 
sudden you get a 9-percent higher reimbursement rate and claim to have 
a level playing field? Additionally, this bill makes available $12 
billion to be used to lure private plans into the marketplace. If it is 
going to be a competition, let it be a competition--but we are going to 
stick $12 billion into the pockets of the HMOs, give them a 9-percent 
higher reimbursement rate, and say to Medicare: Go out and compete. 
That is like tying both hands behind their back and tying their legs 
together and then saying go run a race. A 9-percent higher 
reimbursement rate and $12 billion to lure private plans into the 
market amounts to the inclusion of a corporate subsidy in this bill of 
major significance.
  Under this plan, private plans can design their benefits to attract 
certain beneficiaries, and that is a critical piece. These private 
plans can design them to attract wealthier, healthier Medicare 
beneficiaries. In the beginning, one of the magnificent features of 
Medicare was that we didn't discriminate based on wealth or illness. We 
said if you reach the age of 65, we are going to provide a safety net 
for you. The idea was that regardless of whether or not you are 
healthy, sicker, wealthy, poor, all are together under Medicare.
  For the first time--and this is a major change--we are going to start 
to discriminate if this report is adopted. So the wealthier and 
healthier people are going to join plans designed by the private 
companies, leaving in the traditional Medicare program only the sickest 
and the poorest beneficiaries. When this happens, the premium costs are 
going to go up and for these seniors, and when they do, they are going 
to face higher costs and reduced benefits. I don't know what other 
conclusion you can draw. You cannot accept the notion that we are 
creating a level playing field. It is not a balanced competition if I 
provide you a 9-percent higher reimbursement rate than Medicare gets 
and I then give you an additional $12 billion to lure you into the 
market. It is just not.
  America, pay attention. If you are, today, in the Medicare Program, 
you could end up watching this program be radically changed. So you end 
up paying higher premiums and watching your benefits be cut and 
watching only the poorest of the poor or the very sick be left in a 
program, as these designer programs created by the private plans will 
find ways of causing the healthier and wealthier to desert traditional 
Medicare. This is not a fair competition. It is a rigged game. This 
bill stacks the deck against traditional Medicare. The effects are 
self-perpetuating.
  Traditional Medicare will grow weaker and private plans will grow 
stronger, forcing more beneficiaries out of the traditional program and 
into the arms of HMOs.
  It is very easy to get bogged down in the complexities of this bill. 
So let me state very simply that the weakening of the traditional 
Medicare caused by this 675-page bill is going to force seniors to pay 
more and face the prospects of fewer benefits.
  Ironically, this bill will mean less choice for seniors. One of the 
things we are being told is there is going to be a lot more choice 
under this agreement. One of the great features of Medicare is that you 
get to choose your doctor. I don't know a single American who doesn't 
like that feature, who doesn't appreciate the opportunity they have to 
choose which physician they want to have treat them. Under this 675-
page bill, that is over with for many seniors. That fact alone ought to 
cause people to pause. Why? Why would you deny people the choice of 
which doctor they use, someone they may have dealt with for years? That 
choice is gone with this bill.

  America, pay attention. It is gone. If this bill gets adopted in the 
next few hours, that is gone. That is not choice at all. Nothing would 
make me happier than to find out these predictions are wrong, but they 
are not. I truly hope seniors can retain the choice that they already 
have and that traditional Medicare survives.
  Let me explain briefly why I get as passionate as I do about these 
issues, Mr. President. When the Medicare+Choice Program was created and 
these private plans first came to our communities, many offering zero 
premiums. People joined in droves, jumped from traditional Medicare at 
the promise of reduced cost and increased benefits. Then, of course, 
once the plans looked around in certain areas and discovered there 
weren't quite as many wealthier, healthier people in certain areas but 
there were poor and sicker people, they decided--and they can do this 
at a moment's notice--they said: We are leaving, packing up and getting 
out. They did that in my State. They packed up and left.
  I remember going to a meeting because the senior Medicare 
beneficiaries I represent were so upset and concerned about these 
decisions to leave. I convened a town meeting in Norwich, CT. About 
350, 400 people showed up, and it was on a Saturday morning. They could 
not believe what happened to them. One individual was so upset about 
his wife losing her Medicare+Choice plan--a man who served in the U.S. 
Navy in World War II and worked at the Electric Boat Division in 
Groton, CT, for many years. As he spoke passionately about what 
happened to his wife, being dropped from this program, in his great 
worry and concern about that, he passed away at this meeting. I will 
never forget it. It was, obviously, a stunning moment for

[[Page S15722]]

the people there. He was so upset about what happened to him because 
his wife's HMO left, and she was left with nothing in terms of the 
promised health care coverage. He was a man by the name of Frederick 
Kral from eastern Connecticut. I have never forgotten that tragic 
incident and the deeply personal stories shared at this town meeting.
  I remember how people felt when these HMOs came running in and then 
walked away. I cannot say that will happen here. I don't know what is 
going to happen. We are just playing such a risky game with all of 
this. Why are we taking these kinds of risks on such an important 
issue? We should realize the tremendous damage we can do to people.
  I recall very well what happened when we had HMOs promise they were 
going to step in and provide choice and do all these wonderful things. 
Remember, these are companies that have to make money and they want, as 
their customer base, healthy people. They would like wealthier people 
because then they don't have to pay out as deep a benefit. When these 
plans discover people are not quite as wealthy and healthy, then they 
design plans that exclude them. My fear is that will happen here.
  Even more ironic is this highly unfair system is being championed by 
the self-proclaimed champions of free enterprise.
  The bill, as I mentioned, will provide $12 billion to help HMOs 
unfairly compete against traditional Medicare, along with a 9 percent 
higher reimbursement rate. It does nothing to control drug prices. If 
we really want to do something to promote competition under this plan, 
wouldn't you think we might have allowed the purchasing power of nearly 
41 million Americans to achieve lower prices for prescribed medicines?
  That is what we allow with veterans hospitals. The veterans hospitals 
collectively get together and negotiate with the drug companies for the 
best price. If you are a veteran in the country, you get a much reduced 
cost of prescription drugs because the VA has negotiated these prices 
on your behalf.
  As my friend from Florida, Senator Bob Graham, so eloquently 
described earlier today--what do you say to two people who walk in--a 
husband, who is a veteran of the Korean war, who is paying one price 
for drugs because as a veteran the VA has negotiated a lower price, and 
his wife who stayed home and raised a family and maybe held down 
another job during that time? She is not a veteran, but she is on the 
same drug as her husband and she pays two, three, four times what he 
pays. How do you explain that to people?
  Why can we not do in this bill what we have done in the VA? This 675-
page bill specifically prohibits the Medicare program to negotiate for 
lower drug prices. How is this representative of free market 
principles?
  On the other hand, we are being told that we ought to have 
competition between private plans and Medicare. When it comes to 
negotiating for lower prices for prescription drugs, this law 
categorically prohibits the Federal Government from doing so. It is OK 
for the VA, and I applaud them for doing that, but it is not OK for 
Medicare. Yet we are told this is supposed to provide a fair 
competition.
  The reason, of course, for all of this is simple: The champions of 
free enterprise know private plans cannot compete with traditional 
Medicare on a level playing field. The subsidies are absolutely 
necessary because Medicare is actually more efficient. Medicare 
delivers services at a lower cost. That isn't one Senator's conclusion. 
Those who have examined this program from top to bottom, in every 
different manner, say Medicare is a very efficient program. And it 
delivers terrific services at a much lower cost than private plans, and 
we are about to walk away from that with the adoption of this bill.
  We are going to go off now and take 41 million Americans and make 
them guinea pigs, despite the fact the system works. There is that old 
expression: If the wheel ain't broke, don't fix it. This wheel is 
working well--the Medicare wheel.
  I am afraid we can only conclude one thing: The architects of this 
bill are going to spend billions and billions of taxpayers' money not 
to reform Medicare, but to dismantle it, to push patients out so that 
it will, indeed, wither on the vine.
  I remember so well when the former Speaker of the House, Newt 
Gingrich, speaking in front of a group of people here in Washington, a 
group of lobbyists from the health care industry, talked about Medicare 
withering on the vine. I heard the other day Mr. Gingrich, no longer a 
Member of Congress, showed up at the House Republican caucus and gave a 
strong pitch for this bill: It is a great bill, according to the man 
who wanted to make Medicare wither on the vine. Either he had a great 
conversion on the road to Damascus, along the lines of St. Paul, or he 
still believes what he did a few years ago, and he is finally going to 
be able to achieve what he talked about doing then.
  I suspect it is more the latter than the former. I have seen no 
evidence that there has been a change of heart by Mr. Gingrich in his 
views about Medicare. So the individual who promised you we are going 
to let this tremendously-successful program wither on the vine is now 
applauding the fact we are going to finally achieve what he suggested a 
few years ago.
  I predict we will be back, unfortunately, at great cost to the 
American taxpayers and at great cost to older Americans. We will be 
back in this Chamber rewriting this bill. That much I will guarantee 
will happen.
  Unfortunately, we will squander billions of dollars unnecessarily. We 
will put a lot of people who shouldn't have to go through this, given 
their age and the problems they face--older Americans shouldn't have to 
go through the added frustrations and anxieties and wonder every day, 
as millions of them do, about how they are going to pay for the 
healthcare needs they have. They are going to have to go through this 
wringer because there are people around here who just never could stand 
Medicare and have been looking for ways to undo it since its inception.

  This part of this bill, these structural changes to Medicare, if they 
were to offered before this Chamber as a sole proposition, I don't 
think would get 15 or 20 votes, but because they have been linked 
inexorably to the prescription drug benefit, the bill will pass.
  As I mentioned at the outset of these remarks, the prescription drug 
benefit, while it is flawed, in my view, is worthy of support, despite 
the objections I have to certain parts of it. But it is not so good, in 
my view, that it ought to override the great damage to the Medicare 
program that will be caused by this bill.
  Allow me to express my concerns about another provision. The 
conference agreement before us today establishes the dangerous 
precedent of instituting so-called cost containment measures that could 
directly lead to service cuts in what Medicare covers and just-as-
severe increases in costs to Medicare beneficiaries.
  Specifically, the conference report calls on the Congress and the 
administration to address Medicare's costs when general revenue 
spending on Medicare reaches 45 percent of the program's total cost. 
Let me read that again. Specifically, this conference report, calls on 
Congress and the administration to address Medicare's costs when 
general revenue spending on Medicare reaches 45 percent of the 
program's total cost.
  Does anyone in this Chamber know of any other Federal program that 
has a similar provision in it, when we pay for anything else you can 
think of, when 45 percent of the cost comes out of general revenues, 
that we must take enact cost containment measures? Only Medicare; there 
is no other Federal program that has similar handcuffs on it that 
Medicare does under this bill: It states that when you reach 45 percent 
coming out of general revenues, then cost containment measures must be 
taken.
  The adoption of this purely arbitrary cap will lead to almost certain 
erosion of this critical program's scope of coverage and affordability. 
It is yet another attempt of opponents of Medicare to destroy this 
program that so many of our senior citizens rely on every day.
  Today, after nearly 40 years of Medicare's inception, we find 
ourselves truly at a crossroads. The opportunity is before us to move 
Medicare toward the future without threatening its proven availability, 
to provide for the health and well-being of this Nation's

[[Page S15723]]

seniors citizens. Sadly, the conference agreement represents an 
opportunity lost, an opportunity not only to add comprehensive coverage 
for prescribed medicines under the Medicare Program, but also an 
opportunity to strengthen the Medicare Program for future generations.
  So it is with a great deal of sadness that I find myself faced with 
this 675-page document. The entire House minority was not allowed in 
the room on this bill. There were secret meetings of the conference 
committee that crafted this agreement--I am not making this up--
clandestine meetings so no one could find out where they were meeting. 
Not a single representative of the minority in the House was allowed to 
sit in and help craft this bill affecting 41 million Americans--and all 
but only two members of the minority on this side were excluded as well 
from these deliberations. The Democratic leader, a member of the 
Finance Committee, was told he had no right to go to the meetings. In 
fact, the chairman of the committee said: If the Democratic leader 
shows up, then the meeting will be canceled.
  What kind of arrogance is that? The chosen leader of a minority of 
this body was told if he shows up as a member of the conference 
committee, the House chairman of this conference would close down the 
meeting and walk out.
  This process is broken, Mr President. How much confidence can America 
have in a product that in the construct of these 675 pages, minority 
views were almost totally excluded.
  I warn my colleagues, a dangerous precedent is set when a bill of 
this significance is crafted in the manner of the bill before us. This 
bill before us affects not just those who are direct recipients of 
Medicare. Think what Medicare has meant to the children and 
grandchildren of its beneficiaries. Think what costs would have had to 
have been borne by children trying to raise their own children while 
they were taking care of their parents had it not been for Medicare.
  How many college educations would not have been achieved if the 
families were forced to choose between making sure that mom and dad 
could see a doctor or their children might go on to college? That is 
not hypothetical at all. Think how many people's dreams of home 
ownership, making investments in things families need, were made 
possible because there was a program called Medicare. It said to 
Americans: You have given so much, particularly the generation that Tom 
Brokaw has called the greatest in our history, that carried us through 
a Depression, through World War II and Korea, that after all of that, 
we said to them, look, we are going to create a program that makes it 
possible for you and your families not to have to face poverty or worse 
when you face expenses for needed medical attention.
  Despite the fact the program works well, has been efficient, and 
produces services at low cost, we are about to enter a casino, under 
the best of circumstances, and start playing roulette with people's 
health care and with the costs associated with it. That is why I am so 
saddened by the emergence of this conference report.
  The process has broken down. This is a product in which one can have 
little or no confidence. I am being asked as one Member, with only 3 or 
4 days to review this product, to agree to sign on to something of this 
magnitude. There is an opportunity, I think, to get this right and to 
make this better. We owe it to the people of this country to seize this 
opportunty.
  Older Americans are not Democrats or Republicans. They are not 
conservatives or liberals. They are just hard-working people. The least 
they deserve is to have a Medicare Program they do not have to worry 
about. They need a comprehensive prescription drug benefit so they do 
not have to make choices between the medicines they need and the food 
they must have or the heat they must purchase to warm their homes.
  We should be able to find a way to achieve that. I am deeply saddened 
that we have not achieved that goal with this conference report. After 
all of the reasons I have laid out, I will vote against this bill and I 
urge my colleagues to do likewise.
  I deeply regret we did not prevail on opposing cloture or on the 
point of order that was raised so that we might have been able to go 
back and work on this again and come back in January with a better 
product. This is not the end of this Congress, it is only the end of a 
session. Yet every effort is being made to see to it that we jam this 
flawed bill down the throat of America.
  We will be back; unfortunately, at great cost to the Treasury, and at 
great cost to the well-being of an awful lot of people who deserve 
better than they are going to get through the adoption of this bill, in 
order to fix this bill. I truly wish this were not the case.
  I reserve the remainder of my time and designate the Democratic 
leader as the beneficiary of any time I may have remaining.
  The PRESIDING OFFICER. The Senator has that right.
  Mr. DODD. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HARKIN. Madam President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Fitzgerald). Without objection, it is so 
ordered.
  Mr. HARKIN. Mr. President, today by a 2-vote margin, I guess it was, 
the Senate, this greatest deliberative body in the world, decided to 
begin the process of ending Medicare in America. After nearly 40 years 
in which the elderly in our country have been raised out of poverty, in 
which the elderly in our country have been given the assurances that 
they will not have to go to the poor farm to pay for medical care, 
after nearly 40 years of children being freed from the burden of caring 
for ailing parents and grandparents, after providing an envy of the 
world in what we do to care for our elderly in terms of health care, 
the Senate today began the process of turning our back on all the 
progress we have made. Medicare was created, as I said, almost 40 years 
ago, with the purpose of providing our Nation's aged and disabled with 
that safety net, to protect them from death and destitution.
  For years, seniors have counted on health security in their golden 
years thanks to Medicare. For nearly 40 years, this program has stood 
as a social contract between the American Government and the American 
people. After a lifetime of labor, when a person turns 65 they are 
promised health insurance covering doctors' visits, hospitals, and many 
other health costs. There was one exception for all of those 40 years; 
that is, there was no coverage for prescription drugs. It is almost 
impossible to overstate what Medicare means to a family, a citizen of 
modest means who has worked hard for a lifetime, a person who does not 
want to be a burden on the rest of his or her family. Medicare has been 
a rock solid, reliable, guaranteed lifeline for America's senior 
citizens.

  Today, with a two-vote margin, we are watching that social contract 
erode. We are taking huge risks with the health and security of 
seniors, all to satisfy ideological agendas, to satisfy big political 
donor's wishes and certain political strategies.
  With this Medicare bill, we have seen grave abuses of power--such as 
the recent vote in the House of Representatives in which this bill 
before us today lost in the House of Representatives, lost under the 
normal rules, lost under the democratic means over there. But as you 
know, they kept the vote open for almost 3 hours, from about 3 a.m. to 
6 a.m., to twist arms until they finally got the votes.
  I was driving to work Saturday morning. I was listening to public 
radio. A caller had called in and she said President Bush says he wants 
to bring democracy to Iraq. After what happened last night in the House 
of Representatives, I hope Iraq wasn't watching. That is not the kind 
of democracy they need in Iraq.
  I am disappointed in the process that we have had here. This has been 
a sham process.
  We have this bill here; I have held it up many times. I can barely 
hold it up right now--1,200 pages. It is dated November 20. It was 
delivered on our desks when we arrived here Saturday morning, that big. 
Saturday morning and here it is, Monday, and we are expected to vote on 
it.
  How many seniors in this country have seen this bill? How many here 
in

[[Page S15724]]

this room have actually gone through it or looked at it--or staffs? We 
know basically what is in it, but who knows what fine print is included 
and how some things may work? It is a terrible process.
  That is why I argued against it repeatedly and that is why I voted 
against cloture today on the filibuster. It is not that I want to keep 
filibustering, but I believe we should have gone home and let this bill 
get out to the public, let the American people see it, talk about it, 
digest it. Then we can come back here in late January, as we are going 
to do, and February, and see what our constituents think about it. To 
me that seems to be the American way, the democratic process.
  That is not the process we followed here. That is not the process. We 
are debating a proposal that was originally supposed to accomplish one 
simple goal: to right the wrong in Medicare, that gap that was in 
there, by providing coverage for prescription drugs and to make 
medicine more affordable for seniors.
  I regret that in writing this bill Congress has strayed from that 
objective. We have forgotten who we are supposed to be helping--our 
Nation's seniors. Instead of a straightforward drug benefit, we now 
have a Medicare privatization proposal that threatens to undo the 
entire Medicare Program on which seniors and the disabled rely each and 
every day. Seniors who rely on the stability and affordability of this 
program, seniors like many in my home State of Iowa, simply want and 
need affordable medicine.
  I have seen no big clamour to change the basic Medicare Program. We 
had a proposal here in the 1990s to get more competition in Medicare. 
The Congress came up with this Medicare+Choice Program, where seniors 
could stay in traditional Medicare or they could join an HMO. So we 
have had several years of experience with this.

  What is the result? Eighty-nine percent of the seniors in this 
country have chosen to stay with Medicare. About 11 percent in various 
parts of the country went with HMOs. That is fine. That was purely 
voluntary. But seniors have spoken. They want to keep traditional 
Medicare. They simply need an affordable drug benefit.
  I want to say more about this as I talk, but under this bill seniors 
do not really have a choice. You hear my friends on the Republican side 
say time and time again, choice, choice, choice, we are giving seniors 
choice, choice, choice. That simply is not true.
  I hear all the time they say if a senior wants to stay with Medicare, 
they can stay with Medicare. That is true. But at what expense? What 
they don't tell you is, if a senior wants to stay with Medicare, they 
don't get drug coverage. They get no prescription drug coverage. Yes, 
you can stay with Medicare but you have to give up prescription drug 
coverage. If you want prescription drug coverage, you have to go to 
some private plan. That is what they are not telling. I will have more 
to say about that choice.
  This bill totally violates the spirit and substance of the original 
Medicare Program. Again, to make it worse, we are rushing it through 
the Senate. This bill doesn't start until 2006. What is the rush? Why 
are we here 3 days before Thanksgiving, 7 o'clock in the evening, 
having a vote on a filibuster today, trying to ram this bill through? 
Why is it that the House of Representatives, in an all-night session, 
rammed this bill through? I will tell you why they rammed it through. 
Because the pharmaceutical companies and the big insurance companies 
want to get it through before Americans broadly know what is in it. 
That is why. Get it through in a hurry.
  Only a few fortunate people know what is in this: a roomful of 
Republicans, two Democrats, and big money industries. Seniors didn't 
have a seat at the table. If they would have, I am sure they would have 
created a very different bill.
  I have this cartoon here. I will show it again. Here is a pharmacy. 
There is a pharmacist who represents Congress. This elderly woman has 
come in, has given her drug benefit to Congress, and Congress is 
saying: Have a seat. It will be ready in 2\1/2\ years--your 
prescription; 2\1/2\ years. Yet we have to rush this through right now.
  As I said, I called this the big Medicare gamble. It is like a 
roulette wheel. That is what we are doing. Before, under Medicare, it 
wasn't a gamble. You knew what you had. You had good, rock solid 
coverage, no matter what part of the country you lived in, whether you 
lived in rural Iowa or New York City; it didn't make any difference. 
Now we are rolling the dice, spinning the roulette wheel. It is going 
to unravel Medicare. The special interests, the drug companies, the 
HMOs are now more important than seniors.
  Seniors are being told there is not enough money for a really good 
drug benefit. Why isn't there enough money? It is because we already 
squandered our surplus in tax cuts worth trillions for the wealthy. 
Once again, the well-heeled on Wall Street are more important to this 
administration than the elderly and disabled on Main Street.
  Mr. ENSIGN. Will the Senator yield for a unanimous consent request? I 
ask unanimous consent that I be recognized following the Senator from 
Iowa.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HARKIN. What we have before us today is a bill drafted behind 
closed doors in the dark of night that amounts to a bonanza for special 
interests. Don't take my word for it. Look at what others are saying 
regarding this bill.
  This is from the Des Moines Register editorial board, my home paper:

       This legislation is a big, sloppy kiss to the 
     pharmaceutical and insurance industries.

  The Albany Times Union:

       This is not only an imperfect bill, it may also be a 
     disastrous one.

  This is the New York Times of the 19th:

       This is a gift to pharmaceutical companies and insurers and 
     a threat to elderly Americans.
       Deal would alter Medicare's core. If a compromise bill on 
     prescription drugs passes, the Government program will become 
     a massive subsidized insurance market.

  That is the LA Times. They have it right. It is not just the media 
and some of us on this side. From the American Conservative Union, 
listen to what they say:

       The Medicare prescription drug benefit bill that passed the 
     House and the Senate would drive up costs for millions of 
     senior citizens. Millions more will lose their current 
     coverage under private Medigap insurance and employer 
     provided plans. The House-Senate conference committee should 
     reject the bill and start over with a bill that includes real 
     Medicare reform.

  This bill would provide billions of dollars in subsidies--bribes--to 
private plans and HMOs. In fact, this morning's Washington Post had an 
article which said the Medicare bill would enrich companies $125 
million more for employers and health firms. It would ensure billions 
of dollars in profits and projected $139 billion to pharmaceuticals. I 
think it speaks volumes that when this bill came out last week, the 
drug and health industry stocks surged on Wall Street.
  I ask unanimous consent that the article from today's Washington Post 
be printed in the Record.
   There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Nov. 24, 2003]

                  Medicare Bill Would Enrich Companies

                           (By Amy Goldstein)

        The Medicare legislation that passed the House near dawn 
     on Saturday and is moving toward a final vote in the Senate 
     would steer at least $125 billion over the next decade in 
     extra assistance to the health care industry and U.S. 
     businesses, in addition to its widely heralded goal of 
     helping older Americans pay for prescription drugs.
        The largest chunk of that assistance, according to 
     congressional budget estimates, would be $86 billion worth of 
     payments and tax benefits for employers, giving them a new 
     subsidy for the health benefits that many already provide to 
     retirees. Health maintenance organizations, hospitals and 
     physicians also would be paid more by the government for 
     treating the 40 million elderly and disabled people in 
     Medicare, the estimates show.
        Whether this extra money, part of a $400 billion plan to 
     redesign the program, is warranted remains a matter of 
     intense debate. Regardless of whether the payments are 
     needed, the bill's generosity to employers and major sectors 
     of the medical industry helps explain the aggressive lobbying 
     campaigns for the legislation by groups including the U.S. 
     Chamber of Commerce and the American Medical Association.
        Liberal and conservative health policy analysts say the 
     payments undercut a significant goal of the White House and 
     congressional Republicans in redesigning the Medicare system: 
     preventing it from running out of money in the near future.

[[Page S15725]]

       One of the bill's main architects, Ways and Means Committee 
     Chairman Bill Thomas (R-Calif.), has repeatedly said that 
     expensive new drug benefits must be balanced against other 
     steps that will rein in the program's spending. The most 
     recent federal estimates predict that Medicare will become 
     insolvent in 2026 because Americans are living longer and the 
     large baby-boom generation will start to retire in a few 
     years.
       Yet, as House and Senate members have worked out an 
     agreement on the Medicare bill, ``nobody is serious about the 
     solvency goal,'' said Stuart Butler, vice president of 
     domestic and economic policy studies at the conservative 
     Heritage Foundation, which opposes the legislation. ``That 
     isn't even on the radar screen of more than a handful of 
     members.''
       The extra money to private health care companies is part of 
     the reason many Democrats oppose the measure. Sen. Edward M. 
     Kennedy (D-Mass.), his party's leading voice in the Senate on 
     health care and a vehement critic of the bill, said last week 
     that provisions calling for increased payments to HMOs and 
     other health plans were ``obscene.''
       Kennedy and other critics say that, for the first time in 
     the many years that Medicare has encouraged private health 
     plans to welcome older patients, the government would be 
     abandoning its original rationale that managed care is more 
     economical. Instead, the bill would create new funding rules 
     to ensure that no private plan is paid less than the rates 
     that Medicare pays for patients in the traditional, fee-for-
     service part of the program. It also would establish a 
     special $12 billion fund to try to persuade health plans to 
     enter--or stay in--parts of the country where they have been 
     scarce.
       Lobbyists for health plans counter that they cannot afford 
     to take Medicare patients unless they are paid enough to make 
     it worthwhile. But health economist Marilyn Moon said: ``It 
     is very ironic. . . . To increase participation in private 
     plans, we are going to overpay them for the foreseeable 
     future.''
       The extra payments in the bill have varying purposes. One 
     is to send more Medicare money to doctors, hospitals and 
     other care providers in rural areas, through a combination of 
     funding methods that total about $25 billion over 10 years. 
     Rural health care advocates--and the lawmakers who represent 
     them--made that money a top priority.
       The thinking behind the new employer subsidies is connected 
     to the new drug benefits. Once federal benefits became 
     available, corporate executives told lawmakers and Bush 
     administration officials, companies might accelerate a recent 
     trend in which some have been dropping--or charging more 
     for--health coverage for retired workers.
       As a result, the House and Senate members who negotiated 
     for four months over separate Medicare bills, that the two 
     chambers had passed included incentives to deter companies 
     from abandoning their retirees. The bill would give companies 
     essentially the same amount of money per retiree that the 
     government would provide in subsidies to individual 
     Medicare patients who got the new federal coverage for 
     prescription drugs. The employers would get $70 billion in 
     direct payments and $16 billion more in new tax breaks 
     over the next 10 years.
       Thomas A. Scully, administrator of the federal agency that 
     runs Medicare, said employers ``should be having a giant 
     ticker-tape parade.'' Scully recalled that he and Health and 
     Human Services Secretary Tommy G. Thompson met in the spring 
     with labor and corporate leaders--including the chairmen of 
     General Motors Corp., General Electric Co. and a major steel 
     manufacturer. ``Their joint plea was, retiree health costs 
     are an unbelievable burden.'' They requested what Scully 
     called ``a modest buyout,'' equivalent to perhaps $350 per 
     retiree. The bill, he said, provides more than twice that 
     amount, a sum ``way beyond their wildest requests.''
       Employers repaid with their support. Nine days ago, less 
     than an hour after House and Senate leaders announced their 
     compromise on the legislation, the Business Roundtable, an 
     organization of chief executives of large corporations, 
     issued a statement praising the agreement.
       Similarly, the American Medical Association has mounted a 
     grass-roots campaign in which about 10,000 doctors and their 
     patients have contacted their congressional representatives 
     in recent weeks, urging them to vote for the measure. The 
     bill would cancel a planned decrease in Medicare's payments 
     to physicians for the next two years, providing them a small 
     increase instead. That would give doctors an extra $2.5 
     billion over the next five years, although the money would be 
     decreased after that.
       Together with special physician subsidies in rural 
     communities, the bill would give physicians $1.9 billion more 
     in Medicare payments during the next decade than they would 
     get otherwise, the budget analyses show.
       Donald J. Palmisano, a New Orleans surgeon who is the 
     medical association's president, said the payments were 
     important ``to make sure physicians can stay in the practice 
     of medicine.''
       ``It will be of no value to have medical coverage or a 
     prescription drug benefit, if you can't fine a physician,'' 
     he said.
       Hospitals would get nearly $24 billion extra over the next 
     decade, about two-thirds of it in rural areas. The rest would 
     be used to help defray the cost of new technologies and 
     training doctors and to give all hospitals a bigger boost for 
     inflation next year than the House originally wanted.
       ``I really take issue with anyone who would question the 
     need of those hospitals that are critical to Medicare 
     beneficiaries,'' said Charles N. Kahn III, president of the 
     Federation of American Hospitals. But health policy analyst 
     Gail Wilensky, a Republican who used to run Medicare, said 
     hospitals rarely have received as much money to cope with 
     rising costs as they would get from the bill.

  Mr. HARKIN. Mr. President, the legislation before us seeks to 
privatize Medicare, plain and simple. It seeks to privatize it, despite 
the fact that 89 percent of seniors say they want to stay in 
traditional Medicare--and they have done so when they had a choice--
despite the fact that traditional Medicare is less expensive to 
administer--2 to 3 percent compared to 15 percent in private plans.
  Again, there is something the average person doesn't understand. They 
don't realize. You would think a Government plan such as Medicare would 
cost more than a private plan. Private plans are supposed to be cheaper 
because of competition. We have had Medicare for almost 40 years. We 
have had private plans that length of time. So we have a lot of data. 
We know. This is not conjecture. We have the data. We know. What does 
the data say? Administrative costs for Medicare, 2 to 3 percent. In 
other words, out of every dollar that goes to a beneficiary, it takes 2 
to 3 cents to administer Medicare. For a private health care plan, for 
every dollar that goes out, 15 cents goes for administration.
  You might ask, Why is that? Just think about it this way. With 
traditional Medicare, we don't have to spend hundreds of millions of 
dollars on corporate CEO salaries. We don't have to spend hundreds of 
millions of dollars at least for fancy full-page ads in the New York 
Times and USA Today and Newsweek magazine. We don't have to spend all 
of that money to advertising agencies. That is where you get chewed up 
with these private plans.
  Despite the fact that Medicare expenditures are growing at a slower 
rate than private plans, they say government costs are going up. The 
fact is--again, we have data for 40 years--Medicare has increased by 
9.6 percent compared to private plans at 11.1 percent. Despite that, 
this Senate, this Congress, and this administration want to move us 
into private plans. Despite the clear wishes of senior citizens in this 
country, they want to move us into private plans.
  I guess for those who came up with Medicare+Choice, somehow their 
ideology said these seniors would move into HMOs, and 89 percent said 
no. By gosh, I guess the thinking is here, if they didn't want to 
voluntarily move into HMOs, we will force them into HMOs. That is what 
this bill does.
  The conferees chose to ignore all of the facts and all of data we 
have from the past. Instead, they concocted a grand experiment that 
encompasses all their right-wing ideological fantasies and seniors are 
the guinea pigs.
  What we have in this bill that no one here has read is nothing less 
than a witch's brew of seemingly appealing benefits. But it is a 
witch's brew, one that is going to come back to haunt us in the future.
  This experiment is a result of what I call private sector worship. It 
is a faith-based notion among some of our colleagues that the private 
sector will take care of everything. It is a blind faith that free 
markets solve every problem. But this private sector worship flies in 
the face of past experience. The entire reason we have Medicare today 
is that there is no private sector market for health insurance for sick 
seniors--none. Why? Because there is no money to be made in insuring 
sick, older people.
  The free market works fine when you are talking about automobiles, 
airplanes, TVs, widgets, clothes, and that type of thing. But the free 
market is not stupid. The free market cares about profits--not people. 
By its very nature, the free market shuts out people with disabilities, 
shuts out people with mental illnesses, and shuts out people who are in 
the last years of their lives. In short, the free market shuts out 
people who are not profitable.

  I have news for my colleagues who believe the free market is the 
answer to everything. The free market did not

[[Page S15726]]

break down barriers to people with disabilities in our country. It was 
the Government--we here in the Congress--that had to step in to ensure 
opportunity and openness in our country for people with disabilities. 
In the survival of the fittest free market, these folks were left 
behind.
  Another example: We have been fighting this Congress for years to 
pass a bill ensuring mental health parity. But people with mental 
illnesses are not a profitable group. So the free market, left to its 
own devices, will have nothing to do with mental health parity.
  Think about it. We don't have mental health parity. Why wouldn't we? 
Why wouldn't the free market jump in there and get it? Because there is 
no profit. That is why, as soon as we get back into session next year, 
I hope we pass the Paul Wellstone mental health parity bill. Again, if 
we leave it up to the free market, people with mental illness are 
simply left behind.
  Another prime example of those left behind is the elderly. The 
elderly are not a profitable group of people to include in an insurance 
risk pool. They are sick. They have chronic illnesses. They are 
expensive to treat. The proof is all around us. It is impossible to 
imagine private insurers fighting and competing with one another for 
the privilege of covering the elderly. That is why we have to bribe the 
companies with billions of dollars of taxpayer money to get them to 
participate in this witch's brew scheme we have come up with here.
  I have seen this proof firsthand. The other day, I talked about my 
own situation. I want to repeat it again.
  In 1958, I was a senior in high school. My father was 74 years old. 
My mother had passed away 8 years prior to that. My father had worked 
most of his life in the coal mines in Iowa. My father had an eighth 
grade education. My mother was by then deceased. She was an immigrant 
with no formal education--little formal education. We lived at that 
time in a little house in a rural town of Cummings, IA, of 150 people. 
Because of my father's years in the mines--we called it miner's lung at 
that time; they call it black lung today--he would get sick every year. 
We would never see doctors. We didn't have any money. My father's total 
income was less than $1,500 a year. It was about $1,200 a year. That 
included bonuses for having kids under the age of 18.

  Thank goodness he worked a while during World War II to pay into 
Social Security and he had some Social Security. That is all he had. My 
father had no stocks, no bonds, no property, no trusts, nothing. He had 
the small house we lived in and he had a Model A Ford, the only car he 
ever owned. That was 1958. And every year during those 1950s, I 
remember, like clockwork, my father would get sick. He would get 
sicker; he would get pneumonia. We would rush him to the hospital in 
Des Moines. They would put him in an oxygen tent, give him antibiotics, 
fix him up, and send him back home again.
  If we did not have any money, and our total family income was less 
than $1,200 a year, how did we afford that? I tell you how: It is 
called charity. The Sisters of Mercy at Mercy Hospital would take care 
of my father, and knowing that we were poor and could not afford it, 
they would not bill us. That was charity.
  I was in the Navy some years later, in 1966. I came home on leave, I 
think for Christmas, and my father was quite beside himself because he 
showed me this new card he had, a Medicare card. Now he could go see a 
doctor. If he had to go to the hospital, he did not have to rely on 
charity any longer.
  I often think of how much better my father's later years would have 
been had he had Medicare. If he had seen a doctor and had preventive 
health care, his later years would have been much healthier and much 
better. But he only had Medicare for 2 years before he passed away.
  I tell that story because I wonder, as I stand here and as I listen 
to all this debate about choice, as I listen to the debate about how 
insurance companies out there will come in and do all this, I wonder, 
why didn't insurance companies rush to help my father? Why weren't they 
knocking on his door, competing with one another, to cover my father? 
We had insurance companies at that time. Why weren't they knocking his 
door down to cover him? Why? Because my father was not profitable. 
Elderly people in health care are not profitable.
  So do not tell me the private sector will solve every problem, 
because I lived through its failures firsthand. I know many Iowans and 
many Americans have the same situation. They do not want to be left to 
the volatility and the whims of private HMOs.
  I understand many of my colleagues prefer the free market over 
Government intervention. I do, too, in most cases. But to say that we 
are going to do it regardless is a misplaced faith. There is a time and 
a place for the Government to step in, where the private sector fears 
to tread or fails to tread. No question, this is the case when it comes 
to helping people with disabilities, people with mental illnesses, and 
seniors with serious health problems.
  We hear the claim that private sector competition will drive down 
costs and save Medicare. Nonsense. The only competition will be 
competition for healthy seniors. If you are sick, you will be shunned.
  I saw this headline in the Washington Post: ``Medicare Deal Likely to 
Spark More Health Care Competition.'' I thought, my goodness, and I got 
to reading it.

       On Wall Street last week, drug stocks jumped as investors 
     anticipated a congressional deal finally announced in 
     principle last night that would add a prescription drug 
     benefit to the Medicare Program.
       Pfizer was up on Friday. So was Eli Lily. And so was 
     Johnson and Johnson.

  But this is what it is all about, as Robert Hayes, president of the 
Medicare Rights Center, states:

       This could be like the wild West out there.
       If suddenly there are five or six or seven plans out there, 
     the insurance companies will be pricing their product to make 
     a profit, as they are obligated to do. If the consumer is 
     kind of shooting in the dark because of the complexity of 
     this--and the darkness is deepened by age or disability--
     you'll have a customer primed for exploitation. We're real 
     concerned that people could get ripped off.

  It is not competition for the elderly out there. It is competition 
among the drug companies as to who will make the most money. That is 
the only competition that will be out there. They do not want an even 
playing field competition. This bill will give billions to private 
plans so they can compete and make profits.
  This is what people have to understand. They should know this before 
we vote on this bill. That is why we should get it out there and come 
back in February and vote on it and let the people see what is in 
there. This bill before the Senate will pay a private insurance company 
26 percent more than traditional Medicare; $1,900 more per senior.
  Get this straight: We are going to take your hard-earned tax dollars 
and we are going to give those tax dollars to a private insurance plan 
to compete with Medicare, and in order to be able to compete, we are 
going to give them 26 percent more than what we provide in Medicare.
  I guess I would kind of like that competition. Man, I would like to 
get a piece of that action. I would like to have the Government give me 
26 percent more than what Medicare is making. That is not competition; 
it is a corporate giveaway. It is corporate welfare. That is what it 
is. It is a waste of taxpayers dollars when Medicare, over 40 years, 
shows it can do the job cheaper, more effectively, and more 
efficiently.
  Seniors know it, trust it, and want to keep traditional Medicare. We 
are saying: No; we are taking your tax dollars and we are going to give 
it to private companies, 26 percent more, $1,900 more per beneficiary 
to bribe them to get into a private plan.
  On top of that, the conferees have come up with what they call a 
stabilization fund. How about that for a nice fancy word--
``stabilization'' fund? What are we stabilizing? It sounds as if there 
is an earthquake out there. There may be when seniors find out what is 
in the bill. It is a $12 billion slush fund for private plans. 
Privatization, when it comes to medical care for the elderly, costs 
more money and it will reduce choice.
  We have heard the claim time and time again that seniors should have 
a choice as Members of Congress do. Seniors will be gravely 
disappointed when they find out what they are getting is nothing like 
what we have. I hear

[[Page S15727]]

about choice all the time. No senior will be forced out of Medicare. 
How many times have we heard that? They will be able to stay with 
Medicare.
  Listen to the words carefully because what we are not hearing is that 
if you want drug coverage, you have to get out of Medicare. If you do 
not care about not having drug coverage, you can stay in Medicare. That 
is what they are saying. They are saying no one will be forced out of 
Medicare. No. But if you want drug coverage, you are out of Medicare; 
you have to go to a private plan.
  Isn't that what we are all about, trying to get drug coverage for 
seniors? And seniors say they want it under Medicare; they do not want 
it under private plans. Seniors will actually end up with reduced 
choices under this legislation.

  If there are two private plans, say, an HMO and a PDP--maybe you have 
never heard of a PDP. If you say you have never heard of it, I 
understand that because they do not exist. But it has been conjured up 
in this bill. We have conjured up something called PDPs. So if there 
are two private plans, an HMO, and a PDP, and if a senior who is in 
Medicare wants drug coverage, that senior is forced to take the PDP or 
the HMO. You cannot stay in Medicare. You have to move over and take 
one of the private plans.
  That is a choice? That is a choice? That is like you have a choice 
between getting shot and getting hung. Either way, you are dead. Not a 
very good choice. They will not be allowed to get their drugs through 
traditional Medicare.
  Again, let's say they go and join one of these private plans, this 
PDP, or whatever it is, or an HMO. Well, then the HMO can tell them: 
You can't see your doctor. You have to see another doctor. Oh, you 
can't take that drug. It is not on our formulary. You have to take this 
other drug.
  Why do you have to take this other drug? Well, they will not tell you 
why, but they are probably getting a bigger kickback from the 
pharmaceutical companies for that certain drug. So seniors are forced 
to change drugs. That is not choice.
  It seems to me around here sometimes it is almost to the point that 
if you hear someone say it is daytime, you might just think it is 
probably night. If someone says something is black, you probably think 
it is white. Around here we have gotten to the point where we use these 
words to confuse people, to make people think something is not what it 
is.
  This idea of choice, that somehow we are giving seniors more choice--
just false. The rhetoric around this bill does not match reality. The 
President and this administration has said many times that seniors 
deserve choice, that the seniors deserve what Members of Congress have. 
I am all for that. But that is not what they are getting.
  Right now, I pay about 25 percent of my drug costs. That is it, flat. 
But the prescription drug plan put before seniors in this bill will not 
even come close to that.
  Instead, it is a confusing, convoluted maze that--mark my words--will 
leave the seniors feeling betrayed and bewildered. All I can say to 
some of my colleagues who may have been here in the 1980s is, do you 
remember when we passed the catastrophic health insurance plan? Well, 
if you like the seniors' reaction to that plan in the 1980s, you are 
going to love their reaction to this grossly inadequate prescription 
drug plan.
  Now, look at what they are going to be faced with right here. Every 
year we, in our plan, the FEHBP, the Federal Employees Health Benefits 
Plan, have an open season, and we get to choose what plan we want to go 
in. So we get all these books. Here is one from Aetna. Here is another 
one from a different Aetna. Here is one from, of course, Blue Cross, 
and then a different Blue Cross. Here is Kaiser. Here is APWU. Here is 
PBP. Here is Mail Handlers. Here is NALC. Here is GEHA. Here is MB, 
Individual Practices Association.
  We are supposed to read this and go through them all and decide which 
plan we want to be in. I wonder how many Senators actually go through 
these. I can count them on less than one hand. I can count them on less 
than one finger. Yet seniors every year are going to get this. They are 
going to be asked: Make a choice. It is confusing. It is going to be 
bewildering to them every year--every single year.

  That is what I mean, a senior could get out of Medicare and go into 
an HMO or one of these PDPs. They could jack up their prices--I will 
say more about that in a minute--because the premium is not set in law. 
It can go up. It can go up. They can get bounced around. So they may be 
in one plan 1 year, and that plan may not exist the next year.
  Then what do they do? What do they choose? Well, that is why I say, 
you wait. This is going to be a confusing, bewildering mess for our 
senior citizens.
  The only ones making the money are pharmaceutical companies. I think 
it is instructive that in this bill--if I can find it here, I think on 
page 53 of this bill, if I am not mistaken. I wonder how many people 
read this. Page 53, line 18: ``Noninterference--In order to promote 
competition''--I love this, I love the way they play with words--``In 
order to promote competition under this part and in carrying out this 
part, the Secretary''--the Secretary of Health and Human Services--
``(1) may not interfere with the negotiations between drug 
manufacturers and pharmacies and PDP sponsors; and (2) may not require 
a particular formulary or institute a price structure for the 
reimbursement of covered part D drugs.''
  Now, what do you suppose that is all about? Well, what it says is 
that Medicare cannot negotiate with drug companies to get a better 
price on drugs for our seniors. That is what was written in the bill. 
We have said for a long time that we ought to use the power of Medicare 
to negotiate with the drug companies to get a better price. The VA, the 
Veterans' Administration, going back to a law that we passed here, I 
think, in the 1980s, the VA sits down and negotiates with drug 
companies for the price of drugs for veterans hospitals and veterans 
throughout the country. That is why veterans' drug prices are 50 
percent or more less than what you might normally pay or what an 
elderly person would pay because they use the purchasing power of the 
VA to bring it down.
  But in this bill, we have said, no, you cannot do it any further than 
that. Medicare cannot negotiate. Think about it. It is written in here. 
Medicare is prohibited from negotiating with drug companies to get a 
better price on drugs.
  People always ask: Why are drugs so much cheaper in Canada? I have 
been to Canada a lot. I am sure the occupant of the Chair has been to 
Canada. If you go to Edmonton, Calgary, places like that, there are 
drugstores all over, private drugstores owned by private citizens--free 
enterprise. You go in there, and the pharmacist is there, and you can 
get your drugs 50, 60, sometimes as much as 80-percent cheaper than 
what you get here.
  It is the same drug, made by the same manufacturer, that is that much 
cheaper in Canada. Why? Well, guess what. The Canadian Government buys 
the drugs. They negotiate with the drug companies to get a lower price 
because they buy in such huge volumes. Then the private pharmacist 
makes money on filling the prescriptions, watching your prescriptions.
  But in this bill we are forbidding Medicare from negotiating with 
drug companies for a better price. What a sweetheart deal that is.
  Let's see what seniors are going to pay for this and why this is kind 
of confusing. Here is what seniors are going to find out. Right now, 
here is what seniors pay under Medicare: Part A premium, hospital, 
nothing; Part A deductible, $876 for benefit period set for everybody; 
Part B premium $66.60 a month; Part B deductible for their doctor, $100 
per year, and a 20-percent cost share on each visit to the doctor's 
office.
  Very simple, very straightforward; every person in Medicare 
understands that.
  Now what? Well, let's see. Seniors who have an annual income above 
$13,470 per year will have to pay a yearly deductible of $250. They 
will then pay a $35-a-month premium, which can go up, by the way. That 
is not fixed in law. So that is $420 a year. That figure can change 
every year because if the private plan is not making the profit that 
they want, they can boost that figure up, and they will.

  After seniors have put in at least $670 up front, they can start 
receiving some

[[Page S15728]]

benefits. You might say, well, 670 bucks, that isn't much. Remember 
what I said: This is someone who is above $13,470 a year. Six hundred 
seventy dollars is a lot of money to someone making $14,000 a year and 
worrying about heating bills, buying food, taking care of themselves. 
So after they pony up $670, the Government will then pay 75 percent of 
the drug costs up to $2,250.
  What happens then? What happens then is that person making more than 
$13,470 a year will have to pay 100 percent of their drug costs up to 
about $5,000. That is the so-called donut hole. That is going to be 
outrageous.
  One day you are going in, you are getting your drugs, and you are 
paying 25 percent. You are going to go in one day and your drugs are 
$2,200, and then all of a sudden your pharmacist says: You have to pay 
full price.
  Why?
  Well, I am sorry. You reached the donut hole of $2,250.
  Think of it this way. If your drug costs are $5,000 a year, you will 
have to pay $4,000 out of pocket. And for that, we bribe HMOs, we give 
billions of dollars in subsidies to the pharmaceutical companies and to 
HMOs and to PDPs and whatever else.
  Another thing, a senior who has an annual drug cost of only $500 will 
pay more into the program than they receive. You will put in $500. If 
you have $500 in drug costs, you will pay $751.25 into this program 
every year. What a deal.
  To make things even messier, the program would create several tiers 
of classes under the Medicare Program. Again, there are different low-
income benefits available to those under 135 percent of the poverty 
level. That is $12,123 for a single person. There is another set of 
benefits for those under 150 percent of poverty level. That is $13,470 
a person. On top of that, to receive the low-income benefits, a senior 
must undergo an asset test. We threw the asset test out of here in the 
Senate. Now it is back in this bill. But now let's look at this asset 
test. For one group, those who are at 135 percent of the poverty level 
or below--that is below 12,000 bucks a year--if you are below that, the 
asset test is $6,000 for a single person. You can't have more than 
$6,000 in assets. It is $9,000 for a couple.
  For the group at 150 percent of the poverty level--let's see, that is 
$13,470--the asset test there is $10,000 in assets, $20,000 for a 
couple. So mind you, for a difference of a little over $1,000 a year, 
maybe about $1,300 a year, your asset goes from $9,000 to $20,000 for a 
couple; $6,000 to $10,000 for a single person. If this sounds 
confusing, believe me, it is. How are you going to decide where you 
fall?
  Let's take a group of senior citizens down at McDonald's having their 
morning coffee. They are all talking about the drug benefit when it 
goes into effect. Bob is over there, and he gets good benefits under 
the low-income benefit. But his friend Sue just took a job at the local 
supermarket at minimum wage to try to make ends meet, pay her heating 
bills. But because she has a little extra income, even though she 
barely makes any money, she is in a different class. So, therefore, she 
is going to get a different drug benefit.
  Margaret thought she was going to get some low-income benefits but 
she filled out her forms and she had too much life insurance, over 
$10,000 in life insurance. So she is out.
  How in the world is the average elderly citizen supposed to know 
where they fit into this mess? You are going to have several different 
people who make nearly the same amount of money each year and they are 
going to receive drastically different benefits.
  This is a formula for confusion and confrontation. You are going to 
be pitting elderly against one another. You are going to have friends 
wondering: Why is it that Bob over there gets all those benefits and I 
don't? We know that Bob owns something else. He is cheating maybe. And 
why did he get that and we didn't? Why is it that George over there 
gets all these low-income benefits? And you know George. All his life 
he frittered his money away, gambled it, boozed it up. Sure he doesn't 
have much now, but the Government is coming in and giving him 
everything.
  How about Bob? Bob over here worked hard all his life, raised a 
family, educated his kids. He is a man of meager means, but he has 
Social Security. He was frugal. He saved a little bit. He has a little 
life insurance policy. No, Bob, you don't get this. Your income may be 
just about the same as George's, a little bit more, but because you 
have a little bit of assets--you saved for a rainy day--you are out. 
Tell me what this is going to be like when the seniors get ahold of 
this and talk about it.
  Then there are those citizens who are going to lose retiree 
prescription drug benefits. Two to three million are going to lose 
prescription drug benefits. It is outrageous. This bill would spend 
roughly $88 billion to try to bribe employers not to drop retiree 
health coverage yet, even with that, 2 to 3 million seniors will lose 
their retiree benefits.
  Yes, the drug and health industries are spending millions to ram this 
bill through immediately, even though seniors across the Nation don't 
know what it contains. The authors of this bill did not let the senior 
citizens of this country see what was in the bill because they knew 
once they found out they would have trouble passing it here. Apparently 
a seat at the Medicare table was quite expensive.
  The Washington Post article from Saturday morning was entitled ``Two 
Bills Would Benefit Top Bush Fundraisers.'' It explains that the 
Medicare bill will benefit at least 24 Rangers and Pioneers as 
executives of companies or lobbyists working for them.
  A Pioneer in the Bush campaign is one who raises at least $100,000, 
while a Ranger is someone who has raised at least $200,000.
  I ask unanimous consent that this article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                       [From the Washington Post]

               2 Bills Would Benefit Top Bush Fundraisers


                Executives' Companies Could Get Billions

                         (By Thomas B. Edsall)

       More than three dozen of President Bush's major fundraisers 
     are affiliated with companies that stand to benefit from the 
     passage of two central pieces of the administration's 
     legislative agenda: the energy and Medicare bills.
       The energy bill provides billions of dollars in benefits to 
     companies run by at least 22 executives and their spouses who 
     have qualified as either ``Pioneers'' or ``Rangers,'' as well 
     as to the clients of at least 15 lobbyists and their spouses 
     who have achieved similar status as fundraisers. At least 24 
     Rangers and Pioneers could benefit from the Medicare bill as 
     executives of companies or lobbyists working for them, 
     including eight who have clients affected by both bills.
       By its latest count, Bush's re-election campaign has 
     designated more than 300 supporters as Pioneers or Rangers. 
     The Pioneers were created by the Bush campaign in 2000 to 
     reward supporters who brought in at least $100,000 in 
     contributions. For his reelection campaign, Bush has set a 
     goal of raising as much as $200 million, almost twice what he 
     raised three years ago, and established the designation of 
     Ranger for those who raise at least $200,000.
       With the size of donations limited as a result of the 
     campaign finance law enacted last year, fundraisers who can 
     collect $100,000 or more in contributions of $2,000 or less 
     have become key players this election cycle. The law barred 
     the political parties from collecting large--sometimes 
     reaching $5 million to $10 million--``soft money'' 
     contributions from businesses, unions, trade associations and 
     individuals. This has put a premium on those who can solicit 
     dozens, and sometimes hundreds, of smaller contributions from 
     employees, clients and associates.
       The energy and Medicare bills were drafted with the 
     cooperation of representatives from dozens of industries. 
     Power and energy company officials; railroad CEOs; 
     pharmaceutical, hospital association and insurance company 
     executives; and the lobbyists who represent them are among 
     those who have supported the bills and whose companies would 
     benefit from their passage.
       The Medicare bill was scheduled to be acted upon by the 
     House late last night. If passed, it will go to the Senate. 
     The first comprehensive revision of energy policy in more 
     than a decade passed the House this week, but in the Senate, 
     the measure ran into a roadblock yesterday when opponents 
     stopped it from coming to a vote. Sponsors promised to make 
     further efforts to get the 60 votes to break the filibuster.
       The energy bill provides industry tax breaks worth $23.5 
     billion over 10 years aimed at increasing domestic oil and 
     gas production, and $5.4 billion in subsidies and loan 
     guarantees. The bill also grants legal protections to gas 
     producers using the additive methyl tertiary-butyl ether 
     (MTBE), whose manufacturers face a wave of lawsuits, and it 
     repeals the Public Utility Holding Company Act (PUHCA), a 
     mainstay of consumer protection that limits mergers of 
     utilities.

[[Page S15729]]

       The bill has been the focus of a bitter ideological and 
     partisan fight for three years. A leading sponsor, Rep, W.J. 
     ``Billy'' Tauzin (R-La), Chairman of the House Energy and 
     Commerce Committee, praised the legislation, saying, ``All 
     Americans can look forward to cleaner and more affordable 
     energy, reliable electricity and reduced dependence on 
     foreign oil for generations to come.''
       Public Citizen, which has tracked the legislation and 
     correlated patterns of contributions to members of Congress 
     and to Bush, denounced the bill as ``a national energy policy 
     developed in secret by corporate executive and a few members 
     of Congress who are showered in special interest money.''
       Perhaps the single biggest winner in the energy bill, 
     according to lobbyists and critics, is the Southern Co. One 
     of the nation's largest electricity producers, it serves 
     120,000 square miles through subsidiaries Alabama Power, 
     Georgia Power, Gulf Power, Mississippi Power and Savannah 
     Electric, along with a natural gas and nuclear plant 
     subsidiary.
       The repeal of PUHCA, for example, would create new 
     opportunities to buy or sell facilities; ``participation'' 
     rules determining how utilities share the costs of new 
     transmission lines that are particularly favorable to 
     Southern; two changes in depreciation schedules for gas 
     pipelines and electricity transmission lines with a 10-year 
     revenue loss to the Treasury of $2.8 billion; and changes in 
     the tax consequences of decommissioning nuclear plants, at a 
     10-year revenue loss of $1.5 billion, according to the Joint 
     Committee on Taxation.
       At least five Bush Pioneers serve as a Southern Co. 
     executive or as its lobbyists: Southern Executive Vice 
     President Dwight H. Evans; Roger Windham Wallace of the 
     lobbying firm Public Strategies; Rob Leebern of the firm 
     Troutman Sanders; Lanny Griffith of the firm Barbour Griffith 
     and Rogers; and Ray Cole, of the firm Van Scoyoc Associates.
       The railroad industry also has a vital interest in the 
     energy bill. For years, it has been fighting for the 
     elimination of a 4.3 cent-a-gallon tax on diesel fuel, and, 
     at a cost to the Treasury of $1.7 billion over 10 years, the 
     measure repeals the tax. Richard Davidson, chairman and CEO 
     of Union Pacific, is a Ranger, and Matthew K. Rose, CEO of 
     Burlington Northern is a Pioneer.
       Among the major lobbying firms in Washington, Akin Gump 
     Strauss Hauer & Feld, has been one of the most successful 
     collecting fees for work on the energy and Medicare bills. In 
     the first six months of this year, Akin Gump, which has two 
     partners who are Pioneers--Bill Paxon and James C. Langdon 
     Jr.--received $1.6 million in fees from medical and energy 
     interests.
       Barbour Griffith & Rogers received $1.1 million from 
     similar clients.
       On energy issues, Akin Gump represented Amerada Hess Corp., 
     Waste Management Inc. and FirstEnergy Corp., Pacific Gas and 
     Electric Co., BP Exploration and Phillips Petroleum Co. Two 
     of those corporations have, in turn, executives who are major 
     Bush fundraisers, Pioneer A. Maurice Myers, CEO of Waste 
     Management; and Anthony J. Alexander, president of 
     FirstEnergy, a Pioneer in 2000 and again in the current 
     campaign.
       On Medicare issues, Akin Gump represents the Pharmaceutical 
     Research & Manufacturers of America, Johnson & Johnson, 
     Abbott Laboratories and Pfizer Inc. All would benefit from 
     the expanded markets resulting from a key provision of the 
     bill--the first federal subsidies to help Medicare patients 
     pay for prescriptions.
       Hank McKinnell, chairman and CEO of Pfizer, has pledged to 
     raise at least $200,000 for Bush's reelection, although he is 
     not yet listed as a Pioneer or Ranger. Pioneer Munr Kazmir, 
     who runs a direct-mail drug company called Direct Meds Inc., 
     estimates that he has about 100,000 customers on Medicare who 
     will have more money to buy drugs from his company. ``We know 
     the patients, we know how important this bill is,'' he said.
       In addition to the prescription drugs provision, the 
     Medicare bill is intended to encourage recipients to join 
     preferred-provider organizations (PPOs) and other kinds of 
     private health care, instead of receiving care through the 
     traditional fee-for-service system in which they pick their 
     doctors and generally get whatever care they request. The 
     health industry has provided substantial support to the Bush 
     campaign, and a number of officials whose companies and 
     associations actively support the Medicare bill are Pioneers 
     and Rangers.
       Pioneer Charles N. Kahn, president of the Federation of 
     American Hospitals, said that the Medicare bill will make 
     ``important strides in ensuring that all hospitals have 
     sufficient funding to meet the medical needs of this nation's 
     seniors.'' A federation spokesman noted that the bill 
     provides more money for rural hospitals and for hospitals 
     serving disproportionate numbers of the uninsured, and that 
     it prevents doctors from setting up new competing specialty, 
     or ``boutique,'' hospitals.
       M. Keith Weikel, chief operating officer at HCR Manor Care, 
     a chain of more than 500 nursing homes and other facilities 
     serving the elderly, is another Pioneer. Weikel and Manor 
     Care did not respond to requests for comment on the Medicare 
     bill, but the major nursing home trade group, The American 
     Health Care Association, strongly endorsed the bill, which 
     among other things, would continue to bar Medicare from 
     capping the amount it covers for various therapies offered by 
     health care providers such as nursing homes.

  Mr. HARKIN. The article goes on to describe how the drug industry got 
everything they wanted. I think seniors in this country deserve more. 
They deserve to be put first in the process. Instead they have been put 
last. Corporate interests, insurance companies, pharmaceutical 
companies, they come first. It speaks volumes that on Wall Street the 
health industry and drug stocks have surged with the emergence of this 
bill. Corporate executives may be popping their champagne corks in 
celebration of what happened here today, but seniors are left 
scratching their heads and wondering why their interests were 
forgotten.
  Maybe they assumed that the AARP would stand up for their interests. 
But AARP has brazenly betrayed the wishes of its members. Seniors need 
to know what direction Medicare is taking and whose side the AARP is 
on.
  It says everything about this bill that Newt Gingrich is urging 
Republicans to vote in favor of it. Remember, this is the same Newt 
Gingrich who was Speaker of the House and expressed his desire to let 
Medicare wither on the vine. Mr. Gingrich is one of those ideologues 
who insists that the private marketplace will solve all of our 
problems. It would make his day to see Medicare dismantled. If he is 
for this bill, that ought to give us pause for concern.
  Mr. Gingrich and his rightwing friends love this bill, like the head 
of Americans for Tax Reform, Grover Norquist, who once said:

       My goal is to cut government in half . . . to get it down 
     to the size where we can [drag it into the bathroom] and 
     drown it in the bathtub.

  Today, with this vote on this bill, Newt Gingrich's dream is coming 
true. The bill is a first step toward privatizing Medicare. You can bet 
that once the ink is dry, they will be starting on Social Security and 
going after that, too. Mr. Gingrich even went so far as to say he 
believed the pharmaceutical companies are getting unfair treatment; 
that they are punished by the success. Wrong. The bill doesn't ask for 
a penny from the pharmaceutical companies. I disagree.
  On page 53 of the bill, it protects drug companies from Government 
efforts to negotiate lower prices. That is on page 53, line 18. It says 
that Medicare cannot negotiate for lower prices for drug companies.
  A recent Peter Hart poll found that almost two-thirds of seniors view 
this bill unfavorably. Most of them identified themselves as members of 
AARP, American Association of Retired Persons. Among those AARP 
members, only 18 percent said Congress should pass this bill, while 65 
percent said Congress should get back to work. Last week, AARP members 
from Maryland, New York, and Pennsylvania tore up their membership 
cards in front of their organization's headquarters here in Washington. 
Members are accusing William Novelli, CEO of AARP, of ``selling out'' 
to insurers and selling out to Newt Gingrich. Where did they ever get 
that idea?
  Well, in fact, the relationship between Newt Gingrich and the bigwigs 
at AARP goes way back. William Novelli, the head of the AARP, wrote the 
preface to Gingrich's book, ``Saving Lives, Saving Money.'' In that 
preface, he states:

       Newt's ideas are influencing how we at AARP are thinking 
     about our national role in health promotion and disease 
     prevention and in our advocating for system change.

  That is Mr. Novelli in Newt Gingrich's book. I would have to ask Mr. 
Novelli which of Newt's ideas are ``influencing how we at AARP are 
thinking''? Is it Newt's wish that Medicare wither on the vine? Is that 
influencing Mr. Novelli's thinking?
  AARP's endorsement is disturbing for another reason. They have a 
flagrant conflict of interest in this matter. They receive vast 
revenues from the sale of insurance to seniors. Royalties from such 
arrangements include deals with UnitedHealthcare Insurance Company, 
Metropolitan Life Insurance Company, and Advance PCS pharmacy benefit 
manager. All that accounted for more than one-third of AARP's $630 
million in revenues last year, according to AARP's 2002 annual report.
  If you open up any newspaper in the last 3 days, you have seen full-
page ads by AARP telling you why this is such a good bill--full-page 
ads in USA Today, the New York Times, Washington Post, and on and on.

[[Page S15730]]

  First of all, I want every elderly person who belongs to AARP to 
think about this and the dues they pay. Think of all that money being 
siphoned off to ad agencies. Think about all that money being spent on 
these full-page ads to get Congress to rush this through and pass it. 
Well, Americans deserve better from AARP. They deserve better from 
Congress.
  This bill reflects the priorities of Newt Gingrich, who has been 
hostile to Medicare since its inception. Seniors know this bill is a 
betrayal. They know who the winners and losers are with this bill. 
HMOs, PPOs, pharmaceutical companies, on premium support, they win, and 
seniors and disabled lose. On cost containment, they win because 
Medicare is prohibited from bargaining for better prices, and seniors 
and disabled lose. On drug coverage, pharmaceutical companies win and 
seniors lose. On health savings accounts--my, my, my, now we have 
them--HMOs win, seniors lose; stabilization fund--a slush fund is what 
it ought to be called--again HMOs and PPOs win, and seniors lose; on 
competition, pharmaceutical companies win big time on that and seniors 
lose.
  It may seem in what I am saying tonight that somehow I am opposed to 
insurance companies. Nothing could be further from the truth. In my 
State of Iowa, I think we are, if I am not mistaken, the second largest 
domiciliary for insurance companies in America, second only to 
Connecticut. Insurance has a prominent role in Iowa. It employs a lot 
of people. Insurance can provide meaningful protection for a lot of 
people. I happen to have a lot of insurance--homes, cars, life 
insurance; I have all kinds of insurance. It is a good deal. I have 
benefited from insurance. Insurance is good. It shares the risk. You 
put people in a large pool and it shares the risk. That is the basic 
essence of insurance, and there is one principle of insurance that 
everyone understands, or should understand: The bigger the pool, the 
less the risk for everyone in the pool.
  But what is Medicare doing? What are we doing in this bill with 
Medicare? We are dividing up the pool: a little bit here, a little bit 
there, and a little bit there. Under the health savings accounts, the 
healthiest will opt out. Under premium support, the healthiest will be 
cherry-picked by the HMOs.
  The PRESIDING OFFICER. The Senator's time has expired. Under the 
previous order, the Senator from Nevada is recognized.
  Mr. ENSIGN. I ask unanimous consent that Senator Grassley be 
recognized for 2 minutes to make a point, and then I will follow.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, there is an issue that my colleague from 
Iowa brought up that I don't want to take exception to or argue with 
him about. He finds fault with something on page 53 of this bill called 
noninterference. That is perfectly legitimate for him to take that 
point of view. But I want to point out something that Senator Santorum 
had pointed out earlier in the day's debate, in which a very similar 
noninterference provision was in a Democrat prescription drug proposal 
introduced May 10, 2000.
  I don't mind intellectual arguments against this, but when 
Republicans take a Democrat idea and put it in our bill, I don't think 
it is fair for colleagues on the other side of the aisle to find fault 
with what we are doing. I only want to make that point. I don't want to 
argue with my friend from Iowa. I think everybody ought to know that 
this is something that has had broad bipartisan support.
  I yield the floor.
  Mr. HARKIN. Will the Senator yield because I was mentioned? I just 
want 30 seconds. I was opposed to it at that time, too. I was opposed 
to the noninterference at that time. I have always been opposed to it.
  Mr. GRASSLEY. I thank the Senator.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. ENSIGN. Mr. President, I now want to take my time and talk about 
the Medicare reform and prescription drug bill that we have before us 
today. I rise to explain how and why I am going to vote on this bill.
  From the day I was sworn into office in 1995 as a Congressman, I have 
spent as much time on strengthening the Medicare program as I have any 
other single issue considered by Congress.
  On the Health subcommittee of the House Ways and Means Committee, I 
learned the details of how this comprehensive healthcare system works 
for our seniors and the disabled.
  I have tried to keep true to the principle of making Medicare more 
oriented to keeping seniors healthy, not just waiting until they become 
ill to treat them.
  With the growth of Medicare costs and the baby boom population, I 
also believe just as strongly that the structural security of Medicare 
must be kept healthy and reforms must not wait until the program is 
ill.
  As a Senator, I have continued to pursue my passion for healthcare 
policy. I campaigned on and introduced my own Medicare prescription 
drug bill, along with Senator Chuck Hagel.
  I was proud that our bill received the votes of a majority of the 
Senate when it was considered last year, although not adopted as the 
final bill.
  Aside from the prescription drug benefit in the bill, I strongly 
believe that for Medicare to remain healthy, structural reforms must 
take place that control unnecessary costs through market forces and 
allow the program to operate more efficiently and more preventatively.
  This bill contains a number of provisions that I hope will help drive 
down the increasing costs of health care, not just for our seniors, but 
throughout the entire healthcare market place.
  Health Savings Accounts will give patients control over their care, 
to include who patients go to for care, as well as control over their 
individual expenditures. If shown to be successful, this would be the 
most sweeping healthcare reform since the managed care model over a 
decade ago.
  Likewise, income-relating of the Medicare Part B premium, the disease 
management demonstration project, and the prescription drug card with a 
private account--by the way, that was a component of the bill Senator 
Hagel and I introduced--are all positive aspects of this legislation.
  I am pleased that in the bill are two other critical reforms that I 
spearheaded in the House and now in the Senate.
  Placing a 2-year moratorium on the outpatient therapy cap is a win 
for our oldest and sickest Medicare seniors. Those who suffer from 
life-threatening ailments such as Parkinson's disease and stroke should 
not have to pay every dollar out of pocket just because they require 
additional care.
  The bill also includes a provision that eliminates the late penalty 
military retirees pay for joining Medicare. Our military retirees, who 
gave so much of their lives to our country, deserve access to the best 
healthcare benefits available without being penalized for changes in 
the system. They thought they were going to get lifetime Health Care. 
Then, when they were put into the Medicare system they were not 
informed, or at least many of them were not aware that if they did not 
sign up right away, later they would have to pay extra penalty costs.
  Joining me in helping to get these passed was Senator Lincoln, and I 
would like to thank her for all of her efforts.
  The reason I have struggled so fervently over the merits of this 
legislation is the substantial financial burden this bill places, not 
only on the Medicare program, but on the country.
  The benefits in this bill will assist seniors and disabled Americans 
only to the degree that our Nation is fiscally able to sustain paying 
for it. That is why I drafted a bill that was responsible to the next 
generation of workers who will bear the burden of paying the price tag 
on Medicare prescription drugs.
  I want to put up a couple of charts that help us understand what we 
are dealing with for the next generation.
  Until 1970, we had about 20 million seniors in our Medicare Program. 
Today we have a little over 40 million seniors, 30 years later. Thirty 
years from now we will have close to 80 million seniors, equaling 
another doubling of the number of seniors.
  This chart shows the problem. These are the number of workers per 
senior, per retiree, per person over 65 who we have in this country. In 
1970, for every one retiree we had a little over seven people, on 
average. In 2000, that had slipped to 3.9. When that huge expanse

[[Page S15731]]

of the baby boomers is in full bloom in 2030, we will have 2.4 workers 
for every one retiree.
  I remember Senator Phil Gramm telling us that means there are a lot 
more people riding in the cart and a lot fewer people pulling the cart.
  I believe this bill threatens the fiscal security of the Medicare 
Program and compromises the continued growth of our economy by lacking 
the necessary cost controls to keep it from consuming our domestic 
budget. I personally believe the cost of this bill is grossly 
underestimated. By the time the drug benefit goes into effect in 2006, 
we will have a better understanding of the enormous cost of this bill 
but at that time it will be too late to do anything about it. Without 
measures to contain overutilization, the Government or the private 
sector plans will be forced to ration prescription drugs for our 
seniors, similar to the way care is rationed in Canada.
  While all major legislation requires legislative corrections after 
becoming law, I believe that before the ink is dry on this new benefit, 
a campaign will be underway to expand this program by closing the 
coverage gap that exists in the bill. I believe there will also be 
efforts also to reduce deductibles and reduce premiums as well, further 
transferring costs onto the next generation.
  While providing seniors with a prescription drug benefit is so very 
important to all of us, it must be done in a way that does not bankrupt 
Medicare and threaten future access to care in our country for our 
seniors. It also needs to be fiscally responsible to the next 
generation.
  I believe the Congressmen and Senators who put this bill together 
labored so intensively, and they did it for the right reasons. They had 
pure motives. I also appreciate the leadership the President has shown 
on this issue. In fact, if we would have adhered more to the principles 
that he laid out at the beginning of the year, I believe we would have 
a much better bill before us today--perhaps a bill I could support.
  I am very disappointed in the debate these last few days in how 
people have politicized this bill. Unfortunately, I believe many have 
done so for their own political benefit. There have been many things 
said about this bill. You could say many negative things about this 
bill, and you could say many positive things as well. However, what we 
ought to do in this Chamber is at least talk about what is in the bill 
and what is not in the bill. To mischaracterize the bill, I believe, is 
patently unfair, and it is just wrong to scare senior citizens into 
thinking that Medicare is somehow going to go away.
  We must remember that most of the private sector reforms in this 
legislation do not even kick in for several years. So to scare seniors 
I just, frankly, believe is wrong.
  I have anguished deeply over this bill. There really are some 
positive things in it, things that I like. But, overall, I just believe 
the negative things in it outweigh the positive. That is why I, 
unfortunately, am going to have to vote against this conference report.
  I look at the chairman of the Finance Committee who is on the floor 
right now, and there is just no finer person in the Senate than Senator 
Grassley.
  So it is with a heavy heart that I announce that I am going to vote 
against final passage of this bill because I know that he did his best 
to put together a bill with all the different people he had to work 
with in the House and the Senate, the various interest groups and the 
like. But I believe this bill does not rise up to the level where I 
think the positives will outweigh the negatives in the future. I think 
the costs are going to be too great. Looking at the first 10 years, it 
is estimated to be around $400 billion. For the second 10 years, I know 
of estimates as high as $1.7 trillion. Do we really want to shoulder 
our children and our grandchildren with this burden? That is a question 
each of us has to least ask ourselves, and go into this with our eyes 
wide open. Twenty years from now when we look back on this debate and 
on our entire careers, will we be able to say we really did what was 
right for the future of our country? I hope that in fact we can.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. NELSON of Florida. Mr. President, I had the privilege of 
addressing the Senate yesterday on this bill. This is the bill that we 
are considering--some 675 pages. My statement yesterday announced that 
after spending the better part of the weekend trying to comprehend some 
of the details of this bill, I have come to the conclusion that I will 
vote against this legislation for a number of reasons.
  As has been stated by so many Senators, there is a lot that is good 
in this bill. Clearly, the part about reimbursement to doctors and 
other health care providers is very important. Interestingly, while 
giving enormous subsidies to PPOs and managed care to the tune of some 
$12 billion, they take away from oncologists and other cancer providers 
in this bill $11.5 billion. That is a part to which I strenuously 
object.
  For my predecessor, Senator Connie Mack, who has been at the 
forefront of the fight against cancer, this is one of the provisions 
that is causing him enormous agony. Visiting with so many of the 
oncologists all over the country, it is just inexplicable to them as to 
why there would be a $11.5 billion cut on cancer care. The truth is, it 
was a tradeoff. It was a tradeoff back when we originally considered 
the bill in the Senate to provide for rural health care. You had to get 
the money from somewhere. The choice was to take it from cancer care. I 
think that was not only a poor choice, but I think it was a tragic 
choice. But that is in this bill. That is one of the reasons I am 
against it.
  But there are other things that are good in this bill, and a lot of 
that has to do with trying to get physicians and other health care 
providers adequately compensated instead of cuts that were enacted some 
5 to 7 years ago in the Balanced Budget Act of 1997, which really 
started cutting health care providers to the bone in their Medicare 
reimbursement.

  But there is a lot more in this bill that is causing me great 
concern. It is why I am going to vote against it. I want to share that 
with everybody.
  One of the toughest jobs that I have had in a lifetime of public 
service is the years that I served as elected Insurance Commissioner of 
the State of Florida. I inherited a mess in the aftermath of Hurricane 
Andrew. I had to learn something about insurance marketplaces and how 
in a devastated insurance market we could encourage and nourish the 
free market back to competition. In the aftermath of Hurricane Andrew, 
the insurance companies--other than the 12 that went bankrupt--were 
fleeing the State of Florida. Those who stayed were cancelling 
homeowners right and left.
  We had to dig in to see what would make that insurance marketplace 
tick, and what would encourage insurers to come back into the 
marketplace; at the same time, what would provide the needed 
commodity--namely, in this case homeowners insurance--to the consumers 
of Florida.
  Because a marketplace had been disrupted by the most costly natural 
disaster in the history of the country in insurance losses, a lot of it 
we had to learn by first impression. We were successful in doing that. 
It took a long time. It was very difficult. One of the things that I 
learned about insurance in the marketplace is when you get to health 
insurance, you should let the principle of insurance work for you; that 
is, you take the health risk and spread it over the largest possible 
group so that the health risk--when it comes out in costs because 
people get sick and they have to have health care expenditures--because 
it is a huge group and it is a diverse group in age and health, the per 
unit cost comes down.
  One of the things that used to frustrate me the most as the Insurance 
Commissioner of Florida was when the new products would be filed, they 
would be filed for a very small group. The insurance company would 
drive the cost of the premium down so that it made it very attractive 
for people to take that particular brand of health insurance. But over 
the course of time, instead of the insurance company continuing to 
expand that group, they would keep it stagnant. Over time, people would 
drop out. Over time, people would get older. Over time, people would 
get sicker. The group would start getting older and sicker and smaller. 
Since the group was defined and not expanding, what do you think the 
costs were going to be? The costs

[[Page S15732]]

were going up. That meant the premium was going up in order to make 
that group actuarially sound in what they were charging for that 
insurance.
  People were stuck in an insurance group. They had no place else to go 
because they weren't employed by a big employer. They certainly 
couldn't go out on their own and buy a policy for one individual. The 
cost would be astronomical for that. They were stuck in a spiraling, 
upward cycle of insurance costs and insurance premiums that went to the 
Moon.
  I saw people literally cry giving testimony about how they could not 
afford it.
  I learned something from that. I learned that if you are going to 
have a logical way of handling health insurance, it can't be with a 
small group. It can't be with a segmented group. It needs to be with a 
large group.
  Beyond this particular bill, as we look ultimately to the future of 
what we are going to do about health care delivery and its costs in 
this country, in my judgment, since I would like to see it delivered by 
the private sector and free market competition, you are going to have 
to expand the groups. You are going to have to make them as large as 
possible so that the companies compete for that business. It is when 
you start to shrink that large group that you get into 
trouble. Senators, that is what this bill starts to do. It starts to 
selectively take people in Medicare, segmenting them, separating them, 
dissecting them, and ultimately when the healthier people in America--
in this particular case, Medicare--when the healthier people in 
Medicare are siphoned off, it leaves the sicker seniors to be dealt 
with in Medicare. And what will happen to the cost? The cost will go up 
and it will go up big time.

  The figure has been thrown out in this bill that the starting point 
for the premiums for the Medicare prescription drug benefit will be $35 
a month per person. That is not going to happen. It will happen when it 
starts off in 2006, but as the group gets sicker, the costs are going 
to go up and the premiums--that $35 per person per month--are going to 
go through the roof.
  Why are they getting siphoned off? Look at the provision. The 
provision says we are going to divide up the country in regions. Say 
one State is a region. First of all, it says that you are going to 
offer the benefit in 2 ways. It will be offered with what is called a 
PDP, or prescription drug plan, and there is going to be the 
alternative of managed care, either a PPO or an HMO.
  What this bill provides is the incentive for the healthier seniors to 
go into the PPO or the HMO because this bill has a very generous 
subsidy--as a matter of fact, $12 billion--to be used at the discretion 
of the Secretary of HHS, to nourish the PPOs so they can bring their 
costs down, so they can make it very attractive to senior citizens to 
come into the PPO because they can get their health care cheaper--
indeed, all of their health care, including the Medicare fee for 
service.
  Also in this bill is a healthy subsidy for HMOs. This bill does not 
allow reimbursement for HMOs per patient like Medicare at 100 percent 
but kicks it up an additional 9 percent, 109 percent reimbursement. So 
the Medicare HMO then will be able to offer lower costs for services, 
thus enticing the senior citizen population, particularly the ones who 
are healthier, particularly when they use such recruiting methods as 
going into bowling alleys and recruiting seniors to come into the 
managed care operation, the PPO or the HMO.
  What will that do? That is going to leave the rest of the seniors to 
get their drug benefit from the only other available way, which is the 
prescription drug plan. And if their seniors are sicker, what do you 
think will happen to the cost? The cost is going to go up and the 
marketplace under this bill is starting to be fragmented, violating the 
principle of insurance which is, take the largest possible group, 
spread the health risk over the group, and it brings down the per unit 
cost.
  There is another way it is being fragmented, and that is the basic 
health care population in America. If another 5 or 10 years down the 
line we ever want to do major health care insurance reform--and it is 
done around employers just because we have done it that way 
historically--if your employer is a big employer, such as the Federal 
Government or General Motors, you have a big group in which to spread 
the health risk. But what happens if the employer has five employees or 
two employees or one employee? It is not an efficient way of delivering 
health care through an insurance system.
  Indeed, that provision in this bill is another way of fragmenting 
that population, another way of segmenting that population that 
ultimately, when we have to face this crisis--as surely we are going to 
someday--you cannot keep operating in a country this large, with 44 
million people who do not have health insurance, who at the same time 
get health care because when they get sick they go to the most 
expensive place at the most expensive time--to the emergency room--when 
sniffles have turned into pneumonia. Sooner or later, the crisis will 
become apparent and we will have to deal with it, if the entire 
population has been so fragmented as a provision of this bill in 
creating health savings accounts.

  Now, for people who have some means of income, this is a very 
attractive alternative. Health savings accounts will allow someone to 
take dollars, without paying tax on them, and put them into a health 
savings account at the end of the year. Unlike in present law regarding 
medical savings accounts where, if the dollars are not used, they self-
destruct, these dollars will accumulate. And it will not be just for 
medical emergencies. Those dollars can be put aside. They can go out 
and buy an insurance policy that has a high deductible, such as $5,000. 
Even if they put $5,000 into the health savings account, they have 
saved a lot of money because of the cost of insurance if they were 
getting, say, a $500 deductible policy. That money can accumulate and 
they can pay for other things than medical expenses, such as cosmetic 
surgery. So, for a good part of our country that has the financial 
wherewithal, that is very attractive.
  It is dissecting the overall insured population, and when the crisis 
comes, it will make it very difficult to get these large pools upon 
which we can spread the health risk and where private sector insurance 
companies can come in and bid for that particular pool. That is another 
reason I oppose this legislation. It violates the principle of 
insurance.
  Some talk about it as a giveaway to the HMOs and the PPOs, pushing 
seniors into managed care where they lose their choice of doctors. That 
speaks for itself. Over time, when this kicks in, in January of 2006--
that is another 2 years and 1\1/2\ months--people are going to start 
realizing what has happened.
  There is another reason I oppose this bill. That is, you cannot go 
out and offer the alternatives I have just explained for prescription 
drugs, subsidized by the Federal Government for managed care, without 
private employers who have drug coverage for their former employees, 
now retirees, without the private employer asking, why do I want to 
continue this costly prescription drug coverage for my retirees when, 
in fact, I will let these retirees go on in to the Medicare system of 
prescription drugs.
  If it were an equal prescription drug benefit, that would be OK for 
the senior citizen, the retiree. But the shock they are going to get is 
when their private employer, former employer, drops them as a retiree 
and they look to Medicare under this bill to give them a prescription 
drug benefit, and, lo and behold, they will find it is a very 
inadequate benefit. If they have $5,000 worth of drugs that they have 
to buy in a year, the senior citizen under this plan is going to pay 
out of his own pocket $3,600, $3,600 under this prescription drug plan 
for the senior citizen who has an annual prescription drug cost of 
$5,000.

  So all of these retirees who are going to be dropped are going to be 
quite shocked and quite unhappy and quite disappointed, when they 
thought they were getting a full prescription drug benefit.
  So in my State, for example, it is estimated by one of the very 
credible studies--and I have heard no one who has disputed this study--
that 2.7 million retirees will be dropped from their private drug 
coverage. In my State of Florida, that translates to 166,000 people. 
And I suspect that is going to be a very unhappy 166,000 people in the 
State of Florida.

[[Page S15733]]

  It is true that since this bill does cover those up to 150 percent of 
the poverty level, there is going to be, for that group, some increased 
coverage that they do not have now, but it is not going to be much. It 
is not going to be much because a lot of that group who would otherwise 
qualify because they meet the income test of being at that level of the 
poverty level, lo and behold, this bill now puts an asset test on them. 
That asset test is going to disqualify thousands of them. And if it 
does not, they are going to see that they are limited, under this bill, 
in the brands of drugs, the brand name drugs, because this bill defines 
their receipt of drugs in a class, and that class of drugs is yet to be 
determined. There are going to be some disappointed seniors.
  There is another reason for opposition to this bill. We talked about 
there not being any competition for the prescription drug plan and 
how--since there do not have to be two prescription drug plans 
competing against each other and therefore holding the cost down, 
holding the premium down--that $35 monthly premium is going to go up. 
But in this bill there is also another violation of a principle we have 
found in Medicare ever since Medicare was set up in 1965; and that is, 
the premium is universal. The farmer in Iowa who is retired is paying 
the same premium as the retiree in Miami Beach, even though the costs 
of health care in Iowa and Minnesota are much less than the cost of 
health care in south Florida. There is a universality of the Medicare 
Part B premium.
  That is going to be broken up, not on the Part B premium but on the 
Part D premium, because this bill causes the division of the country 
into at least 10 and some say as many as 50 regions in this country, 
each to be actuarially determined what is going to be the premium that 
will be actuarially sound with regard to that premium, with regard to 
the group, and with regard to the cost. So I do not think this bill is 
procompetition even though that is how it is being sold.
  The last reason I will state tonight of my reasons for opposition is 
one that has been mentioned many times here. Mr. President, $400 
billion is lot of money. It depends on how you look at it. The Senator 
from Nevada, who just stood up and announced he was voting against the 
bill, has made a very eloquent statement about the cost being so high, 
$400 billion, at a time we are hemorrhaging to the tune of half a 
trillion dollars in deficit financing this year.
  But I might want to take it in another direction and say, yes, $400 
billion is lots of money, but it is not being efficiently used. The 
reason it is not being efficiently used is that Medicare is strictly 
forbidden, in this bill, from negotiating with pharmaceutical companies 
for bulk purchases.

  Now, I thought we were for free market competition. I thought we were 
for letting the market forces determine what the price is. But this is 
an exact opposite of that. This is an interference in the private 
marketplace for it says Medicare cannot negotiate in bulk purchases a 
price less than the retail price. It is in here. It is in here not only 
on one page, it is in here on two pages.
  It is unlike what has been done for nearly 20 years in the Veterans' 
Administration, in a bill that passed this Senate on a voice vote 
because it was so noncontroversial that the U.S. Government would 
negotiate through bulk purchases for the acquisition of drugs for the 
Veterans' Administration.
  The Veterans' Administration is serving a population of about 25 
million veterans. Medicare is serving a population of about 41 million 
Americans. If the Veterans' Administration can negotiate prices 
downward, why should not Medicare be able to lower the cost of the 
drugs to seniors? It is not logical that you would not. And it 
certainly is not logical when you consider we are constrained under the 
Budget Act that we cannot spend more than $400 billion, until we waived 
that today.
  So $400 billion, at a retail price of a drug, that on the retail 
market is going to cost at least twice the cost of the drug to the 
Veterans' Administration, which is buying in bulk--we would be able to 
provide so many more of the benefits of prescription drugs to seniors 
without their having to pay so much in a deductible and in copays; and 
in some cases the copay is an entire 100 percent until they get past 
the threshold of spending $5,000 a year for drugs.
  Now, I have counted noses. This thing is going to pass. It is either 
going to pass tonight or it is going to pass in the morning. It passed 
the House two nights ago, when they held the vote open for 3 hours 
until they twisted arms and turned the vote around. So it is going to 
pass.
  Well, it is not going to pass with my vote for the reasons I have 
stated, that I think are against the interests of the United States and 
my State. But I am going to do something about it after it passes 
because I have already started drafting a bill that is going to say, 
what is good for the Veterans' Administration ought to be good for 
Medicare as well, and that if the Veterans' Administration--under a law 
that has been in effect for two decades, that was noncontroversial when 
it was passed--can purchase in bulk and therefore bring the price down, 
so, too, ought Medicare, for the sake of our senior citizens, be able 
to get a more extensive prescription drug benefit than the meager one 
they are going to get in this bill.
  I will be introducing that bill. I think one of the people I am going 
to work with is my senior Senator, Mr. Graham, since he has announced 
his retirement in the last year of his service as a Senator, and the 
two of us will put together a comprehensive package. But that is 
certainly one aspect of it that we are going to be following.
  I thank the Senate for its attention. I yield the floor.
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. WARNER. Mr. President, I would propose to proceed for a short 
period--I think we are going back and forth--unless one of my 
colleagues signifies to the contrary.
  I have listened very carefully, as indeed I think all Senators have, 
to the very strongly held views of colleagues on this bill. My good 
friend, the Senator from Florida, who proudly serves on the Armed 
Services Committee, and I work together. I was quite interested in what 
he had to say. I guess on most military issues we are together, but on 
this one we seem to have differences of opinion. I would say that our 
distinguished colleague from Florida does represent quite a few senior 
citizens, so I expect he has done a little bit more of his homework to 
develop his views here tonight. Nevertheless, I respectfully differ, 
and we are going to have to think what is in the best interest of the 
country as we approach this vote, whenever that will occur.
  I rise in support of the conference report to H.R. 1, the Medicare 
Prescription Drug and Modernization Act of 2003. Medicare was created 
in 1965, a nationwide insurance program that offered health insurance 
protection for approximately 40 million older Americans and those who 
have had the misfortune of becoming disabled. The program provides 
broad coverage for many health services, but there are gaps--how well 
we know that--in this program that has been working since 1965. Those 
gaps create no coverage in some instances. That is the reason we are 
here today, to plug those gaps.
  I think under the leadership of the distinguished Senator from Iowa, 
Mr. Grassley, the distinguished majority leader, many others who have 
worked so long and hard on this bill, we have done more than plug the 
gaps. We have done more. I hope that increase, which is well deserved 
by the seniors, is appreciated because it is important to these 
individuals.
  I myself proudly fit into the category of a senior citizen. In fact, 
when I am speaking publicly, quite often I am not introduced as a 
senior Senator but as a senior citizen. There is usually a lot of 
laughter among the crowd, but I look them square in the eye and say 
that I am very proud to have that status as a senior citizen. My mother 
lived to be 98 years old. I kind of hope I can follow along in her 
footsteps.
  One area in the current Medicare Program where a major gap exists is 
in the coverage of prescription drugs. We know that so well. Medicare 
currently provides no outpatient--if you are in the hospital, you can 
get some--prescription drug coverage. That is because when Congress 
created Medicare in 1965--it is interesting, when they created it in 
1965, prescription drugs

[[Page S15734]]

were not a major component of the health system.
  That is fascinating to me. My father was a medical doctor. He was a 
surgeon. I remember he used to carry that black bag, and he used to 
have several bottles of pills in it, to the best of my knowledge. I 
know he was very careful in how he dispensed all those drugs. But when 
we stop to think, it has been a dynamic, if not revolutionary, change 
in the practice of medicine and health care owing to the development of 
prescription drugs. So since 1965, there have been a lot of positive 
developments in health care.
  One major positive development is prescription drug innovations. We 
are proud in America of the many innovations we have had. Those 
innovations have improved the quality of life for those with chronic 
conditions such as heart disease, diabetes, arthritis, and others. 
Prescription drugs are now an essential component of today's health 
care system. They often allow individuals to stay out of the hospitals 
and, therefore, not become a burden on the already overburdened health 
care system in the United States. That is owing to prescription drugs.

  That is the reason--the prescription portion of this--why I am so 
fervently and strongly in support of this legislation.
  I have had the good fortune of representing the citizens of the 
Commonwealth. I was talking to the distinguished majority leader. When 
this session of the Congress concludes, it will be 25 years. A quarter 
of a century I have been privileged to serve in this Chamber. 
Throughout that period of time, as all of us do, we travel extensively 
throughout our States. We have our town meetings and otherwise. How 
often have all of us come across those individuals who simply say they 
struggle to pay for these prescription drugs, a well-worn but truthful 
phrase. Often they give up the bare necessities of life--food and 
shelter--to pay for their drugs. So we have all heard those stories.
  I am proud that this act will go a very long way to remove that 
anecdotal phrase from our town meetings and from these individuals. 
They are not aggressive about it. Really, they are very sad and almost 
embarrassed to say they have to dip into their basic necessities of 
food and shelter to meet their daily requirements, weekly requirements, 
whatever the case may be.
  Some say they ration the drugs they are instructed to take by their 
physician. Imagine that. A physician says you take a pill a day, and 
they can't afford it. They take a pill every other day. That is just 
impacting the health of so many people.
  I hail this section on the prescription drugs. I think it is a 
remarkable step forward. This outpatient benefit is long overdue. Now 
we are about, with a historic vote, to provide that.
  Many of us have worked these years to try to come to this point in 
the Senate where we do have this prescription drug outpatient Medicare 
Program. I have in the past voted for a number of pieces of 
legislation, have cosponsored a variety of bills to add such a 
prescription drug benefit. In fact, in an effort to reach a legislative 
consensus, I even offered my own bill. It was bipartisan. I was joined 
by Senators Collins and Dayton early this year. It was very simplistic. 
I look at the remarkable size of that. It is about 8 inches thick. Our 
bill was probably not more than a dozen or so pages, but at least it 
went to a partial solution of this problem faced by so many people who 
could not afford their drugs.
  None of these measures ever got enough support in either the House of 
Representatives or the Senate. As a result, while we in Congress 
continued to debate this issue, America's seniors continued to suffer.
  Today, though, we have a historic opportunity before us. Early 
Saturday morning the other body passed their report and now we are 
about to pass ours. I am confident we will. At that moment, across this 
Nation will go the voice of the Congress saying that we have at long 
last, since 1965, done our best to try to put together legislation to 
take care of the 40 million beneficiaries of Medicare that exist today.
  Under this legislation, starting in 2004, all Medicare beneficiaries 
will be able to receive a Medicare-endorsed prescription drug discount 
card. It is estimated these cards will save seniors between 15 and 25 
percent on their prescriptions. Low-income beneficiaries will also 
receive a $600 subsidy on their card towards the purchase of 
prescription drugs.
  I am very proud in the way the drafters of this bill have put such a 
tremendous emphasis on the low-income Americans. Pain knows no class, 
no age. Pain is endured by all. Perhaps those of us who have a bit more 
than others were able to alleviate our pain, but we certainly cannot 
let those less fortunate than ourselves suffer.
  So I think this $600 subsidy is a magnificent part of this bill.
  Then, starting in 2006, beneficiaries will be able to, at their 
option, sign up for a new Medicare prescription drug program. This 
program is entirely voluntary, so if a senior already has solid 
prescription drug coverage and does not want to participate, he or she 
doesn't have to sign up for the program.
  Those seniors that do voluntarily sign up for the program will 
receive standard prescription drug coverage that covers 75 percent of a 
senior's drug costs up to $2,250 in drug expenses, after meeting a $35 
monthly premium and a $250 deductible. After a beneficiary has spent 
$3,600 out of their own pocket on prescription drugs, the standard 
plan's catastrophic coverage will cover at least 95 percent of 
prescription drug costs.
  Under the bill, very generous assistance is provided to low-income 
beneficiaries. In my view, these low-income provisions are truly the 
hallmark of the bill, as these seniors are truly the one's who have 
most struggled to obtain the prescription drugs they need. These 
seniors will pay little or no premium and little or no deductible, 
based on their income, and will only have to pay at most a $2 copay for 
a generic drug and up to a $5 copay for a brand name drug.
  What does this new drug benefit mean to Virginians? If passed and 
signed into law, it will provide the nearly 1 million Medicare 
beneficiaries in the Commonwealth with access to a Medicare 
prescription drug benefit for the first time in the history of 
Medicare. Almost 400,000 of these individuals will qualify for the 
generous low-income benefits.
  But, not only does this legislation directly help Virginia's Medicare 
beneficiaries by providing a prescription drug benefit, the legislation 
also provides needed enhancements to Medicare providers to ensure they 
are more adequately reimbursed for their services. As we have seen, 
without adequate reimbursement, health care access can become a real 
issue as doctors and other health providers cut back services or even 
close their doors to Medicare beneficiaries.
  That is one of the reasons I strongly support this bill. We simply 
have to help those people access the care which those of us here in the 
Senate and the Congress enjoy, and indeed that many other Americans 
with larger corporations and small businesses enjoy, too. Some of them 
are being denied the Medicare rights.
  This legislation recognizes this fact and provides significant 
assistance to Medicare providers. For example, the bill blocks the 
proposed 4.5-percent cut in physician reimbursement in 2004 and 2005 
and updates their reimbursement by 1.5 percent in both 2004 and 2005. 
This one fix alone will result in an influx of almost $200 million into 
Virginia's health care system.
  Now, while I strongly support this historic legislation, I must admit 
that in no way is this bill a perfect bill. It is certainly not the 
bill I would have drafted.
  But, our leaders in the Senate on this legislation--the bipartisan 
team of Senator Grassley, Senator Baucus, Senator Breaux, and our 
Majority Leader Senator Frist--really should be commended for their 
work. After the Congress has for years struggled to reach an agreement 
on this matter, we have finally reached what appears to be a strong, 
compromise bill that the President will sign.
  And, while I intend to vote for this bill shortly, I do wish to take 
a moment to raise a few brief points of concern that I believe Congress 
must carefully watch as this legislation is implemented.
  First, Congress must be cognizant of the fiscal impact of this bill 
and its long term effect on Medicare and our

[[Page S15735]]

Federal budget. The Congressional Budget Office estimates that this 
legislation will cost the taxpayers approximately $400 billion over the 
next 10 years. Over the next few years we must closely watch the 
implementation of this new benefit to ensure that the program's costs 
do not explode exponentially beyond the CBO estimate. To do so would 
leave a tremendously unfair burden on America's younger generations.
  Next, we in Congress must pay close attention to the possible 
unintended consequences of this legislation. Almost \1/3\ of all 
seniors currently have retiree employer-sponsored prescription drug 
coverage. However, due to rising health care costs, more and more 
employers are dropping retiree health coverage. This legislation will 
provide a solid fall-back plan for those seniors who lose their retiree 
coverage due to rising costs.
  In crafting this legislation, though, we were mindful of the prospect 
that the mere existence of a Medicare prescription drug benefit might 
somehow encourage companies to drop their retiree prescription drug 
plan. This is certainly not our intention, and the legislation provides 
important Federal incentives to employers who offer good retiree 
prescription drug coverage. Nevertheless, we in Congress must provide 
strong oversight to ensure that this legislation does not have the 
unintended effect of actually causing retirees to lose existing 
employer-sponsored coverage.
  Finally, I regret that the bill before us today includes provisions 
that would sharply cut Medicare funding for cancer care provided to 
Medicare beneficiaries. After the Senate passed Medicare bill included 
a $16 billion cancer care cut, I fought hard with Senator Sam Brownback 
and Senator Bill Nelson to ensure that the final bill contained little 
or no such cut. Together, we garnered the support of 53 U.S. Senators. 
Ultimately, though, the Conference Report to H.R. 1 cuts reimbursement 
for cancer treatment by approximately $11 billion over the next 10 
years.
  Proponents of this cut claim that it is needed so that cancer 
treatment reimbursement more accurately reflects the true cost to the 
physician. On the other hand, the hundreds and hundreds of cancer 
patients and oncologists who communicated with me on this issue 
maintain that these cuts will be devastating to cancer care in this 
country.
  I remain committed to working with my fellow Virginians and others in 
the Senate to ensure that cancer patients are not negatively affected 
by these provisions.
  In closing Mr. President, the bill before us today is the product of 
a number of years of hard work by a lot of people in the Congress. It 
presents the best opportunity we have ever had in the Congress to 
update the Medicare program with a prescription drug benefit.
  While I do have some serious concerns about certain provisions in the 
bill--on balance--I firmly believe voting for this bill is the right 
thing to do.
  I look forward to this bill becoming law but remain cognizant of the 
need for the U.S. Congress to closely monitor the implementation of 
this legislation.
  The PRESIDING OFFICER. The Senator from Washington is recognized.
  Ms. CANTWELL. Mr. President, I rise at this late hour to add my voice 
in opposition to the legislation that I believe we will be voting on 
later tonight or early tomorrow morning and to basically explain that I 
think under this bill, my constituents in Washington State, who would 
benefit from a prescription drug benefit, or are currently benefiting 
from something, will be worse off after this legislation than if we did 
nothing at all.
  That is the important point for us to discuss today. Going home to 
Washington State over the summer, and in September and in October, the 
voices of Washingtonians basically said we would like to see a 
prescription drug benefit. Actually, first, they said we would like to 
see a reduction in the cost of prescription drugs, whether you have a 
benefit or not. Those who have insurance now are seeing increases in 
the rates of prescription drugs and cannot afford the continual 
increase in pricing. I am going to talk about that in a minute. They 
also said that if you can get a prescription drug benefit, go ahead, 
but certainly don't do harm by passing something that puts seniors 
worse off than they currently are.
  While I voted for the bill that came out of the Senate, I think this 
conference report is far off from where we need to go. My colleague 
from Virginia, who just spoke, talked about the physician reimbursement 
rate and hospital reimbursement rate, for which I applaud the 
committee. I point out that the reimbursement rate for Medicare 
patients that is still within this framework of a national average has 
Washington State at the very low end. In fact, I think we went from 
41st in the Nation to 45th in the reimbursement rate. As a place where 
we want people to come and provide health care benefits, they are 
certainly not incentivized under this legislation to want to come to 
Washington when they can practice in other regions and make more money. 
I think some of the failures of this bill far outweigh the strengths of 
the legislation.
  I may come at this differently than my colleagues who want to, as I 
say, privatize Medicare. I certainly believe we have made a promise 
since 1965 that we would provide a universal benefit of Medicare, 
provide basic care to our seniors. I think this bill is a failure to 
expand on that and put a prescription drug under Medicare.
  When the Harvard School of Public Health did a study in June of 2002, 
they asked people: If you retired and you had a choice to get a benefit 
under the Medicare health insurance program or from a private plan, 
such as a PPO or HMO, which would you choose? And 63 percent said they 
wanted a program under Medicare. Only 19 percent said they wanted a 
plan under a private provider, a PPO or HMO organization. So I think 
the public is clear that they have said they trust Medicare.
  In fact, I found great pleasure recently when the Seattle Post-
Intelligencer characterized this debate, I thought, in an editorial 
cartoon that was really right on the spot:

       Two constituents obviously are saying to each other, honey, 
     see, the Republicans--what they promised is that we would get 
     out of the faceless control of the Government bureaucrats on 
     Medicare.

  Unbeknownst to the couple, they are sitting in the faceless hands of 
insurance company executives. I think that is fundamentally what is 
wrong with this legislation, that while we have had a trusted system 
for many years and an increase in the cost of prescription drugs going 
from maybe 5 percent of your health care costs at the time Medicare was 
introduced to now something like 25 percent of your health care costs, 
Medicare prescription drug benefits should just be part of basic care 
under Medicare. Instead, we are saying we are going to subsidize 
insurance companies to somehow provide a prescription drug benefit for 
you. I think what we are going to find is that it is going to have 
disastrous results.
  There are a lot of things in this legislation about which I think 
people in the State of Washington are concerned. Obviously, this 
particular debate, as the New York Times called it today, is really a 
debate--I ask unanimous consent that this article be printed in the 
Record, entitled ``Medicare Debate Turns to Pricing of Drug Benefits.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Nov. 24, 2003]

           Medicare Debate Turns to Pricing of Drug Benefits

                            (By Robert Pear)

       Washington, Nov. 23.--With Congress poised for final action 
     on a major Medicare bill this week, some of the fiercest 
     debate is focused on a section of the bill that prohibits the 
     government from negotiating lower drug prices for the 40 
     million people on Medicare.
       That provision epitomizes much of the bill, which relies on 
     insurance companies and private health plans to manage the 
     new drug benefit. They could negotiate with drug companies, 
     but the government, with much greater purchasing power, would 
     be forbidden to do so.
       Supporters of the provision say it is necessary to prevent 
     the government from imposing price controls that could stifle 
     innovation in the pharmaceutical industry. Critics say the 
     restriction would force the government and Medicare 
     beneficiaries to spend much more for drugs than they should.
       The House passed the Medicare bill on Saturday by a vote of 
     200 to 215, after an all-night session and an extraordinary 
     three-hour roll call. President Bush and House Republican 
     leaders persuaded a few wayward conservatives to vote for the 
     bill, which calls for the biggest expansion of Medicare since 
     its creation in 1965.

[[Page S15736]]

       In the Senate, debate continued on Sunday, with Democrats 
     asserting that the bill would severely undermine the 
     traditional Medicare program. Senator Edward M. Kennedy, 
     Democrat of Massachusetts, said he would lead a filibuster 
     against the measure.
       Democrats acknowledged they did not have the votes to 
     sustain a filibuster. But they said they would use points of 
     order to slow the legislation, whose passage is a priority 
     for President Bush.
       Senators Dianne Feinstein of California, Ron Wyden of 
     Oregon, and Kent Conrad of North Dakota, all Democrats, 
     announced on Sunday that they would vote for the bill. Other 
     Democratic senators who have endorsed it include Max Baucus 
     of Montana, John B. Breaux and Mary L. Landrieu of Louisiana, 
     Blanche Lincoln of Arkansas and Ben Nelson of Nebraska.
       But Senator Don Nickles, Republican of Oklahoma, said he 
     would vote against the $400 billion bill.
       ``We are building a new expansion onto a house that's 
     teetering on a cliff,'' Mr. Nickles said. ``We are saddling 
     future generations with enormous liabilities.''
       No provision has been mentioned more often in Congressional 
     debate than the section that prohibits the government from 
     interfering in negotiations with drug companies.
       Democrats have repeatedly asserted that Medicare could 
     provide more generous drug benefits if, like other big 
     buyers, it took advantage of its market power to secure large 
     discounts.
       But many Republicans have expressed alarm at the 
     possibility that federal officials might negotiate drug 
     prices. The Medicare program, they say, dwarfs other 
     purchasers, and the government is unlike other customers 
     because it could give itself the power to set prices by 
     statute or regulation, just as it sets the rates paid to 
     doctors and hospitals for treating Medicare patients.
       Under the bill, the government would subsidize a new type 
     of insurance policy known as a prescription drug plan.
       ``In order to promote competition,'' the bill says, the 
     secretary of health and human services ``may not interfere 
     with the negotiations between drug manufacturers and 
     pharmacies and prescription drug plan sponsors, and may not 
     require a particular formulary or institute a price structure 
     for the reimbursement'' of drugs.
       Tommy G. Thompson, the secretary of health and human 
     services, said Sunday that if Congress wanted to give him the 
     power to negotiate drug prices, it could do so next year. But 
     ``that's not a reason to oppose this Medicare bill,'' said 
     Mr. Thompson, who negotiated with Bayer to obtain a lower 
     price for the company's anthrax medicine, the antibiotic 
     Cipro, in 2001.
       Representative Tom Allen, Democrat of Maine, said it struck 
     him as absurd that ``the government will not be able to 
     negotiate lower prices'' for the drugs on which it plans to 
     spend $400 billion in the next decade.
       ``The bill will allow the pharmaceutical industry to 
     continue charging America's seniors the highest prices in the 
     world,'' Mr. Allen said.
       Representative Peter A. DeFazio, Democrat of Oregon, said, 
     ``We could provide a much more meaningful benefit if we 
     negotiated lower prices as other nations have done.''
       Representative Rahm Emanuel, Democrat of Illinois, said: 
     ``We could bring down drug prices if we allowed the secretary 
     of health and human services to negotiate on behalf of 40 
     million seniors. That is what Sam's Club does.''
       Sam's Club, a chain of warehouse stores that is a division 
     of Wal-Mart, acts like a purchasing agent for its members, 
     who can buy low-price goods.
       Republicans say that health plans will be able to negotiate 
     lower drug prices for Medicare beneficiaries, just as they do 
     for large groups of employees with private insurance.
       The Senate majority leader, Bill Frist, Republican of 
     Tennessee, said: ``We tend to use the purchasing power of 
     private entities like individual plans to hold down costs 
     over time. The Democrats tend to emphasize, and thus push 
     for, more government control, government purchasing. We just 
     think that competition through the private sector, through 
     bulk purchasing and negotiation, is a more effective means to 
     hold down prices.;;
       Medicare drug plans would be offered by state-licensed 
     insurance companies. They, in turn, could hire pharmacy 
     benefit managers like Express Scripts, Medco Health Solutions 
     and AdvancePCS to negotiate with drug makers, issue discount 
     cards and line up networks of pharmacies.
       The bill would also create a benefit: an initial physical 
     examination offered to new beneficiaries as a ``welcome to 
     Medicare.'' this benefit illustrates a shift toward greater 
     coverage for preventive services.
       Under the bill, Medicare would cover screenings for heart 
     disease and diabetes and would pay experts to coordinate care 
     for elderly people with chronic illnesses.
       Senator John Kerry, Democrat of Massachusetts, took time 
     out from his presidential campaign to join the Senate debate. 
     The Medicare bill, he said, ``lines the pockets of powerful 
     moneyed interests and leaves America's seniors out in the 
     cold.''
       But Senator Susan Collins, Republican of Maine, urged 
     support for the bill. ``This historic opportunity may never 
     come again, and we cannot afford to let it pass,'' she said.

  Ms. CANTWELL. In this article, I will read the paragraph:

       With Congress poised for final action on a major Medicare 
     bill this week, some of the fiercest debate is focused on a 
     section of the bill that prohibits the government from 
     negotiating lower drug prices for the 40 million people on 
     Medicare.

  That particular article goes on to talk about the fact that we are 
switching over to insurance companies when we could have a benefit 
under Medicare and when Medicare could provide those cost savings as a 
big market.
  Now, some people say: Gee, we don't want to set price controls 
because that will somehow artificially impact pharmaceutical companies. 
Pharmaceutical companies are not the people who need the financing and 
the access to capital.
  It is the biotech industry. Washington State happens to be home to 
many biotech companies. They need access to capital. It is one of the 
actual advantages of what I would call economic advantage that the 
United States has in making pharmaceutical drugs; the fact that our 
access to the capital system allows these biotech companies to do years 
and years of research and then maybe 10 to 15 years later actually 
getting a drug produced. So they need access to the capital market.
  Once those drugs are created, we need to do something about 
controlling the costs of those drugs. This section of the bill, again 
referring to the New York Times article, says:

       The provision epitomizes much of the bill, which relies on 
     insurance companies and private health plans to manage the 
     drug benefit. They could negotiate with drug companies, but 
     the government, with much greater purchasing power, would be 
     forbidden to do so.

  I have great concerns about what is the basic hamstringing of this 
proposal as it relates to prescription drug benefits when the key 
opportunity before us would be to put this benefit under Medicare and 
capitalize on those savings.
  Mr. President, that is why I had supported earlier legislation and 
find it very difficult to support this legislation. I am going to talk 
about why, besides this particular provision, we are hampering 
ourselves from having other price controls in this legislation.
  I agree with my colleagues on the other side of the aisle, as we 
start this new benefit, we must be cognizant of what kind of cost 
measures we can do to make sure we continue to provide this for our 
citizens. Before I get to that, I want to mention, I have great 
concerns about the retiree benefit plans under this proposal. We have 
about 49,000 retirees in Washington State who might end up losing their 
coverage under this bill in the future. They have good, solid insurance 
coverage plans that I don't think are too generous, but under this 
proposal they might go away.
  There is a certain percentage of the population under this proposal 
that actually will start paying a variety of premiums based on income, 
and while some people think that might be a good idea, really these 
people have been in this program--it has been a program based on a 
payroll tax into the Medicare trust fund--they have paid into the trust 
fund expecting to get reliable health insurance coverage back. Now they 
are going to be paying aggressively on their premiums.
  About 51,000 residents in Washington State are going to wake up very 
much surprised to find that as a result of trying to provide a drug 
benefit package to the country, all of a sudden they are paying more on 
their Medicare Part B program. I know my phone is ringing very much 
against this legislation, but I don't know if those 51,000 people 
realize it is actually their premium rates that are going to go up.
  Third, I think the legislation, as it relates to low-income seniors, 
is another area where we are leaving seniors basically worse off than 
they are today. My State covers 150 percent of the poverty level under 
Medicaid with a prescription drug benefit. The lowest income seniors in 
America are now going to have to pay a copayment.
  One of the reasons we created the program at 100 percent of poverty 
for people on Medicaid is so they can get access to prescription drugs 
because they couldn't afford a program to pay for prescription drugs. 
We are taking the poorest of our population and now demanding that they 
have a copayment, too.
  The asset test--I am sure some of my colleagues will talk about 
that--for

[[Page S15737]]

those at 150 percent of the poverty level, which is basically incomes 
of about $13,000 per individual or $18,000 for a family of two, that 
the asset test is going to be $6,000 for the individual or $9,000 for a 
couple, that means after that, you are not going to benefit from the 
program in the same way.
  Basically, you are limiting the opportunity for this section of low-
income individuals to benefit from what would be a more profitable way 
of dealing with a prescription drug benefit and giving them, not 
hampering them, saying you qualify but limiting them on the asset test.
  In Washington State, for those individuals below 150 percent of 
poverty level, they are going to be worse off under this legislation.

  I hope this legislation is not a death knell for those who are living 
with cancer because according to the CBO estimates, this bill could 
basically cut $11.5 billion over the next 10 years for cancer care 
communities because of the reimbursement rate for cancer care. 
Basically, we are making cuts to programs, and I have heard from 
facilities, oncologists, and cancer patients all across the State that 
they are very upset with this legislation and the reduction in 
reimbursements for cancer patients. This is another group of people who 
will be worse off if this legislation passes.
  As I said, my primary concern with this legislation is it does very 
little to rein in the cost of prescription drugs. Talking to my 
constituents, yes, they would like to see a prescription drug benefit, 
but they don't want to be worse off than they are today. Even without 
the benefit, they expect the Senate to do something about controlling 
prescription drug costs.
  What have we done? I see my colleague from Michigan on the Senate 
floor. She had a great proposal that we failed to execute that 
basically said: Why not cap the advertising dollars of the 
pharmaceutical companies to the dollars that are involved in research 
and development; that way, they are doing research and development on 
new drugs. They are not overspending, overadvertising to America, or at 
least not getting a tax benefit for overadvertising and trying to drive 
up the consumption of drugs.
  We have done nothing about that. My colleague from New York and 
others have tried to address the issue of what has become evergreening 
of patents where drug companies actually change the name or some 
feature of the product just so they can continue to have a patent 
control and generic drugs, cheaper drugs, cannot come to the market.
  This bill actually deals with some aspect of that, but the aspect I 
was very concerned about is oftentimes you have big pharmaceutical 
companies buying a generic drug company right before the generic drug 
company produces the product. That ought to be investigated by the 
Department of Justice as an antitrust violation and to make sure we are 
not allowing such collusive activities to happen, thereby raising the 
overall price of prescription drugs.
  A provision that would have benefited us the most and was critically 
important--again, as we see insurance companies, basically, in charge 
of prescription drug benefits--is we had a great opportunity in an 
amendment I offered with several of my colleagues to control the costs 
as it was put forth by pharmacy benefit managers.
  In traveling around Washington State, actually a summer ago, it 
became very clear to me that a great deal of purchasing of 
pharmaceutical drugs for individual plans were done by pharmacy benefit 
managers. They are the middlemen in this process, and pharmacy benefit 
managers often negotiate huge savings for various employee groups, 
companies, and organizations. Yet it is unclear what happens to the 
negotiated discount. Is it passed on to the individuals within the 
beneficiaries of that plan? Is it basically profit by the pharmacy 
benefit managers? What happens to that money? In fact, we have had 
instances in this country where pharmaceutical companies and the 
pharmacy benefit managing company are owned by the same entity. Thereby 
the middleman is basically helping to negotiate and sell a higher price 
for the pharmaceutical company.

  Most of those companies have gotten out of that. Certainly my 
amendment would have prohibited pharmaceutical companies and benefit 
managers from working together under the same ownership. But a recent 
September 9, 2003 study by Loyola University Chicago Law School found 
that the cost to taxpayers for this inherent conflict of pharmacy 
benefit managers is in the range of somewhere between $14 billion and 
$29 billion over the next 10 years. I think that is quite considerable.
  To me, putting HMOs in charge of the prescription drug benefit is 
like putting Enron in charge of our energy policy. Thank God we were 
able to make some comment and statements that we are not going to have 
that energy policy of the free market without rules and transparency 
which basically drove up the cost of energy pricing. But that is what 
we have here because basically we are saying Government can't do 
anything to control the prices.
  But now we are going to throw this into the private sector, and it is 
unclear what rules they are going to use to control the prices. The one 
amendment that was in this legislation saying that pharmacy benefit 
managers had to come clean about the drug benefits they negotiated with 
pharmaceutical companies, and what percentage of those dollars they 
were passing on to consumers--that got thrown out of the legislation.
  So a key aspect of this bill, which would have said let's provide 
transparency, let's give money back to seniors, let's make sure 
consumers are getting the savings that are being passed on by being in 
a big market and having market leverage--those things are gone.
  I believe our Attorney General of the United States ought to 
investigate. I don't see why the manufacturers of pharmaceuticals, that 
then sell through a PBM, can't list the top volume of 50 drugs they 
have sold and the difference between the prices they received at the 
pharmacy level and what discounts were realized. They don't have to 
give all of their pricing information. They don't have to overexpose 
what I think would be private corporate information that allows them to 
be competitive. But the Department of Justice ought to be able to 
investigate collusive activity that is ripping off seniors in America, 
when somebody negotiates huge discounts based on volume but then 
doesn't pass those discounts on to consumers.
  So, as I said, this is a key part of the legislation that was left 
out. I hope whatever happens with the outcome of this legislation, that 
my colleagues will think about how we need to rein in pharmacy benefit 
managers in the future and make sure they are passing on savings to 
consumers.
  As I said, I think this private delivery model we are talking about 
for Medicare gives too much control over to the insurance agencies and 
other organizations and doesn't give a guarantee to seniors. This bill 
provides no limits on the premiums that drug-only plans can charge.
  Seniors need a comprehensive benefit that covers their total 
prescription benefit needs. Why tease them with a program that we are 
somehow going to cover their prescription benefits and then not control 
the price, have it in the private sector, and then have the private 
sector dictate to them: Here is the very limited number of drugs that 
are going to be provided.
  Thirty percent of Washington State seniors enrolled in the 
prescription drug benefit under this program would fall into what is 
the donut hole. Easily some 122,000 people in my State could fall into 
the donut hole. Again, another percentage of the population that I 
don't think are--you might not say they are better off. It depends on 
whether they have a drug benefit now. But they are certainly not going 
to get anything from this legislation and they are going to be far more 
confused about why this cliff starts at a certain level.
  Again, my colleagues, I am sure, have talked about the economic 
impact of this legislation. I would go back, saying we should start 
with a prescription drug benefit.

  When my colleague, the Senator from Michigan, and I first came into 
this Congress, when we had a huge surplus, that was the time we should 
have put forth a prescription drug benefit that would have been a more 
comprehensive package and started this process. But we didn't do that.
  So what my constituents are telling me, and these are even 
constituents

[[Page S15738]]

living in the rural part of Washington State who might think their 
physicians will get a higher reimbursement rate or their hospitals will 
get a higher rate, they will know Washington will still fall behind on 
the overall Medicare reimbursement rate, falling from 41 in the Nation 
in reimbursement rate to 45. They will know either the lowest-income 
seniors who are going to fall out of the program and have to have 
copayments--that is, they are already under a plan that they don't have 
copayments on--or there will be some of these seniors who basically end 
up having to pay more than they are paying today.
  As we debate this legislation and look forward to whether, as I said, 
the vote is tonight or tomorrow, I think we need to talk about whether 
we are going to trust the American people in their trust of Medicare; 
whether we are going to say we are going to let the Medicare market 
carry the weight that it has already carried. Actually, even if we 
said, Here is the limit of how much we could provide given our budget 
deficit, I would say: Fine, continue to let Medicare provide for those 
individuals. As we give more resources as a nation, let's build that 
up.
  But don't fool America by somehow thinking you are going to turn this 
over to private insurance companies and HMOs and somehow they are 
magically going to come up with the money to make this benefit program 
work.
  What Americans want is security in their prescription drug benefits. 
They don't think that privatization will work. They don't think we are 
doing enough to control costs. I suggest to my colleagues that we need 
to go back and work this bill to provide both--the certainty to 
seniors, in a program that they have believed in for many years, and a 
Congress that will stand up and fight the ever increasing cost of 
prescription drugs.
  I yield the floor to my colleague from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan.
  Ms. STABENOW. Mr. President, first, I thank my friend and colleague 
from the State of Washington for her eloquence this evening in laying 
out where this is not a good deal for seniors. We wish it was a good 
deal for seniors. Both of us have been here since 2001, speaking in the 
Chamber frequently about the need to provide prescription drug coverage 
for seniors, real coverage, and about the need to lower prices for 
everybody.
  In fact, I have been working on senior issues for a long time. 
Actually that was the very first opportunity I had to get involved in 
public service. I won't say when, but it was about 25 years ago. I came 
into county government, which is a part-time position in Michigan. But 
what brought me into the Ingham County Board of Commissioners was the 
issue of senior citizen health care. I have been involved in that issue 
ever since.
  Nothing would please me more than to be able to stand on the floor 
this evening and say: We did it. We have put together a voluntary, 
comprehensive prescription drug benefit under Medicare for seniors and 
the disabled. Nothing would please me more. And nothing would please me 
more than to say: We did it. We have put in place the ability to lower 
prices for everyone.
  As colleagues have said, this is not just about Medicare and just 
about our seniors and the disabled--although certainly they are very 
important people. They use the majority of the prescription drugs. But 
we know right now the explosion in prices of prescription drugs is 
driving the entire cost of the health care system.
  When I talk to those who are in the auto industry, or when I talk to 
small businesses, when I talk to those who are in the furniture 
business in Michigan, or in retail sales or work in State government, I 
hear the same thing, which is at least half the cost increases in 
health care are a result of the explosion in prescription drug prices.
  So this is an issue that affects everybody. As we look at this 
question under Medicare, this is also an issue that affects everyone, 
every taxpayer as well as every person who is paying for Medicare. So 
this is a big deal. It is important that we get this right. It is 
important that we be able, at the end of the day, to say we have 
strengthened one of the great American success stories called 
Medicare, and that we have put in place the competition and the 
accountability to bring prices down. This bill absolutely does not do 
that. It doesn't do either one of those things.

  First of all, it starts from the premise that seniors want something 
other than traditional Medicare. When we look at what seniors have said 
when they have had a choice, here is what they said. Eighty-nine 
percent of those who have a choice right now between Medicare+Choice, 
which is an HMO, private insurance, or traditional Medicare, 89 percent 
said: We will take traditional Medicare. Eleven percent said: We will 
take the private insurance.
  Seniors have already said what choice they want. When I hear folks 
talking about what they want in Medicare, they are not asking for more 
bureaucracy, or more insurance paperwork, or more insurance companies 
to choose from. They just want to update Medicare for prescription 
drugs, that is all--just update Medicare for prescription drugs. 
Eighty-nine percent of the Medicare beneficiaries have already told us 
what they want to do. They want traditional Medicare.
  This bill basically sets in place--some of it is immediate with 
prescription drug coverage where you have to choose from private 
insurance plans if they are in your area, and some of it is down the 
road a bit in 2010 when the entire unraveling of Medicare begins. In 
some areas, people will have a very different system that will attempt 
to move them into private insurance.
  That is not what folks have said to me. People say we should do that 
because it costs less. Medicare is in trouble financially down the 
road. We need to do something to lower costs.
  When you look at this, Medicare costs about 2 percent to administer 
and private HMOs cost 15 percent. So that can't be the reason we are 
doing this. It costs more to go into private plans than it does with 
traditional Medicare.
  For many of the reasons colleagues said on the floor, traditional 
Medicare has a very large insurance pool--those who are sick, those who 
are well, those who are older, those who are younger, all together--the 
bigger the pool, the bigger the risk pool, the lower the price.
  It is not because it would cost less, because it doesn't cost less; 
it will cost us more. It will cost taxpayers more. It costs more for 
services under the private sector than it does under traditional 
Medicare.
  Why are we doing this? I think we are doing this for one reason: 
Unfortunately, the driving reason behind this legislation is that the 
pharmaceutical lobby has decided, instead of continuing to fight 
Medicare coverage and the Medicare prescription drug benefit as they 
have done for many years--they decided they don't want to stop it 
anymore because it is too big an issue for people. It is a critical 
life-and-death issue in order to pay for your medicine. That is not to 
say people got up today and decided to eat or get their medicine. That 
is not rhetoric; it is real. So they changed their approach and thought 
they couldn't stop it anymore because it is too real for people: This 
is a real problem. Let us create a benefit that is done in a way that 
divides people up into private insurance plans and in a way that 
doesn't allow Medicare to use all of its leverage to be able to lower 
prices.
  So behind all of this, there are I think two things. There are those 
who really do believe it ought to be done in the private sector, that 
we ought to go back to private insurance. But you couple that with an 
industry that wants to make sure that: No matter what, we can't lower 
their prices; let us make sure that no matter what, people have to pay 
the highest prices.

  That is why there is no reimportation, which is really important in 
my State. The idea that you can have a local pharmacist in Michigan be 
able to do business with a pharmacist in Canada, be able to bring 
prescription drugs back into the local pharmacy in Michigan at half the 
price, many of them made in the United States, they are safe, they are 
FDA approved, bring them back, and create a way to lower prices--they 
don't want that. That is not in the bill. They do not want a strong 
provision to tighten patent loopholes so competitors can be able to get 
into the marketplace with generic drugs. That is not in the bill.
  We have a weakened version of that. Amazingly, as colleagues have 
said,

[[Page S15739]]

they were actually able to get language into the bill that says 
Medicare is prohibited from group purchasing on behalf of seniors and 
the disabled. It is amazing. That is just amazing. The private 
insurance companies can try to get the best price. Everybody else can 
try to get the best price. But Medicare on behalf of our seniors is 
prohibited from trying to get the best price.
  That would only be in the bill for one reason; that is, because the 
industry has been successful in creating a whole new group of customers 
who will be forced to pay the highest possible price.
  How do we know this? This is not just me talking. The Boston 
University School of Health has looked at this legislation and 
estimates there will be $139 billion in increased profits over the next 
8 years for the world's most profitable industry. At $17 billion 
annually, this means about a 38 percent rise in drugmaker profits.
  I am all for folks making a profit. I have a major pharmaceutical 
company in Michigan. They do wonderful research. I am very proud of 
them for doing this research. But we are talking about an industry that 
is already one of the most heavily subsidized by taxpayers, because 
they do not make shoes, or chairs, or cars, they make lifesaving 
medicine. We want them to make it. We want them to do research. So we 
help them pay for it. We give them protection. We have patent 
protection so that they are protected from competition. We give them 
the ability to write off their research and write off their 
advertising. They get a lot of support and help. Why? Because we want 
to be able to afford the product.
  At the end of the day, when, by the way, they are spending 2\1/2\ 
times more on advertising and marketing and administration rather than 
research, which is a big concern of mine, but at end of the day we are 
seeing not prices going down so people can afford them but efforts to 
actually protect prices and allow them to go up.
  We are looking at about a 38 percent rise in drugmaker profits. 
Certainly any business would welcome that. But that is on the backs of 
American citizens. This is on the backs of American taxpayers who are 
paying the bill--American seniors who just want to know that they can 
count on Medicare, get the medicine they need, pick their own doctor, 
live a healthy life, and visit grandkids and great grandkids. They 
trust us to look beyond the 650 lobbyists, or however many there are in 
the drug industry now. I know it is over six lobbyists for every one 
Member of the Senate. Imagine, more than six lobbyists for the drug 
companies for every Member of Congress. They are counting on the Senate 
to look beyond the swarm and to look at what they need. They are 
counting on us to look at what they are asking for.

  I know at the end of the day it is our obligation and responsibility 
to make sure we put together something that actually helps people get 
their medicine at affordable prices, is responsive to the taxpayers of 
this country, and is something that protects one of the great American 
success stories called Medicare.
  The No. 1 reason I am opposing this legislation, there is nothing in 
here to lower prices for anyone. Profits will continue to go up and 
they are locked in. This legislation sanctions that.
  Second, we are putting into place a system that will unravel by 
privatizing Medicare, or will allow Medicare to wither on the vine as 
former Speaker Newt Gingrich said. It took a while. He said that in 
1995 and here we are in 2003 with a bill that does that.
  It does a couple of other things that make no sense to me. I would 
assume that the first rule would be: do no harm. Yet under this 
legislation, it is estimated that over and above what is happening 
right now in the marketplace, 2.7 million retirees will lose their 
coverage, people with private coverage. That is one in four. That means 
three out of four employers will wrap around and keep the coverage 
going, but one out of four, which is too high--we could make that zero 
if we wanted to, if we had legislation I cosponsored a year ago that 
made it--but right now one out of four in this bill are estimated to 
lose their private retiree coverage.
  My guess is a lot of those folks gave up pay increases over the years 
to get good coverage, gave up other things so in their retirement they 
would have private coverage.
  On top of keeping prices high and unraveling Medicare, it is 
estimated by a study group that 143,000 people in the State of Michigan 
would lose their private coverage. I don't know how in the world I can 
support that. And I will not.
  The last thing this does, there are 6.4 million low-income seniors 
and disabled who will lose access to the drugs they need. Many of them 
will actually pay more. How in the world does it make any sense that we 
would have a prescription drug benefit that has been described as 
helping our low-income seniors the most, but actually costs people more 
out of pocket, people who are currently on Medicaid, who find 
themselves under Medicare with a different system, a different asset 
test, different copays, and would actually pay more.
  We should be focusing on and helping the people who really are 
choosing every day whether or not to eat or get their medicine or pay 
the electric bill.
  When we look at this whole picture, as much as I would love to say 
this is a great deal, this is a bad deal. My colleagues say this is a 
first step. There is an old saying: Beware of the first step. I think 
the first step is right off the cliff on this legislation for too many 
people.
  In closing, there is one important piece in this bill that has strong 
if not unanimous bipartisan support that I wish we were passing 
separately this evening. That is the issue I have talked about a number 
of times: what is happening to our doctors, our hospitals, our home 
health agencies, nursing homes, and others who have been cut 
consistently in the reimbursements they receive, whether they be rural 
or urban providers.

  Those who care for our seniors and the disabled have seen resources 
cut. That, in turn, is cutting access. We have known that cuts were 
coming now for the last 3 years, and instead of doing something about 
it sooner because our doctors and other providers desperately needed us 
to, it gets rolled into this legislation that is highly controversial. 
I regret that. I have offered separate legislation pulling out all of 
these provisions. I offered it on Saturday, and I asked unanimous 
consent we take it up immediately and pass it. It was objected to on 
the other side. I regret that, as well.
  The reality is, in the middle of this bill I believe there are some 
very important providers being held hostage, folks I want to support, 
whom I have supported, and I will support in the future; folks for whom 
I have fought, and unfortunately because of the fact that this is in 
the middle of this bill to unravel Medicare and hurt them in the long 
run and increase cuts in the long run for all of them, I am not going 
to be able to support this bill. However, I do want the record to 
reflect that our doctors and hospitals and others who have been cut too 
much are cancer care providers. They are still cut too much in this 
legislation. I am extremely upset that is the case.
  But we do have in this bill provisions for rural hospitals, urban 
hospitals, and others that are desperately needed. I am at least 
pleased there are provisions there recognizing the desperate needs our 
providers feel.
  In conclusion, when we look at the broad bill before the Senate that 
unravels Medicare, keeps prices high, causes people to lose their 
health insurance in the private sector, and causes the most vulnerable 
seniors to pay more, this is a bad deal. I am hopeful, still, that 
those listening this evening will call their Members before the vote 
that I believe is coming tomorrow morning. Tell the Members to go back 
to the drawing board. We can do better than this for people. I am still 
very hopeful this will be stopped and we will get back to the drawing 
board and get it right.


                              Section 641

  Mr. CONRAD. Mr. President, I want to thank Senator Grassley and 
Senator Baucus for all of their work on this bill. Prescription drug 
coverage under Medicare is long overdue, and I am pleased that we are 
near to final passage on a drug benefit that will provide our seniors 
and disabled with help they sorely need. That we have made it this far 
is in no small measure to the important work of Senators Grassley and 
Baucus.

[[Page S15740]]

  As we continue to debate the Medicare conference report, I want to 
make particular note of the efforts of Senators Baucus, Grassley and 
Murray to address the Medicare bias against self injectable biologics 
and oral anti-cancer drugs without an injectable equivalent. These 
biases can mean that Medicare pays for treatments that are more costly 
and that require patients to travel long distances for treatment. 
Working together, we have pushed hard for providing coverage of these 
drugs for an interim period, until the Part D drug benefit begins. This 
immediate coverage would make a real difference for thousands of 
seniors suffering from cancer as well as various chronic illnesses, 
such as rheumatoid arthritis and multiple sclerosis.
  While I am pleased that the Medicare conference includes measures to 
provide coverage of these medications over the next 2 years, I am 
disappointed that the funding for this policy was limited and the 
number of beneficiaries who will be allowed to benefit from this 
coverage was capped. Also, I am very concerned that the Medicare 
conference report language does not accurately reflect the intent of 
the conferees, which is clearly laid out in the statute of the 
conference report. I would like to ask my colleagues to comment further 
on this issue.
  Mrs. MURRAY. I also want to thank Senators Baucus and Grassley for 
their support of the Conrad-Murray language that would have eliminated 
this discrimination against self-injected biologics. Our amendment 
would reward companies who innovate their treatments to meet their 
patients needs, not Medicare reimbursement policies. Many of these 
patients suffer from rheumatoid arthritis and MS, two disabling 
conditions that can restrict mobility and make it very difficult to 
even get to a physician's office. As my colleagues know, I have spent 
the last 4 years working to end this outrageous disincentive in 
Medicare reimbursement policies.
  Mr. BAUCUS. It is important to note that without Senator Murray's 
efforts and leadership on this issue, we would not be here today. I 
also thank the Senator from North Dakota for all that he has done to 
realize this important benefit. And I thank both Senators, as well as 
the chairman, for working with me to level a Medicare reimbursement 
playing field that has long been biased against rural patients and 
providers. We have the most comprehensive rural health package in 
history in this bill, and I am proud of that.
  With respect to self-injectable biologics and oral anti-cancer 
medications, let me provide some background. Under current law, 
Medicare will cover certain drugs that are administered ``incident to 
physicians' services.'' but self-injectable biologics which are 
complete replacements for physician administered drugs are not covered 
by Medicare. In other words, if a doctor is required to inject the 
drug, you're covered. If not, you're out of luck.
  A similar situation exists for oral anti-cancer medications. Coverage 
is available for oral anti-cancer drugs if they are also available in 
injectable form. But Medicare coverage is denied for anticancer 
therapies that are available in oral form only. Many new therapies to 
treat cancer, as well as many that are in various stages of development 
and approval, are available only in oral form, and therefore are not 
covered under the Medicare program.
  Mr. GRASSLEY. I thank my friend from Montana for that explanation. 
And as he and the Senators from Washington and North Dakota know, we 
have a demonstration program in this bill that covers, until the Part D 
drug benefit starts in 2006, self-injectable and oral anti-cancer 
drugs. This demonstration program is in the statutory language. That is 
good news. However, the report language is clearly in error and refers 
to an entirely different provision, not the one we negotiated.
  Mr. BAUCUS. That is right. And for clarification's sake, we would 
like to ask you some questions about this demonstration project. First, 
in negotiations we intended that this demonstration would be available 
and would operate without limitation to the number of States, correct?
  Mr. GRASSLEY. Yes.
  Mrs. MURRAY. Isn't it true that you intended that the demonstration 
ensure that the Secretary preserve physician and beneficiary treatment 
options by providing for equitable coverage of all qualifying products?
  Mr. GRASSLEY. That is correct.
  Mr. CONRAD. Isn't it true that the conference committee intended to 
provide $500 million above what Medicare would have expended absent 
this provision to cover replacement self-injectable medications and 
oral anti-cancer therapies?
  Mr. GRASSLEY. Yes, that is right.
  Mr. BAUCUS. I thank the chairman for the clarification.
  Mr. CONRAD. I also thank the chairman for that clarification and, 
again, would like to thank both the chairman and Senator Baucus for 
their work on this important effort. I also strongly share their view 
that the rural health provisions in the Medicare conference report are 
a real victory for not only our States, but for all of rural America.
  Mrs. MURRAY. I just want to be sure that we provide the greatest 
degree of relief for patients and their families. I was disappointed to 
learn of this error in the final report language, and it does undermine 
the entire negotiations for this provision. It certainly undermines the 
intent of the Conrad-Murray amendment adopted by the Senate during 
consideration of S. 1. I appreciate your working with me to rectify 
that error.


                      Cost Containment Provisions

  Mr. BAUCUS. Mr. President, let me take a few moments to provide some 
background on the cost containment provisions in the Medicare 
conference agreement.
  First, let me review current law.
  Under current law, the Medicare Board of Trustees oversees the 
financial operations of the Medicare Hospital Insurance--or HI--trust 
fund--Medicare Part A--and the Medicare Supplementary Medical 
Insurance--or SMI trust fund--Medicare Part B. The Social Security Act 
requires Medicare's trustees to submit reports to Congress annually by 
March 31.
  Medicare Part A pays for beneficiaries' medical expenses incurred in 
hospitals, skilled nursing facilities, hospices, and a portion of home 
health care services. Payroll taxes provide most HI trust fund 
revenues. Employers and employees each pay 1.45 percent of earnings. 
Self-employed workers pay 2.9 percent of net income. Other sources of 
HI revenue include: interest on trust fund investments, the federal 
income taxes on Social Security benefits raised in 1993, premiums from 
voluntary enrollees into Part A, railroad retirement account transfers 
and reimbursement for certain uninsured persons.
  Medicare Part B pays for physician and other health care practitioner 
services, other medical and health services, including laboratory and 
other diagnostic tests, outpatient hospital services and other clinic 
services, and therapy and ambulance services, durable medical 
equipment, and home health services not covered under Part A. SMI trust 
fund revenues come from beneficiary premiums to purchase Part B and 
general revenues. The Part B premium is set at an amount so that 
aggregate premiums make up about 25 percent of program costs. The 
monthly premium for 2003 is $58.70. General revenues make up the 
remaining 75 percent of Part B program funding.
  Next, let me note current law on Presidential legislation. Under the 
State of the Union Clause--article II, section 3, clause 1--of the 
Constitution, the President has a right to ``recommend to [Congress's] 
Consideration such Measures as he shall judge necessary and 
expedient.'' Thus the President can already submit legislation to 
address Medicare solvency.
  Current law on House procedures is that the House regularly passes 
rules that govern House consideration of particular pieces of 
legislation. The Rules Committee formulates these rules, which the 
House can then adopt by a majority vote. Thus the House can already 
establish such procedures as it deems appropriate to consider Medicare 
legislation.
  And current law with regard to Senate procedures provides that, under 
Senate rule XIV, any single Senator can cause a bill to be placed on 
the calendar.
  Now let me turn to what was in the House-passed bill. Section 131 of 
House bill would require the trustees to submit a report on the status 
of the combined two trust funds and the Prescription Drug Trust Fund. 
The bill would require the report to include a statement of the amounts 
spent on benefits

[[Page S15741]]

in the preceding fiscal year from the general revenues and the 
percentage the Medicare general revenues bore to all other general 
revenue obligations of the Treasury that year. The bill would require 
this information for each year from the beginning of Medicare and for 
10-year and 75-year projections. The bill would also require the report 
to compare the rate of growth of Medicare general revenue funding to 
the rate of growth in the gross domestic product. The bill would 
require the Committees on Ways and Means and Energy and Commerce to 
publish each report and post it on the Internet.
  The Senate-passed bill was quite similar. Section 131 of the Senate 
bill would require the trustees to submit a report on the status of the 
combined two trust funds and the Prescription Drug Trust Account. The 
bill would require the report to include a statement of the amounts 
spent on benefits in the preceding fiscal year from general revenues 
and the percentage that the Medicare general revenues bore to all other 
general revenue obligations of the Treasury that year. The trustees 
would make this calculation separately for Medicare benefits and for 
administrative and other expenses. The bill would require this 
information for each year from the beginning of Medicare and for 10-
year and 50-year projections. The bill would also require the report to 
compare the rate of growth of Medicare benefits and administrative 
costs to the rates of growth in the gross domestic product, health 
insurance costs in the private sector, employment-based health 
insurance costs in the public and private sectors, and other areas as 
determined appropriate by the trustees.
  Section 132 of the Senate bill would require the 2004 reports to 
include an analysis of the total amount of the unfunded obligations of 
Medicare. The analysis would compare long-term obligations, including 
the combined obligations of the HI and SMI trust funds, to the 
dedicated funding sources for the program--not including transfers of 
general revenue.
  With regard to Senate Procedures, the Senate bill would express the 
sense of the Congress that the committees of jurisdiction would hold 
hearings on these reports.
  Now let me turn to the conference agreement before us today. Under 
the conference agreement, the trustees' report would include a 
statement of general revenue funding as a percentage of total Medicare 
spending contributions to the Medicare Program. The report would also 
include a historical overview of general revenue contributions and 
estimates of general revenue contributions in 10 years, 50 years, and 
75 years. The trustees would compare these trends in Medicare funding 
to growth rates for gross domestic product, private health costs, 
public health costs, and other appropriate measures. And the trustees 
would report on the costs of the new drug benefit under Medicare Part 
D.
  The report would also include an analysis of Medicare that assumed 
that general revenue funding would not exceed 45 percent.
  Starting in 2005, the Medicare trustees would annually determine 
whether they projected ``excess general revenue funding'' that is, 
``general revenue funding'' exceeding 45 percent of Medicare outlays 
during the current year or the next 6 years. If the trustees did so 2 
years in a row, it would be a ``Medicare funding warning.''
  Under the conference agreement, ``general revenue Medicare funding'' 
would mean total Medicare outlays minus ``dedicated sources.'' 
``Dedicated sources'' would mean funding received from outside the 
Federal Government, specifically: the HI payroll tax, the income tax 
raised by the 1993 changes in taxation of OASDI benefits, amounts 
States pay to the Federal Government on account of dual-eligibles funds 
collected by the ``claw-back,'' premiums paid by Medicare, and gifts to 
Medicare. The conference agreement would not include interest on trust 
fund assets in ``dedicated sources,'' as Republican conferees viewed 
the general fund as needing to pay these amounts to the trust funds.
  If, for 2 consecutive years of reports, both covering 7-year periods 
of projections, the Medicare Trustees projected that excess general 
revenue funding would be required in any of those 7 years, then the 
Medicare Program would be subject to special procedures and the 
trustees would notify the President and Congress. The special 
procedures would be in force only after the second annual report 
confirmed that excess general revenue funding would be required.
  Here is a plausible example of how the system would work. When 
Medicare's trustees issued their March 31, 2010, report, they would 
examine fiscal years 2010 through 2016. If the trustees projected that 
in 2016, general revenues would exceed 45 percent of Medicare funding, 
then 2010 would be the ``notice'' year. The conference agreement says 
that ``Congress and the President should address the matter under 
existing rules and procedures.''
  When Medicare's trustees issued their March 31, 2011 report, they 
would examine fiscal years 2011 through 2017. If the trustees once 
again projected that in at least one year of those 7 years--for 
example, 2016 or 2017--general revenues would exceed 45 percent of 
Medicare funding, then 2011 would be the ``warning'' year. The 
conference agreement would trigger actions in the next year, 2012, the 
third in this series of years.
  Next, Presidential legislation: Section 802 of the conference 
agreement sets out the Presidential response. After 2 consecutive years 
of trustees' projections that Medicare would have excess general 
revenue funding, the President would propose legislation in response 
within 15 days after the President's first annual budget of the next 
session of Congress. The legislation could use any means to respond, 
including adding to the dedicated sources. But if the legislation in 
response did not include matter within the jurisdiction of the Finance 
Committee, then the Senate discharge procedures would not apply.
  Now the statutory language says that the bill must ``contain'' matter 
within the Finance Committee's jurisdiction. The joint statement of 
managers, based on an earlier draft of the bill, says that the bill 
must be limited to the Finance Committee's jurisdiction. The joint 
statement of managers is in error on this point. And of course, the 
statutory language controls.
  Mr. FRIST. Will the Senator from Montana yield on that point?
  Mr. BAUCUS. I yield to the majority leader.
  Mr. FRIST. Mr. President, I thank the Senator from Montana and rise 
to say that I concur with his remarks that the statement of managers is 
in error and that the statutory language must control. The result would 
be faithful to the intent of the conferees on this measure.
  Mr. BAUCUS. I thank the Senator.
  Mr. President, returning to my discussion of the conference 
agreement's provisions, the conference agreement expresses a sense of 
Congress that the legislation that the President submits in response 
should eliminate excess general revenue Medicare funding for the 7-
fiscal year period. If, during the year in which the trustees issue a 
warning, Congress enacts legislation that would eliminate excess 
general revenue Medicare funding for the 7-fiscal year period, then the 
President would not have to propose legislation in response to the 
latest warning.
  The warning would also trigger certain House procedures. Section 803 
of the conference agreement sets out the procedures for House 
consideration of the President's legislative proposal. Within 3 days of 
receiving the President's legislative proposal, the majority leader and 
minority leader of the House, or their designees, would introduce the 
proposal. The legislation would be referred to the appropriate 
committees which would be required to report Medicare funding 
legislation no later than June 30. The chairman of the Budget Committee 
would certify whether the Medicare funding legislation would eliminate 
excess general revenue Medicare funding for the 7-fiscal year period.
  Unless the House of Representatives has voted on final passage of the 
legislation by July 30, the conference agreement would provided 
fallback procedures. After 30 calendar days--and concurrently 5 
legislative days--after the introduction of the legislation, a motion 
to discharge any committee to which the legislation has been referred 
would be in order, under specified circumstances, and debate on the 
motion to discharge would be limited to one hour.

[[Page S15742]]

  The conference agreement provides for floor consideration in the 
House of the discharged legislation by the Committee of the Whole no 
later than 3 legislative days after discharge.
  Now let me turn to Senate procedures. Section 804 of the conference 
agreement sets out the procedures for the Senate consideration of the 
President's legislative proposal. Within 3 days of receiving the 
President's legislative proposal, the majority leader and minority 
leader of the Senate, or their designees, would introduce the proposal. 
The Presiding Officer would refer the legislation to the Finance 
Committee. If the Finance Committee failed to report the legislation--
with or without amendment--by June 30, then a single motion to 
discharge the committee of any Medicare funding legislation would be in 
order. That motion to discharge would be subject to 2 hours of debate. 
If Congress enacted legislation that the Budget Committee chairman 
certified eliminated the excess general revenue, then the motion to 
discharge would not be available for the rest of that session of 
Congress.
  Once legislation got to the calendar, normal Senate rules would 
govern its consideration. The motion to proceed to the bill would be 
fully debatable. The bill itself would be fully debatable and 
amendable.
  That is all that this procedure would do.
  Now, let me take a few moments to talk about what the conference 
agreement on cost control would not do.
  The conference agreement does not include references to 
``insolvency.'' Some sought to label Medicare general revenue funding 
of more than 45 percent as indicative of ``insolvency'' and 
``unsustainablity.'' The conference agreement contains no such 
language.
  The conference agreement does not include a hard cap. Some sought a 
cap on Medicare spending after general revenues exceeded 45 percent. 
Congress would have had to vote affirmatively to allow the program to 
continue above that point. The conference agreement would not be a cap.
  The conference agreement does not include a new point of order. Some 
sought a point of order providing that when Medicare general revenues 
rose above 45 percent during the next 7 years for two consecutive 
reports, it would not be in order to consider legislation that would 
increase the general revenue funding. This requirement would be waived 
or appealed by 60 votes in the Senate. The conference report contains 
no new points of order.
  The conference agreement does not eliminate rights to filibuster. 
Some sought to eliminate the ability of Senators to filibuster the 
motion to proceed to the Medicare funding bill and to filibuster the 
bill itself. The conference report does not curtail the right to 
filibuster either the motion to proceed or the bill itself.
  In sum, the conference agreement would provide for reports, 
Presidential legislative proposals, and getting a bill on the calendar. 
The President or White House staff could get the reports with a phone 
call. The President could already make a legislative proposal whenever 
the President chooses. And any single Senator can get a bill on the 
calendar under current rules.
  Thus although the conference agreement could provide additional 
impetus to cause these steps to occur, nothing prevents all of them 
from occurring under current law.
  Thus, this is a reasonable set of provisions. And it should not be of 
concern to those who hold the procedures of the Senate dear.


                                S. 1402

  Mr. LAUTENBERG. Mr. President, I thank the leadership of the 
Committee on Commerce, Science, and Transportation for their resolve in 
pushing forward with reauthorization for Federal railroad safety 
programs. The bill reported out of committee, S. 1402, the Federal 
Railroad Safety Improvement Act, will reauthorize the Federal Railroad 
Administration, and make many important updates to continue to ensure 
safety on the Nation's railroads.
  In particular, I thank the chairman for his commitment to work with 
me to address a problem that has been brought to my attention regarding 
the use of railroad police officers. These railroad employees, who are 
commissioned by States with law enforcement authority on the railroad 
property, are given certain police powers for protecting railroad 
employees, railroad property, and the general public. The Federal 
Government, recognizing that these personnel perform important 
functions, has taken steps to extend this authority across States 
borders, as many North American railroads are extensive and traverse 
State boundaries.
  In this reauthorization, we look to extend this authority even 
further, to allow rail police officers to conduct law enforcement 
activities with respect to railroads other than the rail police 
officer's employing railroad, as our national system of rail 
transportation is an interconnected system. While I welcome this 
extension, as these officers perform an important security function to 
protect our rail system, I feel we should take a closer look at a 
related problem--the potential for abuse of this police power. As a 
special case of law enforcement officer, rail police officers answer to 
private sector employers and are not directly accountable to the public 
like most law enforcement officers. I am mindful that this could 
present potential for abuse--that under guide of State law enforcement 
authority, these rail police officers could engage in activities 
unrelated to law enforcement, such as enforcing railroad company 
policies or even labor agreements.
  Given the potential for abuse, I was prepared to offer an amendment 
to the bill during the committee's executive session to address this 
problem. However, the chairman has graciously committed to working with 
me to resolve the issue, and I look forward to working with him.
  Mr. McCAIN. Mr. President, I appreciate the concerns of the Senator 
from New Jersey and have been working with him to address this issue. 
It is a complex matter, and one that certainly merits further 
examination. As such, the ranking member of the committee, Senator 
Hollings, and I are writing to the Inspector General of the United 
States Department of Transportation seeking an assessment of the 
additional duties performed by rail police officers that are not 
related to law enforcement. We are interested to learn whether such 
duties are appropriate, and how potential abuses can be avoided. I am 
confident that the Inspector General's assessment and recommendations 
will be useful in helping us craft a bipartisan legislative solution 
should one be necessary.
  Mr. HOLLINGS. I also thank the chairman and the Senator from New 
Jersey for their work on this important issue. Reauthorization of 
Federal railroad safety programs is needed, and the chairman has acted 
with great diligence in advancing this legislation. The issue the 
Senator from New Jersey has raised concerning railroad police officers 
is one that requires a closer examination, and I believe the Inspector 
General can provide valuable input. I look forward to working with both 
of them on this issue.


                     definition of negotiated price

  Mr. BAUCUS. Mr. President, I rise today to engage the distinguished 
chairman in a colloquy regarding three sections of the conference 
report, 1860D-2(d)(1)(B) and 1860D-15(b)(3) as they relate to the new 
Part D prescription drug benefit, and 1860D-31(e)(1)(A)(ii), in order 
to clarify the intent of the conferees with respect to the prices paid 
for prescription drugs, particularly the concept of negotiated price.
  Mr. GRASSLEY. I thank the Senator from Montana and my Democratic 
partner in this legislation, Senator Baucus, for seeking to clarify 
this issue. I would be pleased to engage in a colloquy.
  Mr. BAUCUS. As I understand the conference report, how the bill 
defines negotiated price is critical to Medicare beneficiaries, 
prescription drug plans, and Medicare Advantage plans offering 
prescription drug coverage. More specifically, I understand in section 
1860D-2(d)(1)(B) that with respect to drugs purchased under Medicare 
Part D, the intent is for negotiated prices to include ``any dispensing 
fees for such drugs.''
  I also understand in section 1860D-15(b)(3) that ``gross covered 
prescription drug costs'' includes ``costs directly related to 
dispensing.'' The issue for me then is how the conference report 
intends the Secretary to operationalize the concept of dispensing costs 
especially with respect to

[[Page S15743]]

Medicare Advantage plans whose Medicare members do not fill 
prescriptions at retail pharmacies.
  I am referring to plans that operate their own pharmacies and take 
possession of prescription drugs directly from manufacturers and 
wholesalers. For these plans, is it the intent of the conferees that 
dispensing costs include all reasonable costs related to plan 
activities needed to deliver prescription drugs to their Medicare 
members, including the costs of delivering this benefit? For example, 
this would include salaries for pharmacists, and facility- and 
equipment-related costs.
  Mr. GRASSLEY. Yes, the distinguished Senator is correct. The intent 
of the conference report is to recognize that different Medicare 
Advantage plans are organized in different ways to deliver the new Part 
D prescription drug benefit and the benefits of the Medicare-endorsed 
drug discount card.
  The conferees understand that Medicare members of some Medicare 
Advantage plans fill their prescription in retail pharmacies and others 
in a plans' own pharmacies. For Medicare beneficiaries that will be 
using retail pharmacies to fill their prescriptions, the conferees 
understand that the prices negotiated between the prescription drug 
plan or the Medicare Advantage plan plus dispensing-related costs 
include the pharmacies' reasonable overhead costs.
  Similarly, it is the conferees' intention that Medicare Advantage 
plans whose Medicare members do not use retail pharmacies, but instead 
fill their prescriptions at the plan's pharmacies be reimbursed for the 
costs they incur in delivering the benefit when reimbursed for the same 
types of costs.


                              section 507

  Mr. BREAUX. I coauthored Section 507 of H.R. 1, the Prescription Drug 
and Medicare Improvement Act of 2003, which would amend current law 
regarding physician self-referrals. I would like to engage in a 
colloquy with my colleague, Mr. Grassley, in relation to the exception 
language contained in this provision.
  I would like to clarify congressional intent with regard to the 
``exception'' language included in S. 1, as this language may 
ultimately be included in any compromise between the two bills.
  I would like to discuss the extent to which the Secretary would have 
discretion to exempt a hospital based on the factors identified in the 
language. The language in the conference agreement states that, for the 
purpose of determining whether a hospital qualifies as under 
development, and therefore exempt from the self-referral limitation, 
the Secretary:

     . . . shall consider--
       (1) whether architectural plans have been completed, 
     funding has been received, zoning requirements have been met, 
     and necessary approvals from appropriate State agencies have 
     been received; and
       (2) any other evidence the Secretary determines would 
     indicate whether a hospital is under development as of such 
     date.

  It was my intent in crafting this language that the factors outlined 
would serve as an illustrative guide to the Secretary. The Secretary 
``shall consider'' these factors, but will not be required to see that 
each and every factor is met. Is it your interpretation, that the 
Secretary would have discretion to make a reasonable determination of 
whether a specialty hospital is ``under development''?
  Mr. GRASSLEY. Yes, I believe you are correct in saying that the 
Secretary would have discretion to consider these factors, but would 
not be limited to or bound by those factors. The language states that 
the Secretary ``shall consider,'' which implies that the Secretary 
shall consider these factors but that he or she should use the factors 
to make a reasonable decision as to whether a speciality hospital was 
``under development'' as of a certain date.
  Mr. BREAUX. Is it your understanding that a specialty hospital that 
has, as of November 18, 2003, met zoning requirements, received 
approval from the local planning board, and received partial funding, 
but has not yet completed all architectural plans would quality for the 
exception?
  Mr. GRASSLEY. Yes, it is my understanding that the Secretary would 
have discretion to determine to what extent the hospital was under 
development as of November 18, 2003. If the Secretary found that the 
hospital was ``under development'' despite not having completed all 
architectural plans, the Secretary could exempt that speciality 
hospital from the 18-month self-referral limitation.
  Mr. BREAUX. Similarly, is it your understanding that a specialty 
hospital that has completed or substantially completed architectural 
plans but has not yet received full funding would also qualify for the 
exception?
  Mr. GRASSLEY. The Secretary would have discretion to exempt a 
hospital that had completed architectural plans and initiated funding 
and, in making this determination, would consider the extent to which 
the other enumerated factors had been completed. It is my understanding 
that the language included in H.R. 1 is meant to provide guidance to 
the Secretary, and that the Secretary will ultimately determine to what 
extent the factors have been met and to what extent the hospital was 
``under development'' as of November 18, 2003.
  Mr. BREAUX. I thank my distinguished colleague for engaging in the 
colloquy.


              Retail Pharmacies and Community Pharmacists

  Mr. ENZI. Mr. President, I rise today to engage the distinguished 
chairman of the Finance Committee, Senator Grassley, in a colloquy 
regarding benefits that Medicare beneficiaries may receive through 
retail pharmacies and community pharmacists.
  Section 1860D-4 of the conference report to accompany the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 states 
that sponsors of Medicare drug plans or organizations that offer 
MedicareAdvantage plans shall permit plan enrollees to receive benefits 
through a pharmacy other than a mail-order pharmacy. These benefits may 
include a 90-day supply of drugs or biologicals. The conference report 
states that such enrollees would pay any differential in charge.
  I offered the amendment to add this language to the Senate version of 
the Medicare bill during our debate in June. My intent in offering this 
amendment was to prohibit plans from implementing restrictions that 
would steer consumers to mail-order pharmacies. The Senate voted 95 to 
0 in favor of requiring Medicare drug plans and MedicareAdvantage 
organizations to allow local community pharmacists to fill long-term 
prescriptions and offer any other services that they are equipped and 
licensed to provide.
  The language does permit a Medicare drug plan or MedicareAdvantage 
organization to charge a different copayment for a mail-order 
prescription versus a prescription filled by a community pharmacist. 
This happens today in many health plans.
  I note that the conference report would require plans to provide 
clear information about copayments and deductibles. This information 
would have to include details on the differences in charges between 
mail-order and retail prescriptions.
  My concern is that any differences in charges between mail order and 
retail be reasonable differences, based on the actual cost of 
delivering the service. I would be concerned if differences in charges 
were used as a method of steering seniors and the disabled to mail 
order pharmacies.
  I know that Chairman Grassley and I both agree that since seniors 
trust their local pharmacists, they should be allowed to keep those 
relationships in place.
  Mr. GRASSLEY. Mr. President, I say to my colleague from Wyoming that 
Medicare drug plans and MedicareAdvantage organizations should not 
force seniors or the disabled to choose a mail-order house when they 
would prefer to patronize their local community pharmacy.
  The Senator from Wyoming is correct in noting that the conference 
report permits plans to set a different charge to the beneficiary for a 
mail-order prescription versus a retail prescription. However, it is my 
expectation that any differential in charge be reasonable and based on 
the actual cost of providing the service in or through the setting in 
which it is provided. I also would expect that the Secretary of Health 
and Human Services would disapprove of any plan that would impose a 
differential charge that was intended primarily to steer Medicare 
beneficiaries to mail-order pharmacies versus retail pharmacies.

[[Page S15744]]

  Mr. ENZI. I thank the distinguished chairman for this clarification.
  Mr. INOUYE. Mr. President, I have voted today to oppose the 
termination of debate on the Medicare Conference Report because I have 
carefully analyzed the report and come to the conclusion that far from 
being a bipartisan compromise on prescription drug benefits, the report 
is nothing short of an attempt to compromise the integrity of the 
Medicare and Medicaid system as we know it.
  When it comes to health care in America, there are many parties in 
interest--providers, patients, care facilities, and pharmaceutical 
suppliers, to name a few. These groups have interests that may, at 
times, be in conflict, but I believe one overwhelming interest unites 
them all: providing the American public with the health care services 
and treatment that it needs. Regrettably, I find that the report we 
have been asked to consider has abandoned this powerful unifying 
principle.
  Worse than abandoning our commitment to the health of our Nation, 
when viewed as a whole, the report strikes at the foundation of the 
Medicare and Medicaid system. Rather than buttressing the system of 
comprehensive care for our senior citizens and disabled persons, the 
report actually sows the seeds of its demise by undermining its ability 
to provide a prescription drug benefit, subsidizing competing private 
health plans, and increasing Medicare premiums without increasing the 
benefits provided.
  The overwhelming drive to reconsider the Medicare and Medicaid 
systems came from listening to our constituents and their frustration 
with the ever-increasing cost of the medicines they needed. From blood 
thinners, to antibiotics, to state-of-the-art pharmaceuticals for 
cancer and HIV/AIDS, the cry for help was clear: the cost of 
prescription drugs was breaking the backs of the Americans who were 
paying for these expensive, but life-saving therapies.
  Far from addressing these needs, however, the report actually makes 
the problem worse. On the administrative level, the report dilutes the 
Medicare systems's purchasing power by mandating the purchase of 
necessary medications by individual Medicare regions, rather than as a 
whole system. With more individual buyers, pharmaceutical companies are 
more able than ever to raise their prices, because the individual 
regions will have less bargaining power.
  The report will also impact average beneficiaries by potentially 
depriving them of the specific drugs they need by providing coverage 
for only one or two of each class of drug. In a world where antibiotic 
resistant strains of common ailments are on the rise, this could be a 
very expensive proposition, if the drug you need is not one of the 
covered drugs in the antibiotic class. Difficulties only escalate in 
medically complex cases where patients' individual responses to 
pharmaceutical may vary dramatically, as in treatments for high blood 
pressure, high cholesterol, cancer, and HIV/AIDS.

  Even worse, what flexibility there is in the report to tailor the 
limited drug benefit to the needs of individual patients must now be 
requested and petitioned for by the patients themselves. Placing the 
paperwork burden on seniors and the disabled only shifts the burden to 
the people least able to bear it, and I would not be surprised to learn 
that as a result, more and more beneficiaries will lose access to the 
medicines they need.
  Finally, the report strikes a further blow to more than 6 million of 
our neediest citizens, those who are eligible for both Medicare and 
Medicaid. At present, States have the statutory flexibility to make any 
copayments for persons who are ``dual eligible.'' Under the report, 
however, persons with dual coverage will face increased out-of-pocket 
expenses because States will lose this flexibility. As a result, 
Americans who are already below the poverty level would be expected to 
make copayments between $1 and $3--a great hardship for single persons 
with incomes of less than $8980 per year, and couples with incomes of 
less than $12,120 per year.
  More than failing to provide the promised prescription drug benefit, 
however, the report actually paves the way for eventually dismantling 
Medicare and Medicaid altogether. The report establishes a 
demonstration project for ``premium support'' in six metropolitan 
areas. ``Premium support'' does not mean, as one might think, 
additional Federal support for areas where costs are especially high, 
and premiums are not sufficient to cover all expense. Just the 
opposite, it is a way of increasing the Medicare premiums Americans pay 
in order to compensate for rising health care costs. Moreover, with a 
``demonstration project'' such as this in place, it would be a simple 
step to broaden the ``project'' to include the entire United States--
and with an estimate average 25 percent increase in premiums, the costs 
to American citizens would be substantial.
  The report would also provide a $12 billion subsidy to private Health 
Maintenance Organizations and Preferred Provider Organizations--HMOs 
and PPOs. With a massive subsidy such as this, there will be no 
question but that HMOs and PPOs will have a competitive edge over 
Medicare because they will receive more money per plan participant than 
Medicare will--and with more money, subsidized insurers will be able to 
provide more benefits.
  ``Premium support'' and a $12 billion subsidy for private insurers 
look suspiciously like a one-two punch aimed at Medicare. On the one 
hand, ``premium support'' will increase the cost of Medicare without 
raising benefit levels, while on the other, a multi-billion dollar 
subsidy will allow HMOs and PPOs to slash premiums and provide more 
services. Add to this a prescription drug benefit that actually leaves 
millions of Americans worse off than they are now, and it is difficult 
to see how this conference report responds to the simple unifying 
principle of our health care system: providing Americans with the 
health care they need.
  Mr. SCHUMER. Mr. President, our seniors deserve a comprehensive, 
meaningful drug benefit under Medicare--it's something that I, like so 
many of my colleagues, have been fighting for years. The world of 
health care has changed, and Medicare should be updated to give seniors 
the services and care they need.
  I voted for this bill when it first came to the Senate because I 
thought it was a good start, and I hoped we could build on it in 
conference. Unfortunately, now that I see the result, I have to say 
this is not good enough for New York's seniors--in fact, the bad parts 
outweigh the good.
  The bill contains some good things--it provides a good benefit for 
seniors who have low incomes or very high drug costs who have no other 
drug coverage. But for the average middle class senior with moderate 
drug costs, the benefit is much too small.
  In fact, the way this benefit is structured, hundreds of thousands of 
New Yorkers who currently have coverage may actually end up worse off 
than they are today--and that doesn't sound like a benefit to me.
  When I voted for the bill the first time around, I said that if it 
got any weaker, got any closer to the House version, I could not, in 
good conscience, support it. And, unfortunately, that seems to be what 
has happened here.
  Other than the generic drug provisions--which represent a huge win 
for consumers across the board--it seems in every other case where the 
choice was between seniors and the big drug companies, the big drug 
companies have won.
  Of all the bad things in this bill, the thing that angers me the most 
is that Congress has squandered away the single best weapon we have 
against rising drug costs by forbidding Medicare from using its buying 
power to negotiate lower drug prices with the drug companies.
  At a time of rising budget deficits and escalating costs, it really 
makes you wonder why the Congress would go out of its way to forbid the 
Federal Government from using its buying power to get prices like we do 
through the VA.
  If the Federal Government leveraged its full buying power under 
Medicare, we might not have a doughnut hole in this benefit at all.
  The impact of this reckless prohibition is best seen by a Boston 
University study that shows that the drug companies will earn windfall 
profits of $139 billion over the next eight years alone from this bill.

[[Page S15745]]

  This bill not only ensures we will be paying the highest possible 
price for drugs in this country, but it also guts any chance at 
reimportation--guaranteeing the drug companies a captive audience.
  Is that the Republicans' idea of cost containment?
  What this bill does is ensure that the government is gouged by the 
drug companies while putting a huge bulls-eye on the Medicare program. 
The prohibition on negotiating and artificial ``cost containment'' 
mechanisms in this bill will simply help the opponents of Medicare 
justify shifting more and more costs onto the backs of seniors.
  Under the drug benefit before the Senate today, the average middle 
class senior could still be saddled with up to 80 percent of their drug 
costs. And almost 30 percent of beneficiaries would actually pay more 
for this Medicare drug benefit than they would be getting back in drug 
coverage. What kind of relief is that?
  So this bill represents a paltry benefit--or no benefit at all--for 
most people who currently have no drug coverage. I had hoped that the 
bill would--at the very least--help provide a down payment for the one-
third of New Yorkers who currently have no coverage, but I don't think 
it even does that.
  In fact, there is a very good chance this benefit will actually 
jeopardize access to affordable drugs for New Yorkers who currently 
have good coverage.
  Of the 2.7 million Medicare beneficiaries in New York State, 989,000 
have prescription drug coverage from their former employers; 329,000 
are enrolled in the state's pharmaceutical program--known as EPIC; and 
about 537,000 are covered under New York's Medicaid program.
  First, let's look at the EPIC program. Right now, EPIC is available 
to individuals with incomes less than $35,000 and couples with incomes 
less than $50,000. People in EPIC currently have access to nearly any 
drug their doctors prescribe, and can go to virtually any pharmacy in 
the state to get their prescriptions filled.
  I fought to get strong language in the Senate version of the Medicare 
bill that would have provided these New Yorkers with a benefit better 
than the one they get through EPIC.
  The Senate bill would have provided New York State a subsidy equal to 
about $375 million per year to help it continue the EPIC and even 
expand it to provide a more generous benefit, to cover the disabled, 
which the State currently does not do, and to enroll even more people.
  The watered-down compromise in the conference report leaves far too 
many questions unanswered.
  Under the bill, if the State wants to use any of the new Federal 
investment in Medicare, it has to force EPIC seniors to go and enroll 
in a Medicare private plan and the State legislature will have to go 
back to the drawing board and restructure the entire EPIC program to 
coordinate with the Medicare plans.
  The end result will be a program so laden with red tape that it is a 
virtual certainty that seniors fall through the cracks and lose 
coverage. It will be an administrative nightmare for the State to 
implement.
  I have yet to hear one compelling argument for how the bill before 
the Senate will enhance the EPIC program. The State can't even tell me 
what will happen to EPIC and the 329,000 seniors who depend on it if 
this Medicare bill passes.
  Even more shocking is that the bill gives the private Medicare plans 
a say in how generous any additional state coverage can be. The way I 
read it, under the new scheme, the Medicare plans will be able to limit 
which drugs an enrollee has access to and limit what pharmacies they 
can go to--no such restrictions currently exist for EPIC enrollees. In 
short, when it comes to EPIC, many seniors may be worse off with the 
bill than without it.
  One of the other major concerns I have about this bill is that it 
simply doesn't do enough to protect retirees who have good employer-
sponsored coverage.
  The conferees made some progress toward reducing the employer drop 
rate by giving employers a tax break worth an additional $18 billion. 
However, to truly protect retirees from losing coverage would cost 
about $65 billion.
  Even with the change made in conference, an estimated 215,000 New 
Yorkers will likely lose their retiree coverage if this bill becomes 
law, and many others may see their options narrowed. That's simply too 
big a risk for me.
  In addition, starting in 2005, all Medicare beneficiaries would be 
saddled with higher deductibles for doctor visits. Under the bill, 
Medicare premiums would no longer be universal, but higher for all 
beneficiaries with incomes of $80,000 and up--a provision which 
disproportionately affects states like New York.
  In addition, over 500,000 Medicare beneficiaries in New York--living 
in Rochester, Buffalo, Glens Falls and the Capital Region--may be 
selected for the premium support demonstration program which would 
provide seniors with a false choice of entering a private plan or being 
forced to pay more for traditional Medicare.
  As I have said, the bill does provide a good benefit for low-income 
seniors and seniors with very high drug costs who don't have access to 
any other drug coverage. However, the new assets test in the conference 
version of the bill means that about 150,000 fewer people will qualify 
for these low income subsidies than under the Senate bill.
  Even the seniors who do get this additional assistance will face 
confusing and difficult choices each year about which Medicare plan to 
choose.
  They will face a confounding maze trying to figure out which plan 
will cover the drugs they use and allow them to continue to go to the 
drug store down the street. If they are even lucky enough to find such 
a plan, it could be gone the next year, or change its premiums or its 
list of covered drugs, and seniors would be back to square one.
  Of course, despite all of these negatives, there are some very 
important provisions in this bill which make my decision a very 
difficult one.
  The bill includes significant relief for rural, small community and 
small city hospitals--about $344 million over 10 years for New York's 
hospitals, which is crucial to ensuring access to high quality care not 
only in the very rural areas of the state, but also in and around 
upstate cities like Syracuse, Rochester, and Buffalo.
  There is also modest relief for the nation's teaching hospitals in 
the bill--but it is not nearly enough. New York institutions would see 
an additional $76 million over the next four years, but this only 
restores about 11 percent of the total cuts they face over that time 
period.
  The Nation's teaching hospitals are the backbone of our health care 
system--they do the research and they train the doctors--and I am 
worried we will not get another opportunity to provide them the 
resources they need to do their job.
  The bill also addresses the crisis in physician payments which was 
driving so many physicians out of the Medicare program and leaving 
seniors in the lurch. These provider issues must be addressed--we've 
fought back the draconian cuts in the Balanced Budget Act for five 
years now. Our providers are struggling, and it's time to set things 
straight.
  I am pleased that the bill includes provisions based on a bill I 
introduced with Senator Santorum to stabilize the Medicare+Choice 
program in the short term.
  The changes will ensure that plans in places like Long Island and 
Westchester get paid on par with plans in other areas of the country 
and will help significantly bring down premiums in these areas over the 
next few years.
  Perhaps the biggest win in the bill--not only for seniors, but for 
all consumers, employers, and purchasers of prescription drugs--is the 
extraordinary victory we have achieved in the face of the unprecedented 
influence of the big pharmaceutical companies: generic drugs.
  The generic drug provisions which Senators Gregg, Kennedy, McCain and 
I have been fighting for over the past few years--and which passed the 
Senate by a vote of 94-1--represent a huge step forward for all 
seniors, consumers, and purchasers of prescription drugs.

  The provisions close loopholes in the law and end the abusive 
practices in the pharmaceutical industry which have kept lower-priced 
generics off the market and cost consumers billions of dollars.

[[Page S15746]]

  The Gregg-Schumer amendments to the Hatch-Waxman Act, would put an 
end to the practice of brand companies listing frivolous patents for 
the sole purpose of automatically delaying generic approval. It would 
also ensure that the 180-day exclusivity period enjoyed by the first 
generic to challenge a patent cannot be used as a bottleneck to prevent 
additional generic competition.
  First, the Gregg-Schumer provisions would limit brand drug companies 
to a single 30-month stay of generic approval, and only on patents 
listed at the FDA before a generic application is filed. This way, the 
30-month stay--if there is one at all--will run concurrent with FDA 
approval of the generic application and minimize delay.
  Second, key to ensuring that patent issues are resolved in a timely 
way, the provisions clarify that a generic applicant has a right to 
seek a declaratory judgment that its product does not infringe a patent 
or that a patent is invalid, and direct courts that they must hear 
these declaratory judgment cases to the maximum extent permitted by the 
Constitution.
  With the removal of the automatic 30-month stay, if the generic 
company did not have a clear right to seek resolution of potential 
patent disputes on its own, the brand company could simply file a new 
patent and sit back and wait--leaving the generic at risk of being sued 
and having to pay triple the brand's lost profits if it does decide to 
enter the market. This clarification of the courts' jurisdiction will 
have an immediate effect on both pending and future declaratory 
judgment actions brought by generic applicants.
  Third, the provisions enforce the patent listing requirements at the 
FDA by allowing a generic applicant, when it has been sued for patent 
infringement, to file a counterclaim to have the brand drug company 
delist the patent or correct the patent information in FDA's Orange 
Book.
  Fourth, the generic provisions revamp the 180-day exclusivity 
incentive provided in the Hatch-Waxman Act. Under the act, the first 
generic drug company to challenge a patent on a brand drug has the 
exclusive right to market its drug for 6 months before any other 
generic can compete. This feature encourages generic applicants to 
challenge weak patents and brings consumers much quicker access to 
affordable generic drugs.
  However, at times, brand and generic companies have abused this 
exclusivity period--both through collusive agreements and use of other 
tactics that allow the provision to act as a bottleneck to generic 
competition. The Gregg-Schumer provisions end this abuse because the 
generic company forfeits its exclusivity if it doesn't go to market in 
a timely manner.
  The way the provision works, if another generic applicant has 
resolved patent disputes on the patents which earned the first to file 
its exclusivity--either through a court decision, settlement, dismissal 
because the brand company says it does not intend to sue, or withdrawal 
of the patent by the brand company--the first generic applicant has to 
go to market within 75 days or it forfeits its right to the 
exclusivity.
  If it forfeits, then the exclusivity is lost and any other generic 
applicant that is ready to be approved and go to market can go. Either 
way, the provision ensures that consumers have access to a low-cost 
generic as soon as possible.
  I am very pleased that the conferees preserved these important, pro-
consumer cost containment provisions. Indeed, they are the only part of 
this bill where consumers, seniors, and taxpayers prevail over the big 
drug companies.
  In closing, I had truly hoped this Congress would craft and pass a 
meaningful Medicare drug benefit for seniors--one which would have 
protected beneficiaries who have access to good coverage through other 
programs and which would have provided real relief to seniors with no 
other choice.
  While it contains some good provisions, the package before us does 
neither. I think we can do better, and we owe it to the 40 million 
seniors in this nation who have waited decades for drug coverage under 
Medicare to do better than this.
  Mr. ROCKEFELLER. Mr. President, on July 30, 1965, President Lyndon B. 
Johnson stood with President Harry Truman and, together, they delivered 
the Medicare program. They proudly addressed the American people as 
President Johnson proclaimed, ``No longer will older Americans be 
denied the healing miracle of modern medicine. No longer will illness 
crush and destroy the savings that they have so carefully put away over 
a lifetime so that they might enjoy dignity in their later years.'' 
Today, those words still move me and yet, if I am to be honest, they 
also haunt me as we consider the Medicare reform legislation before us. 
I know that this legislation charts a course that will begin to undo 
the good works of our former Presidents and of a program that is 
perhaps the single most effective public initiative in our nation's 
history. Medicare has literally saved the lives of our seniors, keeping 
them from poverty and providing the peace of mind that comes with 
security. For this reason, I have a heavy heart and a sense of near 
dread about this bill. My heart is heavy because I know that this bill 
to reform and ``improve'' Medicare is deeply, fundamentally flawed. 
This is not what Presidents Johnson and Truman wanted for the millions 
of our parents and grandparents who made America strong, and it is not 
what I want, either.
  For many years, we have talked about the need for a prescription drug 
benefit under Medicare. For a brief moment, I believed we in the Senate 
were serious about delivering a meaningful benefit. However, I cannot 
support the Republican Medicare prescription drug bill because it 
forces seniors to choose between paying more for their own doctor or 
signing up with an HMO; leaves seniors to pay thousands in out of 
pocket costs; eliminates employer drug coverage for 2.7 million 
retirees; prevents efforts to keep drug costs down; and effectively 
prohibits seniors from importing cheaper drugs from Canada.
  I recognize that this bill commits $400 billion to a Medicare 
prescription drug benefit and truly helps some low income seniors who 
are without coverage today, and I am glad that it gives a critical 
boost to rural hospitals and doctors. But the fine print matters and 
will have very dangerous consequences for how much seniors have to pay 
for their Medicare benefit, whether this drug benefit really serves 
seniors, and whether we are strengthening or weakening Medicare for the 
future. I have always said that a Medicare prescription drug bill must 
be voluntary, affordable and accessible to all Medicare beneficiaries; 
must truly help with the high cost of prescription drugs; and must 
strengthen the Medicare program for the future. This bill fails on all 
counts.
  West Virginians and many of my colleagues know I have been working on 
Medicare for 20 years. I sat on the Medicare Commission for a year 
during which we debated the best way to improve Medicare. Before that, 
I chaired the U.S. Bipartisan Commission on Comprehensive Health Care, 
which discussed ways to address the problems of the uninsured and the 
need for long-term care reform in this country. Today, I am the ranking 
member of the health subcommittee of the Senate Finance Committee. I 
was a member of the conference committee on this bill--but in name 
only, not in practice. Nevertheless, my goal has always been, and 
continues to be, improving Medicare and the quality of health care 
available to all Americans. This bill does not improve this program. 
This bill harms this program--actually harms Medicare.
  This bill is a tool to force seniors to leave the traditional 
Medicare program they know and trust in order to obtain the drug 
benefit they need and deserve. Many people have said that this plan is 
voluntary and, therefore, if a senior chooses to stay in traditional 
Medicare and get a drug benefit, he or she can do so. This legislation 
does not guarantee that in any way. Under this legislation, seniors 
will have two different options for receiving a drug benefit. The first 
option is to stay in traditional Medicare for their doctor and hospital 
services and enroll in a ``drug-only plan'' to receive their drugs. The 
second option is to give up traditional Medicare and enroll in a HMO or 
PPO for all of their health care services. You may ask: what is a drug-
only plan and how does one work? The answer is that we have no idea 
because no such entity exists today. It is a completely new concept

[[Page S15747]]

which the Administrator of CMS said does not exist in nature and would 
probably not work in practice. The former head of the Health Insurance 
Association of America said that drug-only plans are like insuring 
against haircuts. So, it's completely uncertain whether these plans 
will emerge, but let's say for a moment that they do. Well, at least 
seniors should be assured that they can remain in traditional Medicare 
and get a prescription drug benefit, right? Wrong. There is no limit on 
what these drug-only plans can charge seniors none at all. These plans 
could charge seniors $100, $500, or even $1,000 per month. These 
premiums could be completely prohibitive. West Virginia seniors will 
certainly not be able to afford premiums that high. If that is the 
case, seniors will not really have the option to stay in traditional 
Medicare and get a prescription drug benefit. They will be forced to 
enroll in an HMO in order to get a drug benefit and that is not what 
our seniors want.
  Again, to be fair, this bill has some provisions, including those 
affecting physician services and rural hospitals that will be helpful 
to my home State of West Virginia. I fully recognize that; in fact, I 
pushed for these because I understand that good care is critical to 
good health, and that we must adequately reimburse Medicare providers 
for that good care.
  However, despite this, I have grave concerns about the compromise 
produced by the Conference Committee charged with reconciling 
differences between the House- and Senate-passed Medicare reform bills. 
I was on the conference committee. I understand the arguments on both 
sides. And now, more than ever, I believe that the Congress needs to 
pass a meaningful prescription drug benefit that gives seniors more for 
their money, not less. I do not want to privatize Medicare, undermine 
existing retiree coverage, or force seniors to flip-flop between plans. 
Unfortunately, this bill would do all of that and more. Today, 339,000 
seniors live in West Virginia. Nearly 30,000 West Virginia seniors will 
lose their employer-sponsored prescription drug coverage simply because 
of the enactment of this bill. As health savings accounts (HSAs) 
created by this legislation select and cover healthier, younger 
seniors, employers will be left to cover sicker, older seniors. 
Employers will see their health care costs rise and they will be priced 
out of continuing to provide employees or retirees with coverage, 
leaving remaining retirees with a benefit that is less desirable than 
they had before. Meanwhile, 70,000 West Virginia seniors will fall into 
a $2,800 coverage gap, forcing them to bear the total cost of their 
drug themselves until they reach the end of that gap. In fact, the 
available benefit will be so stingy that many seniors will pay more for 
this drug plan than they will receive in actual drug benefits.

  At the same time, private insurance plans will be assured even 
greater profits through a $12 billion ``slush fund'' created by this 
legislation. Proponents argue that this ``slush fund'' is necessary to 
bring HMOs into rural areas. The fact is that this additional funding 
is necessary because HMOs have overhead costs. They have to pay their 
investors, provide a return to their stockholders and they have to pay 
for good marketing materials because that's the best way to skim off 
the healthiest seniors. On average, private plans have administrative 
costs that are about 15 percent of total spending whereas Medicare's 
administrative costs are 2 to 3 percent of total spending. There is no 
way that private plans can be as efficient as Medicare. Yet I am not 
opposed to allowing them to compete fairly with Medicare. However, we 
should make them compete on a level playing field. We should make them 
compete by creating efficiencies. We shouldn't take money away from the 
highly efficient Medicare program and give it to the HMOs to help them 
instead of seniors. That is not the free-market at work. That is not 
real competition. And, while a ``premium support'' demonstration, which 
effectively allows a voucher system instead of a real Medicare 
prescription drug benefit, will take place in six metropolitan 
statistical areas (MSAs) initially, I believe we can safely assume that 
this demonstration is meant to be standard at some point. This 
demonstration is expected to raise monthly Medicare premiums by 26 
percent.
  Perhaps most disturbing, 45,000 ``dual eligible'' beneficiaries will 
pay more for every prescription drug they receive under this 
legislation. Dual eligibles are seniors who qualify for Medicaid by 
virtue of their income. They currently receive drug coverage under 
Medicaid. In my State of West Virginia, these seniors pay between $0.50 
and $2.00 per prescription depending on the total cost of the drug. 
Under this legislation, they could be required to pay twice that much. 
I want to be clear on this point because I was among those insisting 
that the dual eligibles be included under the Medicare benefit and not 
left in Medicaid. I believe this conference report does the right thing 
by including these seniors in the Medicare benefit. However, this 
legislation precludes States from ``wrapping around'' Medicare. In 
other words, States will not receive any Federal dollars for assisting 
dual eligible beneficiaries with the costs not covered by Medicare. 
This is unprecedented. For every other benefit covered by Medicaid but 
not by Medicare, the states receive a Federal match to provide those 
benefits to our poorest seniors. For example, Medicaid covers long-term 
care but Medicare does not. So, for those seniors who are also eligible 
for Medicaid, the Federal Government provides matching dollars to 
states to provide long-term care to dual eligibles. This conference 
report completely twists that concept of protecting our poorest seniors 
against increased costs in an unprecedented way. This arrangement 
represents a fundamental change in the relationship between Medicare 
and Medicaid. Many predict that the individuals affected will choose to 
forgo the prescription drugs that they need rather than try to pay what 
they cannot afford.
  In my judgment, this bill represents the greatest threat to the 
Medicare program since its enactment. While numerous opportunities 
existed to strengthen it, they were wasted. Instead of devoting $12 
billion to closing the $2,800 coverage gap, this conference report 
gives it to HMOs. Instead of protecting the right of our seniors to 
stay in traditional Medicare and get a prescription drug benefit, this 
bill protects the rights of the private plans to charge any premium 
they want. Instead of shoring up retiree coverage for the two to three 
million beneficiaries across the United States who will lose drug 
coverage as a result of this bill, this bill includes tax shelters that 
threaten to undermine the entire employer-based system. This bill is a 
give-away to special interests, compiled in the dead of night, under 
wraps. It is shameful. Public policy, like life, is about choices and 
this bill makes all the wrong choices for our seniors.
  While I have painted a bleak picture, I strongly believe that we can 
avoid disaster. We can do so by putting this bill aside and coming back 
to the table with a proposal that helps seniors and protects the long-
term viability of what is a truly great program. We can take into 
account the seniors who won't benefit from the low-income provisions in 
the bill. We can protect retirees, and we can implement positive reform 
that is productive, not destructive, confusing, or manipulative. It is 
not too late. It is not too late. I urge my colleagues to reject this 
bill and to immediately go back to work for the kind of Medicare drug 
benefit seniors deserve.
   Mr. COLEMAN. Mr. President, we stand here today at a historic moment 
in this country as we begin consideration of the Medicare prescription 
drug bill. This bill is a triumph not for a party or a President but 
for America's seniors and their families. This is an incredibly hopeful 
day for all Americans who long for a national government that can get 
things done for people.
   I campaigned on a promise to get things done--deliver to the 
American people what they need to live better lives and what they are 
looking to Congress to accomplish to make America a stronger country. 
Prescription drugs, energy, partial-birth abortion were all at the top 
of the list of issues that most Americans were looking for Congress to 
take action. Their seemingly simple request was for us here in 
Washington to put politics aside and do what is right for the American 
public.
   I am proud to say we are seeing that happen with this Medicare bill. 
This is a bipartisan effort that, although not

[[Page S15748]]

perfect, makes a good start at addressing the needs of Minnesota's 
seniors and health care providers as well as those across this country.
   This is the largest and most comprehensive rural health care 
improvement package ever contemplated by this body. Last year, as I 
campaigned across Minnesota and spent many hours talking to our rural 
health care providers, it was apparent to me that most of our hospitals 
and doctors had given up hope for fair Medicare reimbursement.
   Thanks to the strong leadership of Chairman Grassley, we have a bill 
before us that has $26 billion--or $2.6 billion each year for 10 
years--for rural providers, something that one short year ago seemed 
nearly impossible.
   Quality rural health care is one of the foundations of our rural 
communities--this isn't simply about making sure our rural hospitals 
are adequately reimbursed. This is about preserving a way of life in 
America.
   Without rural hospitals and physicians, it is tough to raise a 
family and hard to attract new businesses to rural communities. Without 
access to health care, many of our out-state towns simply couldn't 
exist.
   This bill seeks to eliminate many of the disparities in 
reimbursement rates that have existed too long and crippled the rural 
health system. Hospitals, physicians, and ambulances, as well as all of 
those health professionals who work within these systems will not see 
Medicare reimbursement rates that better reflect the realities of the 
costs of providing care in rural communities.
   As I look back on the accomplishments of the first session of the 
108th Congress, addressing the rural health care payment disparity 
under the Medicare program will undoubtedly be one of the most 
meaningful achievements to Minnesotans. Many said it couldn't be done, 
and today I have the great opportunity to come to the Senate floor and 
tell my constituents that we will be voting on a bill that takes a 
major step in providing equality with urban payments that will 
significantly improve their ability to provide quality care.
   Minnesota has a long tradition of providing high quality care, but 
many of our seniors have not had access to this care because of the 
lack of prescription drug coverage under the Medicare program.
   Again, I have the great honor coming here and announcing to the 
seniors back home that help is on the way.
   Beginning in 2006, the 677,400 Medicare beneficiaries in Minnesota 
will have access to drug coverage for the first time in the history 
of the Medicare program, and 187,356 of these people would not 
otherwise have access to drug coverage.

  That means access to new drug therapies that could never been 
imagined in 1965 when Medicare was created. It is time to bring this 
program in line with current medical practices. A 1965 Cadillac is a 
classic. A 1965 health care benefit is a travesty.
  This bill will provide prescription drug coverage for 41 million 
people in this country--41 million people! Is this the perfect benefit? 
I'm not sure what the perfect benefit realistically looks like. But I 
do know that the average senior's drug costs will be cut roughly in 
half under this proposal. That is meaningful assistance for all seniors 
and the bill provides even more assistance for those low-income seniors 
who need us to shoulder even more of the burden.
  Let's not let perfect be the enemy of good. In the words of the AARP, 
one of the largest senior associations, ``Millions of Americans can't 
afford to wait for perfect.''
  And we know that drugs are most effective when used to prevent the 
onset of a health condition. Right now almost 93 percent of our health 
care dollars go to treat a person who is sick. While we have amazing 
screening and early detection capabilities, we have a program that 
waits for people to develop dangerous and costly conditions before they 
can receive care.
  It appears to me that this is a 1965 model of care, not a model that 
belongs in a 2003 health care system. This bill for the first time 
includes a ``Welcome to Medicare'' physical that will allow 
beneficiaries to get an assessment of their health condition and 
possibly detect conditions that could possibly escalate over time. It 
also includes cardiovascular screening, blood tests and diabetes 
screening that will be available without deductibles or co-pays to 
encourage seniors to take advantage of these benefits.
  I want to stop for a moment at the word ``encourage.'' It is 
absolutely critical for every senior to know that they don't have to 
take advantage of the preventive screenings, they are not required to 
participate in the prescription drug plan, and most importantly, no 
seniors under this proposal are forced into a private health plan. 
Every senior who chooses to remain in traditional Medicare has that 
equally important option under this bill.
  This bill is about expanding choice. Time and time again I hear from 
seniors who have said they want to receive the same benefits that my 
colleagues and I here and in the House of Representatives enjoy. This 
bill is about giving seniors the option to participate in a plan that 
looks very close to the benefits that I and most individuals in the 
private sector enjoy.
  This bill is good for our seniors, it is good for health providers, 
and it is good for the American public who are tired of the partisan 
battles that have characterized this Congress. I thank Senators 
Grassley and Baucus and the members of the conference committee who 
have crafted this bipartisan Medicare package. This is a truly historic 
time in this body's history.
  As we look toward completing our work for this first session, I am 
hopeful that the spirit of cooperation that has led to this bill will 
be extended to the many important issues we will leave unresolved this 
year.
  The Thanksgiving season is upon us. Our work in this session is 
nearing completion. But our work will not be done until and unless we 
seize this historic opportunity and bring a prescription drug benefit 
and hopes for a better and healthier life and make this a Thanksgiving 
to remember for all the right reasons for our senior citizens and their 
families.
  Mr. BYRD. Mr. President, the Republican leadership and even a member 
of the President's Cabinet twisted arms and bullied individual House 
Members late in the night and into the wee hours of Saturday morning. A 
roll call vote was held open for almost 3 hours--the longest House roll 
call vote in history--until enough Members ignored their conscience, 
cried ``mercy,'' and voted ``yes'' on the Medicare bill.
  I believe most Americans would find such tactics repulsive and 
unbecoming of how Members of Congress should behave. One might expect 
to see such arm twisting and intimidation during a prisoner 
interrogation scene in an episode of ``Law & Order,'' not a voting 
session of Congress--especially on a vote of such great importance to 
the citizens of this country.
  What happened the other night was nothing short of a subversion of 
the democratic process itself and a subversion of the democratic 
principles our Founders stood for. Is this the manner of legislating 
that our Founding Fathers had in mind when they so craftily designed 
the political institutions of this country? I do not believe it is the 
scenario our Founders envisioned when they created the Senate--to act 
as the ``saucer,'' as George Washington so wisely said, to absorb the 
overheated passions pouring out of the House of Representatives.
  If ever there were a time for the Senate to act as that ``saucer,'' 
it is now. It is a time when the health care security of 40 million 
senior citizens, and millions of Americans for years to come, could be 
on the brink of collapse as a result of this bill. We may even be in a 
race toward the finish line of Medicare itself. And I am afraid that 
the race is driven by partisan politics, extreme ideological fervor, 
and blatant special-interest greed--all at the expense of our Nation's 
most vulnerable citizens. Will the Bush administration and Republican 
leadership of this Congress stop at nothing in order to get what they 
want?
  I am bewildered as to why we are engaged in such a mad stampede to 
ram this bill through the Congress--especially when this legislation 
will not take effect until 2006. I have been around long enough in 
Congress to know that the actions of today's leadership smack of 
arrogant politics and calculated indifference.
  The more I read through this Medicare bill, the more I become 
convinced

[[Page S15749]]

that history is again repeating itself. I can recall a painful 
experience during my majority leadership when an outraged citizenry, 
composed mostly of seniors, forced Congress to repeal the ill-fated 
Medicare Catastrophic Coverage Act back in 1989. The year before, 
Congress was engaged in a Medicare debate eerily similar to the one we 
are having today. An agreement was reached to make the most sweeping 
change in Medicare's ``then'' 23 years of existence.
  At that time, Congress agreed to two key changes to the Medicare 
Program--a prescription drug benefit and a ``stop-loss'' protection 
from catastrophic medical bills. Facing deficits as we do today, 
Congress decided that beneficiaries should pay for the new benefits 
themselves, with the wealthiest paying the most. The new law included a 
complicated benefit that was too difficult to explain and a lengthy 
delay in the benefit's taking effect. In the end, seniors saw the bill, 
and wanted no part of it. After angry protests, it was repealed. We are 
poised to make the same mistake again.
  I foresee a great deal of confusion and dismay occurring around 
kitchen tables across America when people actually start to read beyond 
the newspaper headlines and see the fine print of this plan three years 
from now. Seniors may not know whether to laugh or cry. And if seniors 
reject this new Medicare plan, it will fail and fail miserably.
  When senior citizens wake up in 2006 and find out what this bill is 
really about, it will not be the turkey that needs to be eaten on 
Thanksgiving day, it will be all of us in Congress eating crow.
  We should not let political ideology drive our Nation's Medicare 
policy when we are dealing with the health care and lives of the most 
vulnerable in the country. I am worried that this body is being asked 
to hand over one of the most popular Government programs in history to 
private insurance companies. I have been down this tortured road before 
during my 51-year tenure in Congress. My constituents and others around 
the Nation are reeling from public programs that have been turned over 
to the so-called free market. Utility rates, cable rates, airline 
rates, you name it, the free market has ensured exorbitant prices with 
diminished service. Pensions and retirement security have taken a 
similar beating.
  So here we are again, this time being presented with a rosy scenario 
about how private industry competition will improve the Medicare 
program. The rhetoric is familiar: increased competition, lower costs, 
and greater services will be provided. Yes, the rhetoric is familiar, 
but so is the reality. This scheme will not deliver what it promises.
  I fear that we are going to wind up with a patchwork across the 
country of differing coverages, differing plans, differing copays and 
differing premiums. No senior will know for sure what they can count 
on.
  Analysis of the GOP Medicare bill estimates that 31,000 Medicare 
beneficiaries in West Virginia will lose their retiree health benefits 
as a direct result of this package. Nearly 45,000 Medicaid 
beneficiaries in West Virginia will pay more for the prescription drugs 
they need. As many as 27,700 fewer seniors in West Virginia will 
qualify for low-income protections because of the assets test and lower 
qualifying income levels. More than 7,500 Medicare beneficiaries in 
West Virginia will pay more in Medicare premiums because of income 
means-testing.
  Let's slow down and take a better look at this legislation and the 
unintended consequences. We need more time to explain this plan to our 
elderly citizens. Don't we need their feedback? I doubt that our 
Nation's seniors will be excited about accepting a bill that poisons 
the well. Seniors will likely want no part of it--especially when they 
see how it will undermine the rest of Medicare down the road. Just like 
they did almost 15 years ago, they may revolt, and Members of Congress 
could be back here scratching their heads and scrambling to find a 
solution and save their seats.
  This bill fails our seniors. It sells senior citizens out in exchange 
for big profits for prescription drug companies. America's senior 
citizens and disabled citizens deserve more than some new hocus-pocus 
scheme that leaves them naked to the whims of private insurance 
companies, and offers only a new-you-see-it, now-you-don't promise of 
coverage. Instead of selling illusions, Congress ought to go back to 
work and settle on a good, comprehensive, voluntary Medicare 
prescription drug benefit.
  Let's not shortchange our seniors. We owe them much, much better.
  Mr. CHAMBLISS. Mr. President, I rise today to voice my concerns with 
the conference agreement on H.R. 1, the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003.
  My original intentions were to work with this body to create and 
provide a fiscally responsible prescription drug benefit for seniors 
who are in need. My primary responsibility and obligation through this 
process was to make sure that Medicare beneficiaries with the lowest 
monthly income and the highest monthly drug bill were taken care of. 
That obligation has been fulfilled by this agreement.
  This bill will provide almost 1 million Georgia seniors with 
completely voluntary access to a Medicare prescription drug benefit for 
the first time in the history of the Medicate program. Starting next 
year, low-income seniors will get drug cards that provide $600 worth of 
assistance for prescription drugs. Seniors will be covered with access 
to an initial physical and other new preventive benefits such as 
cholesterol and diabetes screenings. This legislation creates new 
Health Savings Accounts, HSAs, to pay for qualified medical expenses, 
available to all beneficiaries with contributions allowed from 
employers and family members.
  Beginning in 2006, all Medicare beneficiaries will be eligible to get 
prescription drug coverage though a Medicare-approved plan. In exchange 
for a monthly premium of about $35, seniors who are now paying full 
retail price for prescription drugs will be able to cut their drug 
costs roughly in half. Lower-income seniors could qualify for more 
generous benefits, including reduced premiums, lower deductibles and 
coinsurance, with no gaps in coverage.
  With Medicare beneficiaries receiving access to a prescription drug 
benefit, Medicare instead of Medicaid will be assuming the prescription 
drug cost of roughly 172,000 beneficiaries in Georgia. This could equal 
$469 million in added savings over the next eight years for the State 
of Georgia.
  The bill also would increase Medicare funding for doctors, hospitals 
and other health care providers, particularly in rural areas, where 
reimbursement levels are far below what is paid in urban areas of the 
country. Additionally, the bill provides cost incentive to encourage 
companies to retain the health coverage they provide their retirees. I 
want to voice my support for all of these provisions.
  Following my review of the conference report, however, I can't help 
but feel that this is not the best we could do. I feel like we missed 
the mark on trying to ensure Medicare's solvency. While we are trying 
to ensure that prescription drug coverage is provided for those seniors 
who need them, we should also ensure that future generations are not 
overburdened by the costs of this expanded entitlement program.
  Attempts to cap the bill's cost have been diluted. Instead of putting 
cost containment provisions in the legislation, there is a vague 
transfer of power from today's lawmakers to future lawmakers to handle 
the cost when it becomes a problem. In 2007, the Congressional Budget 
Office has estimated that the bill will cost $40.2 billion. By 2013, 
that price tag hits $65.2 billion. I am not comfortable leaving these 
problems to be dealt with in the future. If we cannot logically solve 
them now, how do we expect future Congresses to tackle cost containment 
while this program is spiraling out of control?
  Helping today's seniors with access to prescription drugs must be 
balanced with our responsibility to future generations, our own 
children and grandchildren. These generations will have to pay, 
literally, for our miscalculations. They will be able to look back and 
see clearly when and where we made mistakes. Today, future generations 
are a main concern of mine because I think this bill lacks some common 
sense regarding fiscal restraint. It

[[Page S15750]]

has the potential to expand our budget deficit for years to come. 
Placing the cost burden of an entitlement program on the shoulders of 
our children's generation seems very unfair. Shouldn't it be possible 
for this legislative body to create a prescription drug benefit plan 
that is fiscally responsible? Have we successfully done this? With a 
cost containment trigger we could have done just that and we have 
missed the opportunity.
  In addition to the looming fiscal problems of this measure, I am also 
very concerned with cuts for the reimbursement of drugs for cancer 
treatment. Community oncology practices in Georgia and nationwide will 
be at risk of closing their doors because of these cuts. When 
approximately 1.4 million people are diagnosed with new cases of cancer 
each year and approximately 550,000 people die from cancer each year, 
why are we decreasing these drug reimbursements?
  Our small town pharmacists may also experience financial risk as a 
result of the passage of this bill. They play a fundamental role in 
delivering these benefits to our seniors. Pharmacy Benefit Managers, 
PBMs, should be required to report all financial concessions they 
receive from manufacturers such as discounts, rebates, and indirect 
subsidies and should be audited to ensure accountability. I want to 
ensure that these pharmacists will be able to compete on the same level 
as the PBMs and purchasing by mail so that they can continue serving 
their patients. We also need to acknowledge and protect the role of 
medication counseling services provided by our pharmacists as this is a 
valuable benefit to the patient.
  Another concern is the lack of flexibility within the Medicare 
program. Competition among private healthcare plans in Medicare will 
help ensure more up-to-date coverage and gives seniors the ability to 
choose the healthcare plan that best meets their personal health needs 
rather than a one-size-fits-all government plan. A Medicare-approved 
private healthcare plan needs flexibility in designing benefits so that 
seniors can have the option to choose the coverage that makes the most 
sense to them and best suits their health needs. Seniors deserve choice 
and flexibility within their benefits, and this bill does not give 
seniors the full extent of flexibility they deserve.

  Lastly, the means testing provisions included in this bill are 
positive but are not strong enough. Our goal should be to help those 
seniors who cannot afford life saving drugs and currently have to make 
the difficult choice between putting food on their table and buying the 
prescriptions they need. We should not waste taxpayer money on 
subsidizing wealthy seniors who can easily afford to pay for their own 
medicines.
  Individuals who fall into the category of 150 percent of Federal 
poverty level or those with a total income of $13,470 or less will 
receive great benefits. However, the gaps in coverage for the middle 
class will make this legislation somewhat effective or possibly even 
more costly for certain beneficiaries. Protecting those most in need is 
imperative, but we cannot sacrifice those folks that fall in the 
middle.
  The decisions we will make today by voting for this measure will 
affect the health of every American and significantly impact future 
taxing and spending of generations to come. I stand before you today 
burdened by trying to make the best decision for America's seniors, for 
Medicare solvency, and for the financial security of our children and 
their future generations.
  This bipartisan agreement is a necessary step to completing the 
promise we made to seniors, and that is to provide prescription drug 
coverage. It is for this reason only that I will vote for this 
conference report, but I will continuously seek ways to improve this 
program by seeking stronger cost containment provisions and increasing 
the flexibility for the plans.
  Thank you, Mr. President. I yield the floor.
  Mr. KOHL. Mr. President, I rise today to oppose the Medicare 
conference report. Once again, the Senate is on the verge of passing a 
bill that is good for everyone--except the people the bill is supposed 
to help. Our Nation's seniors rely on Medicare and are asking for 
Congress' help with a real Medicare drug benefit. This bill doesn't 
give it to them. Instead, it is a dream package for drug companies, 
insurance companies, and the people who make TV ads for politicians. 
And it is a nightmare for too many Medicare beneficiaries.
  Our elderly and disabled citizens rely on Medicare. They know it and 
they are comfortable with it. They know it will cover most of their 
health care needs whether they're healthier or sicker, middle class, 
affluent, or low income.
  For years now our seniors have asked us to add a prescription drug 
benefit to Medicare to help them pay for the costs of their medication. 
It is a simple, straight-forward request that this bill meets with a 
confusing, costly, and damaging response. The bill changes Medicare 
from the reliable, popular program that has worked for seniors since 
1965 to a Government subsidy program for private insurance companies.
  The bill fundamentally changes the nature of Medicare. Instead of 
enhancing the current guaranteed benefit under Medicare with 
prescription drug coverage, the bill allocates billions to insurance 
companies to entice them to serve Medicare beneficiaries. In fact, the 
companies will be paid more than it costs traditional Medicare to cover 
seniors. And on top of that, there is a new $12 billion slush fund to 
beg them to enter the program.
  And what will these insurance companies do with this extra money? 
They will design their plans to attract the healthiest, wealthiest 
seniors--and leave poorer, sicker seniors in traditional Medicare 
facing higher costs.
  This is no small point. Medicare has worked for decades because it is 
a universal, reliable program. People believe in it, and it has worked 
well for them. But this bill, which was supposed to simply add a new 
prescription drug benefit, instead changes Medicare to a new system of 
winners and losers.
  This fundamental weakening of the Medicare system is bad enough, but 
even worse is the process by which Congress is considering the changes. 
The conference report was put together by a small group behind closed 
doors. It is over a thousand pages long and is extremely complicated. 
But we're being given only four days to read and digest this massive 
bill--this massive shift in the way we provide health care to our 
seniors.
  Why are we rushing to vote? Are we afraid of seniors learning the 
truth about what's really in this bill? This bill makes the most 
sweeping changes to Medicare since its creation, and we have barely had 
time to examine it. Our seniors deserve more than a cursory glance and 
crossed fingers that everything will work out.
  Our seniors also deserve a real prescription drug benefit that gets 
the best prices for their medication. But this bill actually prohibits 
the Federal Government from negotiating with drug companies for lower 
prices. What a huge missed opportunity. What a waste of taxpayers' 
dollars. We could have used the tremendous purchasing power of the 41 
million Medicare beneficiaries to make sure that prices are fair. 
Instead, this bill is a windfall for the drug industry. Just look at 
drug companies' stocks shooting up over the last few days; it is clear 
who the winners under this bill are.
  The drug benefit itself is far less generous than seniors expect and 
deserve--and for many seniors, it will do more harm than good. Many 
seniors will still be responsible for most of their drug costs. Those 
with drug costs below $810 a year will actually pay more than they do 
today if they sign up for the drug benefit. Seniors with drug costs of 
$5,000 will still pay almost $4,000 themselves--almost 80 percent of 
the bill. There is a giant hole in the drug benefit--a gap in coverage 
where seniors continue to pay their monthly premiums but get absolutely 
no help from Medicare with their drug bills. I voted against the 
original Senate bill in part because of this gap. Now instead of 
closing the gap in conference, this bill actually doubles its size.
  Even worse, this bill will cause many retirees who already have good 
drug coverage through their former employers to lose it. According to 
the Congressional Budget Office, 2.7 million seniors nationwide could 
lose their current coverage, including as many as 60,000 in Wisconsin. 
These seniors

[[Page S15751]]

worked hard to earn retiree health coverage. That coverage will now be 
in jeopardy.
  In addition, while there is additional help for some low-income 
beneficiaries, millions of poorer seniors will be worse off because of 
this bill. Up to 6 million seniors who are eligible for both Medicare 
and Medicaid--the poorest of the poor--will have higher costs. Up to 
110,000 dually eligible seniors in Wisconsin could be affected. In 
addition, the bill cuts out the extra help for millions of low-income 
seniors if they fail a restrictive asset test.
  There are some good things in this bill. It includes an increase in 
Medicare payments to Wisconsin that will finally begin to level the 
playing field for Wisconsin's doctors, hospitals, and seniors. I am 
pleased that this was included.
  I know there are some who say we can't afford to wait for a perfect 
bill. But I believe that this bill is not just far from perfect--it 
will actually do harm to many of our seniors and will waste billions of 
taxpayer dollars in a giveaway to the insurance industry and drug 
companies.
  This drug benefit is nowhere close to what seniors have asked us to 
deliver. They wanted to pay less for their prescription drugs. We could 
have done tremendous good here. We could have brought the price of 
drugs down using bulk purchasing through Medicare, greater use of 
generic drugs, and allowing seniors to purchase less expensive drugs 
from Canada. Instead, we have a complicated and skimpy drug benefit, 
huge subsidies to drug and insurance companies, and a sea change in the 
Medicare Program. This is not what seniors asked for, and they will not 
be fooled. When they learn the details of this bill, they will rightly 
revolt.
  There are those who say we have to pass this bill today because we'll 
never have another chance. That is ridiculous. We have only had four 
days to look at this 1,000-page bill. We haven't had any time to go 
back home and discuss this with out constituents. How can we represent 
the seniors in our States when not one of them has had a chance to see, 
digest or comment on this bill.
  This bill doesn't even go into effect until 2006, so why the rush to 
pass it today? With a mere 4 days of study, we are about to enact 
historic, sweeping changes to Medicare. The people we represent deserve 
a much more serious effort.
  I do not believe that this bill is our last and only chance. If this 
bill is defeated, we can't and won't give up on a real, effective and 
smart prescription drug benefit in Medicare. We can't and won't turn 
our backs on doctors, hospitals and health care providers. We can do 
better if we have the will and the courage to do it.
  Mr. KENNEDY. Mr. President, I rise today to say a few words about 
Section 1101(d), a provision of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 relating to the Hatch-Waxman 
Act and the authority of Federal courts to entertain actions for 
declaratory judgments. This provision originally was added in the 
Senate, as part of the Greater Access to Affordable Pharmaceuticals 
Act, and formed Section 702(c) of S. 1, the bill passed by the Senate. 
I will discuss today some of the changes made to this subsection in 
conference, and what this provision is intended to accomplish.
  Lower Federal courts typically have required that a declaratory 
judgment plaintiff satisfy the ``reasonable apprehension test'' before 
being allowed to bring declaratory judgment actions in Federal court.
  Section 1101(d) provides that, so long as a generic drug company has 
filed an Abbreviated New Drug Application, ANDA, and the patentee has 
not filed suit within 45 days of receiving notice, ``the courts of the 
United States shall, to the extent consistent with the Constitution, 
have subject matter jurisdiction in any action * * * for a declaratory 
judgment that such patent is invalid or not infringed.'' This 
subsection will provide relief to alleged patent infringers--at least 
in the Hatch-Waxman context--in several ways.
  First, this language sweeps away the type of discretionary barriers 
to a declaratory judgment action imposed in decisions such as EMC Corp. 
V. Norand Corp. The Federal Circuit in that case found that the 
district court actually had jurisdiction to entertain a declaratory-
judgment suit. It nevertheless allowed the district court to dismiss 
the action, holding that district courts may do so unless ``there is no 
real prospect of non-judicial resolution of the dispute.'' The Federal 
Circuit apparently felt that a patentee should be able to use what may 
prove to be an invalid patent as a source of ``bargaining power'' in 
license negotiations.
  This refusal to entertain a litigant's action where jurisdiction 
unquestionably exists is, of course, at odds with the rule, announced 
182 years ago in Cohens v. Virginia, that the Federal courts ``have no 
more right to decline the exercise of jurisdiction which is given, than 
to usurp that which is not given.'' Blame for this practice, however, 
cannot entirely be laid at the feet of the Federal Circuit. The Supreme 
Court, in the 1995 Wilton v. Seven Falls Company case, affirmed that 
Federal courts have ``unique and substantial discretion in deciding 
whether to declare the rights of litigants.'' Wilton identified two 
sources of this discretion: it found a ``textual commitment to 
discretion'' in the  Declaratory Judgment Act, emphasizing the act's 
use of the word ``may.'' And it noted the courts' history of 
recognizing discretion to decline declaratory-judgment actions.

   Section 1101(d) directly sweeps away the type of discretion allowed 
in the EMC Corp. case. First, and most importantly, it replaces the 
word ``May''--the textual source of the discretion identified in Wilton 
and EMC Corp.--with the word ``shall.'' Second, simply by creating a 
new source of authority to entertain declaratory judgments in the 
Hatch-Waxman context, section 1101(d) disentangles such actions from 
the tradition of discretion associated with the Declaratory Judgment 
Act. Armed with the word ``shall,'' this new section starts afresh, 
with no reason to be exempted from the usual (Colorado River) rule that 
Federal courts have a ``virtually unflagging obligation * * * to 
exercise the jurisdiction given them.'' With this new provision, 
generic-drug companies never will be denied access to a declaratory 
judgment action on the basis of pending or potential license 
negotiations, at least so long as the suit otherwise is 
constitutionally sufficient for presentation in an Article III court.
   This last matter--when the case or controversy requirement for a 
declaratory judgment action is satisfied--is the subject of the second 
major aspect of section 1101(d). I and other Senate proponents of this 
subsection believe that the reasonable-apprehension test demands more 
than is required by the constitutional case-or-controversy requirement. 
We are fortified in this view by two letters received by the committee 
of jurisdiction from Professor John Yoo. Rather than repeat all of 
Professor Yoo's analysis, I will simply include his letters at the 
conclusion of my remarks. As Professor Yoo notes in his first letter, 
the reasonable-apprehension test is ``[not] demanded by the Supreme 
Court's interpretation of the Declaratory Judgment Act.'' He suggests 
that the test may be viewed as an exercise of the court's discretionary 
power.
   Section 1101(d) shifts the focus of a court's inquiry to whether the 
requirements of Article III are satisfied. In deciding when a Hatch-
Waxman declaratory judgment suit may meet the requirements of Article 
III, the courts should focus on the actual components of the case-or-
controversy requirement. In the 1998 Steel Company decision, the 
Supreme Court reiterated that the ``triad of injury in fact, causation, 
and redressability constitutes the core of Article III's case-or-
controversy requirement.'' In setting the constitutional standard for 
allowing declaratory judgments, the Supreme Court in its 1937 Aetna 
Life Ins. v. Haworth decision focused on the dispute's adverseness, 
definiteness, concreteness, and the specificity of the claims. this 
language inevitably invokes the injury-in-fact element of the Article 
III standing inquiry. It is from the injury-in-fact case law--which 
asks whether an injury is concrete and particularized, and actual or 
imminent--that the courts might draw new standards for a 
constitutionally adequate case or controversy in the declaratory 
judgment context.
   It thus bears mention that the Supreme Court has not hesitated to 
find

[[Page S15752]]

actual Article III injury where a plaintiff forewent a legally 
cognizable benefit as a result of being actually and reasonably 
deterred from particular conduct. Just 3 years ago, for example, the 
court held that even where a defendant's environmental discharges 
caused no harm to the environment, environmentalist plaintiffs had 
standing where their ``reasonable concerns about the effects of those 
discharges, directly affected [their] recreational, aesthetic, and 
economic interests.'' And in 1979's Babbit v. United Farm Workers, the 
court found that plaintiffs deterred from constitutionally protected 
conduct had standing to challenge the offending statute where the 
threat of its enforcement was ``not imaginary or wholly speculative.'' 
The Court further specified that the plaintiffs were ``not without some 
reason in fearing prosecution'' where ``the State has not disavowed an 
intention'' of enforcement, a fact that rendered the positions of the 
parties ``sufficiently adverse, * * * to present a case of controversy 
within the jurisdiction'' of the Federal courts. And--closer to the 
context of a section 1101(d) plaintiff--the court has inquired, when 
evaluating commercial plaintiffs standing in 1975's Warth v. Seldin, 
whether the defendant's actions ``delayed or thwarted any project 
currently proposed.''

  I would also note that some courts have applied case-or-controversy 
tests in the declaratory judgment context that, in their standards and 
focus, are not dissimilar from what is suggested by the Supreme Court's 
injury-in-fact caselaw. For example, in the 1974 case Blessings Corp. 
v. Altman, the district court for the Southern District of New York 
held that ``any lingering possibility of an infringement charge is 
sufficient to support the finding of an actual controversy so long as 
the plaintiff can demonstrate some actual harm to its business.'' 
Similarly, in the 1986 case Research Institute v. Wisconsin Alumni, the 
district court for the Western District of Wisconsin concluded that ``a 
perceived threat of infringement is real''--and would satisfy Article 
III requirements--so long as ``it would be a substantial factor for 
most business people in their choice to proceed in one direction and 
not in another.''
  Congress, of course, does not presume that any of these cases sets 
the proper case-or-controversy standard in the context of a patent-
infringement declaratory judgment action, or that 1970s standing 
decisions still are good law. Nevertheless, these cases do at least 
suggest the proper focus of inquiry: whether the would-be patent 
challenger has been reasonably and actually deterred from undertaking a 
profitable enterprise.
  Finally, should the courts be unwilling to wholly abandon the 
reasonable apprehension test for purposes of analyzing the requirements 
of Article III, the conferees have left them options short of striking 
down section 1101(d). Unlike the Senate bill, the conference report 
does not gamble all on the hope that courts will find the filing of an 
ANDA--which automatically constitutes an act of infringement--to always 
qualify as a constitutionally adequate case or controversy. The final 
act leaves the courts with options short of striking down section 
1101(d), if more is required. By including the language ``to the extent 
consistent with the Constitution,'' the conferees have allowed the 
courts to import as much of the reasonable-apprehension test as they 
feel is constitutionally necessary. As the report language makes clear, 
this may include the entire reasonable-apprehension test as currently 
construed by the Federal Circuit. As Federal Circuit Judge Gajarsa 
observed in his concurrence in the Minnesota Mining case, that test 
will ordinarily be satisfied in declaratory judgment actions brought by 
ANDA applicants with respect to patents listed in the Orange Book. In 
any event, the courts should impose prerequisites to seeking 
declaratory relief--whether reasonable apprehension, the standing tests 
suggested here, or any other requirements--only ``to the extent 
required by the Constitution.''
  I ask unanimous consent that two letters from Professor Yoo be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         Boalt Hall School of Law, University of California at 
           Berkeley,
                                      Berkeley, CA, June 14, 2003.
     Hon. Orrin G. Hatch,
     Chairman, Committee on the Judiciary,
     U.S. Senate, Washington, DC.
       Dear Senator Hatch: I have been asked by the Generic 
     Pharmaceutical Association to provide my views concerning the 
     constitutionality of a proposed amendment to the Hatch-Waxman 
     Act. The amendment would allow a generic drug manufacturer 
     who has filed an abbreviated new drug application (ANDA) to 
     seek federal declaratory relief against potential patent 
     infringement claims. It is my opinion that this provision is 
     clearly constitutional.
       Let me begin with a note of introduction. I have long 
     worked on separation of powers issues involving the courts. 
     It was my great honor to have served as the General Counsel 
     to this Committee under your Chairmanship from 1995-96. I 
     also recently served as Deputy Assistant Attorney General in 
     the Office of Legal Counsel of the Department of Justice, 
     which is charged in part with advising the executive branch 
     on the constitutionality of proposed legislation. I have 
     clerked for Judge Laurence Silberman of the U.S. Court of 
     Appeals for the D.C. Circuit and for Justice Clarence Thomas 
     of the U.S. Supreme Court. I am currently a visiting fellow 
     at the American Enterprise Institute and a professor of law 
     at the Boalt Hall School of Law, University of California at 
     Berkeley, where I have taught and written in the fields of 
     constitutional law, the separation of powers, and civil 
     procedure since 1993. The conclusions expressed here are my 
     own, and do not represent the views of the American 
     Enterprise Institute or the University of California.
       In order to evaluate the constitutionality of the proposed 
     changes, it is necessary to first understand the statutory 
     framework at issue. Under the Federal Food, Drug, and 
     Cosmetic Act, a pharmaceutical company that seeks to 
     manufacture a new drug must file a new drug application (NDA) 
     with the FDA that includes information about the drug's 
     safety and effectiveness. 21 U.S.C. Sec. 355(a). The NDA must 
     also include a list of patents upon which the drug is based. 
     If the FDA approves the NDA, it publishes the drug and the 
     patents in the Approved Drug Products with Therapeutic 
     Equivalence Evaluations (``the Orange Book'').
       The Hatch-Waxman amendments created a streamlined process 
     for the FDA to review applications by drug manufacturers to 
     produce generic versions of drugs previously approved by the 
     NDA process. Under an ANDA, a generic producer may rely in 
     part on the NDA of the pioneer manufacturer by showing 
     bioequivalence with the NDA-approved drug. 21 U.S.C. 
     Sec. 355(j)(2)(A). Under Hatch-Waxman, it is not patent 
     infringement to conduct actions necessary to prepare an ANDA, 
     35 U.S.C. Sec. 271(e)(1), but it is infringement to file the 
     ANDA itself before the expiration of the patents that include 
     the pioneer drug, id. Sec. 271(e)(2). An ANDA applicant must 
     make one of four certifications as to the patents listed in 
     the Orange Book for the pioneer drug it seeks to manufacture: 
     i) no patent information has been submitted to the FDA; ii) 
     the patent has expired; iii) the patent will expire on a 
     specific date; iv) the patent is invalid and will not be 
     infringed by the generic drug.
       When an ANDA makes the fourth certification, known as a 
     Paragraph IV certification, the applicant must give notice to 
     the patent holder and explain why the patent is invalid, 
     unenforceable, or not infringed. 21 
     U.S.C.Sec. 355(j)(2)(B)(i). The patent holder may sue for 
     infringement within the next 45 days, id. 
     Sec. 355(j)(5)(B)(iii), and if it does, the FDA may not 
     approve the ANDA application until the courts have ruled on 
     the suit, the relevant patents have expired, or thirty months 
     have passed from the time of the original notice. Id. During 
     that 45-day period, ``no action may be brought under section 
     2201 of Title 28 [the Declaratory Judgment Act], for a 
     declaratory judgment with respect to the patent.'' Id.
       The proposal before you would make clear what this last 
     provision already implies. It would recognize that ``an 
     actual controversy'' between an ANDA filer and a patent 
     holder would exist ``sufficient to confer subject matter 
     jurisdiction in the courts of the United States'' if, after 
     45 days have passed since the ANDA has been filed, the patent 
     holder chooses not to bring a patent infringement action. I 
     do not believe that this provision poses constitutional 
     problems; in fact, it merely clarifies the proper application 
     of existing law.
       To understand why, it is necessary to review the 
     Declaratory Judgment Act and its interaction with patents. 
     Article III, Section 2 of the Constitution allows federal 
     courts to exercise jurisdiction only over the enumerated list 
     of cases or controversies. U.S. Const. art. III, Sec. 2 
     (listing cases or controversies). As Marbury v. Madison made 
     clear, federal courts are courts of limited subject matter 
     jurisdiction. For many years, it was uncertain whether 
     declaratory judgment actions fell within the definition of an 
     Article III case or controversy. Federal jurisdiction 
     certainly extends to cases in which a plaintiff is entitled 
     to a coercive remedy based on federal law. Substantial 
     hardship arises, however, in cases involving ``an actual 
     dispute about the rights and obligations of the parties, 
     and yet the controversy may not have ripened to a point at 
     which an affirmative remedy is needed. Conversely, this 
     stage may have been reached, but the party entitled to 
     seek the remedy may fail to take the

[[Page S15753]]

     necessary steps.'' C. Wright & A. Miller, Federal Practice 
     and Procedure Sec. 2751. In the area of patents, ``the 
     owner of a patent might assert that a manufacturer was 
     infringing the owner's monopoly, while the latter 
     contended that his product was not an infringement or that 
     the patent was invalid. The manufacturer was helpless, 
     however, to secure an adjudication of the issue, but had 
     to await suit for infringement, unless the manufacturer 
     preferred to yield and discontinue the activity.'' Id.
       Declaratory judgments acts first arose in the states, but 
     uncertainty initially remained as to whether such cases could 
     be heard in federal courts due to the case or controversy 
     requirements of Article III of the Constitution. Willing v. 
     Chicago Auditorium Ass'n, 277 U.S. 274 (1928). In 1927, 
     however, the Court gave res judicata effect to a state 
     declaratory judgment, Fidelity Nat'l Bank & Trust Co. v. 
     Swope, 274 U.S. 123 (1927), and in 1933 it upheld a state 
     court declaratory judgment, Nasville, C. & St. L. Ry. v. 
     Wallace, 288 U.S. 249 (1933). Immediately after Wallace, 
     Congress enacted the Declaratory Judgment Act: ``In a case of 
     actual controversy within its jurisdiction, . . . any court 
     of the United States, upon the filing of an appropriate 
     pleading, may declare the rights and other legal relations of 
     any interested party seeking such declaration, whether or not 
     further relief is or could be sought. Any such declaration 
     shall have the force and effect of a final judgment or decree 
     and shall be reviewable as such.'' Act of June 14, 1934, ch. 
     512, 48 Stat. 955, codified at 28 U.S.C. Sec. 2201(a). In 
     essence, this act allows plaintiffs to bring suit against a 
     defendant who would hold a federal right to seek a coercive 
     remedy against the plaintiff, if the defendant had chosen to 
     bring suit first. The legislative history of the Act reflects 
     that Congress was concerned about the uncertainty in business 
     and legal relations, including the case in which a patent 
     holder chose to delay litigation for patent infringement.
       The Supreme Court soon made clear that the Declaratory 
     Judgment Act was constitutional, even though the statute 
     extended federal jurisdiction to cases in which the holder of 
     the federal right had not yet sought to enforce his 
     federal right. Finding that declaratory judgment suits met 
     Article III's case or controversy requirement, the Court 
     explained: ``The Declaratory Judgment Act of 1934, in its 
     limitation to `cases of actual controversy,' manifestly 
     has regard to the constitutional provision and is 
     operative only in respect to controversies which are such 
     in the constitutional sense. The word `actual' is one of 
     emphasis rather than of definition. Thus the operation of 
     the Declaratory Judgment Act is procedural only. In 
     providing remedies and defining procedure in relation to 
     cases and controversies in the constitutional sense the 
     Congress is acting within its delegated power over the 
     jurisdiction of the federal courts which the Congress is 
     authorized to established. . . . Exercising this control 
     of practice and procedure the Congress is not confined to 
     traditional forms or traditional remedies.'' Aetna Life 
     Insurance Company v. Haworth, 300 U.S. 227, 240-41 (1937). 
     In explaining more precisely why the Declaratory Judgment 
     Act did not include cases that were actually unripe or 
     moot, Chief Justice Hughes wrote: ``A `controversy' in the 
     sense must be one that is appropriate for judicial 
     determination. . . . A justiciable controversy is thus 
     distinguished from a difference or dispute of a 
     hypothetical or abstract character; from one that is 
     academic or moot. . . . The controversy must be definite 
     and concrete, touching the legal relations of parties 
     having adverse legal interests. . . . It must be real and 
     substantial controversy admitting of specific relief 
     through a decree of a conclusive character, as 
     distinguished from an opinion advising what the law would 
     be upon a hypothetical state of facts. . . . Where there 
     is such a concrete case admitting of an immediate and 
     definitive determination of the legal rights of the 
     parties in an adversary proceeding upon the facts alleged, 
     the judicial function may be appropriately exercised 
     although the adjudication of the rights of the litigants 
     may not require the award of process or the payment of 
     damages. . . . And as it is not essential to the exercise 
     of the judicial power that an injunction be sought, 
     allegations that irreparable injury is threatened are not 
     required.'' Id. at 240-41. In the wake of Aetna, the lower 
     courts regularly assumed jurisdiction over declaratory 
     judgment suits by an alleged patent infringer for a 
     declaration of non-infringement or patent invalidity, 
     because the declaratory defendant could have brought a 
     federal action against the declaratory plaintiff. Edelamnn 
     & Co. v. Triple-A Specialty Co., 88 F.2d 852 (7th Cir. 
     1937). In passing, the Supreme Court has approved this 
     exercise of jurisdiction because a patent infringement 
     suit by the declaratory defendant would have fallen with 
     the Article III ``arising under'' jurisdiction. See 
     Franchise Tax Board of California v. Construction Laborers 
     Vacation Trust, 463 U.S. 1, 20 n. 19 (1983); Graham v. 
     John Deere Co, 383 U.S. 1 (1966).
       In light of these cases, it should be clear that Congress 
     intended that potential patent infringers be able to seek a 
     declaration of non-infringement, unenforceability, 
     or invalidty of a patent. Further, the Supreme Court and 
     the lower federal courts have interpreted the Declaratory 
     Judgment Act to allow these suits, and they have also 
     found such suits to fall within Article III's case or 
     controversy requirement. The proposal before you clearly 
     falls within the scope of the Declaratory Judgment Act. A 
     generic drug company wishes to manufacture and sell a 
     substance that mimics a pioneer drug for which patents are 
     listed in the Orange Book. The enforcement of the patent 
     could prevent the generic drug company from producing and 
     selling its product, nullifying its investments in 
     research and production, and potentially subjecting any 
     profits to the uncertainty of a future lawsuit. In filing 
     an ANDA, the generic drug company declares its intention 
     and ability to produce the drug, which renders the dispute 
     anything but hypothetical. The Hatch-Waxman amendments 
     even find an ANDA filing to constitute patent 
     infringement. Were the pioneer drug company to bring a 
     patent infringement action, the case clearly would fall 
     within Article III's arising under jurisdiction.
        It is my view that such actions, as recognized by the 
     proposed amendment before you, would fall within the proper 
     application of the Declaratory Judgment Act and, as 
     interpreted by the Supreme Court and the lower federal 
     courts, within the Constitution's requirements for an actual 
     case or controversy. As the Supreme Court explained in Aetna, 
     ``[t]he controversy must be definite and concrete, touching 
     the legal relations of parties having adverse legal 
     interests. . . . It must be a real and substantial 
     controversy admitting of specific relief through a decree of 
     a conclusive character, as distinguished from an opinion 
     advising what the law would be upon a hypothetical state of 
     facts.'' 300 U.S. at 240-41. Here, there are clear adverse 
     legal interests between the pioneer drug manufacturer and the 
     generic drug manufacturer over the validity and application 
     of a patent. The generic drug manufacturer has invested a 
     substantial amount of resources to file an ANDA and to 
     prepare and manufacture the generic drug; that investment 
     could be lost through a patent infringement action brought by 
     the pioneer drug company. It is difficult to conceive of a 
     setting in which application of the Declaratory Judgment Act 
     would not be more appropriate. Indeed, the proposal before 
     you strikes me as simply a restatement of the proper 
     interpretation of current law.
        Some might argue, however, that the proposal could raise 
     constitutional concerns under the case law of the U.S. Court 
     of Appeals for the Federal Circuit. The Federal Circuit has 
     developed a two-part test to determine whether a potential 
     patent infringer's suit lies properly within the Declaratory 
     Judgment Act: ``First, the plaintiff must actually produce or 
     be prepared to produce an allegedly infringing product. 
     Second, the patentee's conduct must have created an 
     objectively reasonable apprehension on the part of the 
     plaintiff that the patentee will initiate suit if the 
     activity in question continues.'' EMC Corp. v. Norand Corp., 
     89 F.3d 807, 811 (Fed. Cir. 1996), cert. denied, 117 S. Ct. 
     789 (1997); see also Arrowhead Indus. Water, Inc. v. 
     Ecolochem, Inc., 846 F.2d 731, 736, (Fed. Cir. 1988). The 
     first prong is easily satisfied in ANDA declaratory judgment 
     actions: by conducting the research and expending the 
     resources necessary to complete an ANDA, the generic drug 
     manufacturer has shown it is prepared to produce the 
     allegedly infringing product. DuPont Merck Pharmaceutical Co. 
     v. Bristol-Myers Squibb Co., 62 F.3d 1397, 1401 (Fed. Cir. 
     1995).
       Whether an action will meet the Federal Circuit's second 
     prong will depend on the defendant's conduct. One might 
     argue, I suppose, that a pioneer drug producer's refusal to 
     initiate a lawsuit within the 45-day period could be taken as 
     a sign that there is no ``objectively reasonable 
     apprehension.'' This conclusion, however, seems doubtful to 
     me. The Federal Circuit clearly employs a totality of the 
     circumstances approach toward determining ``reasonable 
     apprehension,'' one that looks at conduct that falls far 
     short of simply filing a lawsuit. See Shell Oil Co. v. Amoco 
     Corp., 970 F.2d 885, 889 (Fed. Cir. 1992). In some cases, the 
     Federal Circuit has looked to the activity of the patent 
     holder in regard to third parties, Arrowhead, 846 F.2d at 
     736-39, express written or oral charges of infringement by 
     the patent holder, id. at 736; Shell Oil Co., 970 F.2d at 
     889, or a threat of a suit, BP Chems. Ltd. v. Union Carbide 
     Corp., 4 F.3d 975, 978 (Fed. Cir. 1993). The proposed 
     amendment would make clear that conduct that falls short of 
     filing a lawsuit is still sufficient to support a declaratory 
     judgment action by a generic drug manufacturer concerned 
     about potential patent infringement.
       In any event, even if one were to conclude that the 
     amendment is inconsistent with the Federal Circuit's two-
     prong test, this would not render the proposal 
     unconstitutional. First, it does not appear to me that the 
     Federal Circuit's approach is required by Article III of the 
     Constitution, nor is it demanded by the Supreme Court's 
     interpretation of the Declaratory Judgment Act. Indeed, the 
     very point of the Declaratory Judgment Act was to allow 
     parties concerned about the uncertainty in their business and 
     legal activities created by the holder of a federal cause of 
     action who refuses to sue. Nothing in the Supreme Court's 
     case law, which has consistently upheld the constitutionality 
     of the Declaratory Judgment Act, has suggested that a 
     declaratory defendant's failure to bring a lawsuit itself 
     within a certain time period eliminates the ``actual 
     controversy'' required by both the statute and the 
     Constitution. If anything, the case here is the reverse: it 
     is because the declaratory defendant has not brought a 
     lawsuit that a plaintiff must seek a federal declaratory 
     action.
       In this respect, it may be best to conceive of the Federal 
     Circuit's two-prong test as an exercise of its discretionary 
     powers under

[[Page S15754]]

     the Declaratory Judgment Act, rather than as a true test of 
     Article III justiciability. The Act itself states that a 
     court ``may declare the rights and other legal relations'' of 
     a party. 28 U.S.C. Sec. 2201 (emphasis added). The Supreme 
     Court has interpreted this language as allowing the federal 
     courts to decline to adjudicate a federal declaratory action 
     even if case or controversy jurisdiction exists. Public Serv. 
     Comm'n v. Wycoff Co., 344 U.S. 237, 241 (1952); Wilton v. 
     Seven Falls Co., 515 U.S. 277, 286-87 (1995). It seems to me 
     that the Federal Circuit's two-prong approach, which does not 
     derive directly from Article III or the Supreme Court's 
     interpretation of the Declaratory Judgment Act, therefore 
     should be seen as an exercise of the Federal Circuit's 
     discretionary authority. As such, it is clearly subject to 
     Congress's authority to set the rules of procedure that 
     govern the federal courts. Indeed, it is that same power that 
     the Supreme Court found to justify the constitionality of the 
     Declaratory Judgment Act itself. If Congress wishes to direct 
     the federal courts to adjudicate Declaratory Judgment Act 
     cases in certain circumstances, instead of declining as a 
     matter of prudence to exercise jurisdiction, that is its 
     prerogative. The proposed amendment may be seen as nothing 
     more than an effort to do just that.
       Even if the Federal Circuit's two-prong approach were 
     thought to be an interpretation of the Article III case or 
     controversy requirement, that would still not compel a 
     conclusion that the amendment is unconstitutional. The 
     Supreme Court has never passed on the Federal Circuit's 
     ``reasonable apprehension'' test, and in its earlier cases it 
     has approved more expansive approaches to jurisdiction under 
     the Declaratory Judgment Act. As an independent, coordinate 
     branch of government, Congress has the authority to make its 
     own judgments about the meaning of the Constitution. Congress 
     has the authority to refuse to enact legislation its believes 
     to be unconstitutional, even if the courts think otherwise, 
     and, conversely, it may pass legislation at odds with 
     previous Supreme Court decisions, as it did in the Religious 
     Freedom Restoration Act at issue in City of Boerne v. Flores. 
     To be sure, the Supreme Court has long made clear that 
     Congress does not have the authority to alter the boundaries 
     of the federal judicial power as established in Article III 
     of the Constitution. See Lujan v. Defenders of Wildlife, 504 
     U.S. 555 (1992). Nonetheless, Congress's authority to 
     interpret the Constitution, which is fundamental to the 
     separation of powers, certainly must include the ability to 
     reject lower court decisions in order to spark Supreme Court 
     review of whether these courts have properly interpreted 
     Article III of the Constitution. Of course, this may be 
     wholly unnecessary because the Federal Circuit has yet to 
     hold that the absence of a suit during the 45-day period is 
     sufficient per se to destroy an actual controversy in a 
     declaratory judgment act by a generic drug manufacturer.
       Please do not hesitate to contact me if I can provide 
     further assistance. I may be reached at 202-862-5819, or at 
     [email protected].
           Sincerely,
                                                         John Yoo,
     Professor of Law.
                                  ____

         Boalt Hall School of Law, University of California at 
           Berkeley,
                                     Berkeley, CA, August 1, 2003.
     Hon. Orrin G. Hatch,
     Chairman, Committee on the Judiciary,
     U.S. Senate, Washington, DC.
       Dear Senator Hatch: I have been asked by the Generic 
     Pharmaceutical Association to review the testimony provided 
     to your committee by the Department of Justice on August 1, 
     2003, concerning the constitutionality of the declaratory 
     judgment provisions of S. 1. The proposal would allow a 
     generic drug manufacturer who has filed an abbreviated new 
     drug application (ANDA) to seek relief under the federal 
     Declaratory Judgment Act, 28 U.S.C. Sec. 2201, against 
     potential patent infringement claims. This letter follows up 
     on my June 16, 2003 and June 19, 2003 letters to the Senate 
     Judiciary Committee and my congressional testimony of June 
     17, 2003 that concluded that the amendment in question is 
     constitutional.
       The Senate amendments to Hatch-Waxman would recognize that 
     ``an actual controversy'' between an ANDA filer and a patent 
     holder would exist ``sufficient to confer subject matter 
     jurisdiction in the courts of the United States'' if, after 
     45 days have passed since the ANDA has been filed, the patent 
     holder chooses not to bring a patent infringement action. 
     DOJ's letter asserts that this amendment would 
     unconstitutionally expand the jurisdiction of the federal 
     courts beyond the limits set by Article III of the 
     Constitution. I have reviewed DOJ's letter, and while I have 
     the utmost respect for the attorneys who work in the Office 
     of Legal Counsel (many of whom were my colleagues for the 
     last two years during my service there as a deputy assistant 
     attorney general), I disagree with their conclusion.
       Both the Justice Department and I agree that Congress 
     cannot expand the jurisdiction of the federal courts beyond 
     Article III's case or controversy requirement. This is a 
     principle of federal courts law that has existed ever since 
     Marbury v. Madison, 5 U.S. (1 Cranch) 137 (1803). We also 
     agree that the Declaratory Judgment Act is constitutional, 
     and has been so upheld by the Supreme Court in Aetna Life 
     Insurance Company v. Haworth, 300 U.S. 227 (1937). We also 
     agree that many cases filed after the 45-day period would 
     meet Article III's case or controversy requirement. In this 
     class of cases, therefore, the application of the Senate's 
     amendments to Hatch-Waxman would be clearly constitutional.
       Where the Justice Department and I differ is whether 
     Congress may extend federal subject matter jurisdiction to 
     the remaining class of cases filed after the 45-day period. 
     According to the Department, the Federal Circuit's 
     ``reasonable apprehension'' test--so called because the 
     plaintiff must have a reasonable apprehension that the 
     patient holder will sue--will exclude a certain number of 
     cases that are filed after the 45-day period. In fact, the 
     Department seems to believe that plaintiffs who file after 
     the 45 days will almost never satisfy this test, because 
     ``in light of the statutory benefit conferred on the 
     patent owner if it sues within the 45-day period, it is 
     likely that a court would consider the applicant's 
     reasonable apprehension to be diminished if the patent 
     holder does not sue for infringement within that time.'' I 
     believe that Congress may extend federal subject matter 
     jurisdiction to this class of cases, and that since this 
     category may not be large, the amendment to Hatch-Waxman 
     could not be unconstitutional on its face but only as 
     applied at best.
       I believe that the Justice Department's opinion is in error 
     because it does not properly understand why the Declaratory 
     Judgment Act is constitutional, even though it permits suits 
     to occur before the holder of the federal right has chosen to 
     bring a lawsuit. The Act allows plaintiffs to bring suit 
     against a defendant who would hold a federal right to seek a 
     coercive remedy against the plaintiff, if the defendant had 
     chosen to bring suit first. Declaratory judgments acts first 
     arose in the states, but it was initially suggested that such 
     cases could not be heard in federal courts due to the case or 
     controversy requirements of Article III of the Constitution. 
     Willing v. Chicago Auditorium Ass'n, 277 U.S. 274 (1928). In 
     1927, however, the Court gave res judicata effect to a state 
     declaratory judgment, Fidelity Nat'l Bank & Trust Co. v. 
     Swope, 274 U.S. 123 (1927), and in 1933 it upheld a state 
     court declaratory judgment, Nashville, C. & St. L. Ry. v. 
     Wallace, 288 U.S. 249 (1933). Immediately after Wallace, 
     Congress enacted the Declaratory Judgment Act: ``In a case of 
     actual controversy within its jurisdiction, . . . any court 
     of the United States, upon the filing of an appropriate 
     pleading, may declare the rights and other legal relations of 
     any interested party seeking such declaration, whether or not 
     further relief is or could be sought. Any such declaration 
     shall have the force and effect of a final judgment or decree 
     and shall be reviewable as such.'' Act of June 14, 1934, ch. 
     512, 48 Stat. 955, codified at 28 U.S.C. Sec. 2201(a).
       The legislative history of the Act shows that Congress was 
     concerned about the uncertainty in business and legal 
     relations, including the case in which a patent holder chose 
     to delay litigation for patent infringement. Professor Edson 
     R. Sunderland, and advocate of the Act, testified before 
     Congress that: ``I assert that I have a right to use a 
     certain patent. You claim that you have a patent. What am I 
     going to do about it? There is no way that I can litigate 
     my right, which I claim, to use that device, except by 
     going ahead and using it, and you [the patent holder] can 
     sit back as long as you please and let me run up just as 
     high a bill of damages as you wish to have me run up, and 
     then you may sue me for the damages, and I am ruined, 
     having acted all the time in good faith and on my best 
     judgment, but having no way in the world to find out 
     whether I had a right to use that device or not.''
       The Supreme Court soon made clear that the Declaratory 
     Judgment Act was constitutional, even though the statute 
     extended federal jurisdiction to cases in which the holder of 
     the federal right had not yet sought to enforce it. Finding 
     the declaratory judgment suits met Article III's case or 
     controversy requirement, the Court explained: ``The 
     Declaratory Judgment Act of 1934, in its limitation to `cases 
     of actual controversy' manifestly has regard to the 
     constitutional provision and is operative only in respect to 
     controversies which are such in the constitutional sense. The 
     word `actual' is one of emphasis rather than of definition. 
     Thus the operation of the Declaratory Judgment Act is 
     procedural only. In providing remedies and defining procedure 
     in relation to cases and controversies in the constitutional 
     sense the Congress is acting within its delegated power over 
     the jurisdiction of the federal courts which the Congress is 
     authorized to established. . . . Exercising this control of 
     practice and procedure the Congress is not confined to 
     traditional forms or traditional remedies.'' Aetna Life 
     Insurance Company v. Haworth, 300 U.S. 227, 240-41 (1937). In 
     explaining why the Act did not include cases that were 
     actually unripe or moot, Chief Justice Hughes wrote: ``A 
     `controversy' in this sense must be one that is appropriate 
     for judicial determination. . . . A justiciable controversy 
     is thus distinguished from a difference or dispute of a 
     hypothetical or abstract character; from one that is academic 
     or moot. . . . The controversy must be definite and concrete, 
     touching the legal relations of parties having adverse legal 
     interests. . . . It must be a real and substantial 
     controversy admitting of specific relief through a decree of 
     a conclusive character, as distinguished from an opinion 
     advising what the law would be upon a hypothetical

[[Page S15755]]

     state of facts. . . Where there is such a concrete case 
     admitting of an immediate and definitive determination of the 
     legal rights of the parties in an adversary proceeding upon 
     the facts alleged, the judicial function may be appropriately 
     exercised although the adjudication of the rights of the 
     litigants may not require the award of process or the payment 
     of damages. . . And as it is not essential to the exercise of 
     the judicial power that an injunction be sought, allegations 
     that irreparable injury is threatened are not required.'' Id. 
     at 240-41
       The Justice Department's letter shows no understanding that 
     the very purpose of the Declaratory Judgment Act is to allow 
     relief in cases in which a potential patent infringer needs 
     legal certainty concerning the scope of a patent before it 
     can proceed with its activities. Indeed, the Department's 
     approach would suggest that the Act itself is 
     unconstitutional.
       There are, however, obvious adverse legal interests between 
     the patent holder and the generic drug manufacturer over the 
     validity and application of a patent. The generic drug 
     manufacturer has invested a substantial amount of resources 
     to file an ANDA and to prepare and manufacturer the generic 
     drug. The enforcement of the patent could prevent the generic 
     drug company from producing and selling its product, 
     nullifying its investments in research and production, and 
     potentially subjecting any profits to the uncertainty of a 
     future lawsuit. In filing an ANDA, the generic drug company 
     declares its intention and ability to produce the drug, which 
     renders the dispute anything but hypothetical. Were the 
     pioneer drug company to bring a patent infringement action, 
     the case clearly would fall within Article III's arising 
     under jurisdiction.
       By failing to understand why generic drug manufacturers 
     would suffer uncertainty from the possible enforcement of a 
     patent, the Department errs in concluding that the amendment 
     would be unconstitutional. The Department asserts that the 
     amendment ``can have no effect.'' This is because, 
     apparently, many lawsuits brought after the 45-day period 
     would meet the Article III's case or controversy requirement 
     anyway, and those that did not could not fall within Article 
     III jurisdiction thanks to passage of the amendment. But then 
     the Department observes that the lack of a lawsuit within the 
     45-day period would suggest that there is no ``reasonable 
     apprehension'' present. The Department's opinion assumes 
     without question that the Federal Circuit's approach to the 
     Declaratory Judgment Act in this context--the ``reasonable 
     apprehension'' test--correctly includes all of the possible 
     cases that would meet Article III's case or controversy 
     requirement, and that application of this test to those who 
     do no sue would likely find no reasonable apprehension. 
     Therefore, according to the Department, cases in which no 
     suit is filed within 45 days indicate that there is no 
     reasonable apprehension of a lawsuit, and therefore that 
     there is no Article III case or controversy requirement.
       This view is erroneous, however, because it assumes that 
     any patent holder who does not sue within 45 days will never 
     sue. As Congress itself believed when it enacted the 
     Declaratory Judgment Act, patent holders might choose not to 
     sue in such circumstances for many reasons, such as allowing 
     the generic drug manufacturer to run up potential damages 
     while it risks little, creating uncertainty in the market and 
     among distributors and buyers of the generic drug, and 
     causing uncertainty about the value of investments and 
     research by generic manufacturers. Indeed, testimony before 
     Congress at the time of the passage of the Declaratory 
     Judgment Act underscored that the more time that passed, the 
     more damages that a patent holder could potentially 
     accumulate. By passing the Act, Congress recognized that 
     merely by refraining to exercise their Federal rights, 
     regardless of the amount of time that passes, patent holders 
     created sufficient legal and business uncertainty to harm 
     manufacturers such as generic drug producers. It is this harm 
     that brings such cases within the Article III case or 
     controversy requirement. The Justice Department appears to 
     have no theory as to why any Declaratory Judgment Act case 
     satisfies the Article III requirement, and hence cannot 
     judge whether any new application of the Act would be 
     constitutional or not.
       In enacting the Declaratory Judgment Act, Congress did not 
     give any indication that it required plaintiffs to show they 
     had a ``reasonable apprehension'' of a lawsuit, nor has the 
     Supreme Court ever interpreted the Act to require such a 
     result. Rather, Congress wanted to give those who could be 
     subject to a lawsuit by the holder of a federal right the 
     ability to seek legal certainty for all parties involved, so 
     that business planning and activity could occur in an 
     environment with clear legal rules.
       As applied by the Federal Circuit, the ``reasonable 
     apprehension'' test creates an effect opposite of that 
     desired by Congress. The Federal Circuit appears to employ an 
     inherently unpredictable totality of the circumstances 
     approach to determining whether a potential patent infringer 
     has a ``reasonable apprehension'' of lawsuit. Such approaches 
     undermine the very purpose of having clear rules in the area 
     of federal jurisdiction, and instead invite wasteful and 
     excessive litigation merely to determine whether a case is 
     appropriately brought in federal court. It is certainly 
     within Congress's authority to seek to correct 
     misinterpretations of its enactments where, as here, the 
     courts have acted in a way that undermines the very purposes 
     of the statute it has passed. By adopting the amendment, 
     Congress would simply be making clear the original purposes 
     of the Declaratory Judgment Act, which the Supreme Court, 
     almost immediately after the Act's passage, had upheld as 
     constitutional. By enacting the amendments to Hatch-Waxman, 
     Congress is appropriately acting to correct a 
     misinterpretation of the Declaratory Judgment Act that goes 
     too far in narrowing its scope. By employing the reasonable 
     apprehension test, the Federal Circuit may be allowing 
     declaratory judgment actions in only a subset of the possible 
     range of cases that could be permitted by Article III's case 
     or controversy requirement. By enacting this amendment, 
     Congress would be instructing the courts that it wishes to 
     expand the exercise of federal subject matter jurisdiction 
     under the Declaratory Judgment Act to the full extent 
     permitted by the Constitution.
       This brings me to another reason why the amendment is 
     constitutional. As an independent and coordinate branch of 
     government, Congress certainly has the authority to interpret 
     the Constitution for itself and to base its enactments on 
     that interpretation. This is exactly what happened with the 
     original Declaratory Judgment Act: some doubted whether the 
     potential defendants of enforcement actions could bring a 
     suit seeking a declaration that their actions were legal. 
     Yet, in order to create an environment in which all parties 
     could conduct their activities with legal certainty, Congress 
     enacted the Declaratory Judgment Act. In doing so, Congress 
     acted on its own interpretation of the Article III case or 
     controversy requirement that such suits were constitutional. 
     The Supreme Court subsequently agreed. Congress has even 
     fuller authority where, as here, the Supreme Court as the 
     final arbiter within the federal judiciary has never examined 
     whether Article III or the Declaratory Judgment Act impose 
     any special requirements in patent infringement cases.
       Please do not hesitate to contact me if I can provide 
     further assistance. Also, please realize that the views I 
     express in this letter are mine alone, and do not represent 
     those of the American Enterprise Institute, where I am 
     currently a visiting fellow, or of the University of 
     California at Berkeley, where I have been a law professor 
     since 1993. I may be reached at 202-862-5819, or at 
     [email protected].
           Sincerely,
                                                         John Yoo,
                                                 Professor of Law.

  Mr. NELSON of Nebraska. Mr. President, I rise today in support of the 
Medicare bill before the Senate. This is not a perfect bill, far from 
it. It is not the bill I would write. But it is a bill that will do 
more for our seniors and one we can build on in the future.
  For the past decade this body has worked on adding a prescription 
drug benefit to Medicare. We all know it is desperately needed. The 
skyrocketing cost of drugs has put meaningful health care treatment out 
of the reach of many seniors. Medicare simply was not crafted with a 
prescription drug component. That is not to blame any of the creators 
of the landmark legislation that created Medicare. They could not have 
known that science would eventually put the treatments and cures for 
many diseases in pill form. They did the best they could with the 
knowledge they had at the time. And that system served seniors well for 
a very long time.
  But it does not serve them well today. The lack of prescription drug 
coverage is a glaring omission in the current Medicare Program. It 
prevents many seniors from getting the treatments they need and 
undermines the promise of the Medicare Program--to provide health care 
benefits to our seniors.
  And we do not have the excuse that we are unaware of the importance 
of drug treatments. We know how these medications can improve and 
prolong the lives of countless seniors. We know that seniors urgently 
need this benefit and the medicine it will provide.
  As I said, the bill before us is not perfect, and many people have 
raised legitimate concerns about its shortcomings. Some have said it is 
too expensive; some have said it does not cover enough of the drug 
costs for seniors. There is truth to both statements. And both sides 
have worked to confuse our seniors. A lot of money has been spent by 
special interest groups to advance their opinions rather than 
accurately assess the impact of this bill.
  Putting all the clutter and spin aside, in a time of rising Federal 
deficits, this bill does move the ball forward. It takes a concrete 
step toward providing meaningful coverage. And it does make some 
efforts to contain long-term costs.
  This legislation is the first step in covering drug treatments and 
this is a

[[Page S15756]]

major step for seniors across the country. For example, in my home 
State of Nebraska, today there are 259,000 Medicare beneficiaries. Of 
these, about 90,000 do not currently have prescription drug coverage. 
Through this bill, beginning in 2006, they will all have coverage.
  The average out-of-pocket cost for drugs for a typical Nebraskan, 
including premiums, will decrease 35 percent from $760 to $500 per 
year. Low-income Nebraskans receive a large benefit in this bill. 
Before the drug benefit is implemented in 2006, low-income Nebraskans 
will receive $600 a year for their drugs, resulting in Nebraskans 
receiving $83 million in prescription assistance. After the drug plan 
is implemented, 108,000 low-income Nebraskans will pay little to 
nothing in premiums, deductibles and coinsurance. Because Medicare is 
taking responsibility for dual eligibles, Nebraska will save $167 
million over 8 years. And the benefits for Nebraska extend beyond the 
drug benefit.
  This bill will provide additional reimbursements for rural hospitals 
and health care providers. Nebraska doctors will receive $57 million 
over 2 years. Critical access hospitals will receive $11.3 million, and 
the rest of Nebraska's hospitals will share an additional $108 million 
over 10 years. This funding will help keep rural health care vital and 
available to rural seniors.
  Furthermore, this bill contains a pilot program I pushed to include 
that will create a new Medicare designation of ``rural community 
hospitals''. These hospitals will receive cost-based reimbursements for 
Medicare services. Seven Nebraska hospitals will take part in the 5-
year program resulting in an additional $22.5 million for these 
hospitals to help them continue to provide high quality health care in 
their communities.
  Rural community hospitals are currently unable to keep pace with 
their costs. They are too big to qualify for additional Critical Access 
Hospitals funds, yet too small to take advantage of the volume benefits 
of larger hospitals. This new pilot program will allow Nebraska's rural 
community hospitals to immediately benefit from cost-based 
reimbursements for inpatient services while testing the feasibility of 
extending the program to similar hospitals across the Nation.
  The seven hospitals are Beatrice Community Hospital, Box Butte 
General Hospital in Alliance, Columbus Community Hospital, Community 
Hospital of McCook, Jennie Melham Memorial Medical Center in Broken 
Bow, Phelps Memorial Health Center in Holdrege and Tri County Hospital 
in Lexington.
  Nationwide, this bill also takes steps to ensure that seniors do not 
lose their employer-sponsored health coverage. Originally, the 
conferees only handled this issue halfway through a subsidy covering 28 
percent of costs to employers $250 and $1000. I, and others, did not 
believe this would do enough to protect these benefits. So we have made 
that subsidy non-taxable; increasing the value of the subsidy by a 
third. Because of this increase, the Congressional Budget Office has 
stated that the drop rate for seniors could decrease by half; saving 
these benefits for millions of seniors.
  The bill before us is not perfect, but it is a start. I do not 
believe this bill is the beginning of the end of Medicare, nor do I 
believe that it is the final solution to the skyrocketing costs of 
health care.
  With passage of this legislation, for the first time, seniors will 
have access to prescription drugs through Medicare. And we will be able 
to use this bill to build better coverage in the future. This bill goes 
fully into effect in 2 years; time that can be spent studying this 
coverage, adapting it and making sure it works for our seniors.
  For too long, seniors have waited for this coverage. Many of those 
seniors are not here to see it happen today. They are no longer with 
us; they never got the drug coverage they needed. It is too late for 
them.
  But it is not too late for millions of seniors across the country to 
benefit from this bill. We owe it to them to pass this and get a 
concrete start on this issue. We can make changes if we need to; but we 
can't get back the time we will have lost if we do not move forward 
now.
  A vote against this bill will leave tens of thousands of seniors in 
Nebraska without a prescription drug benefit of any kind. Let's pass 
this bill before it is too late for today's seniors. We may not get an 
opportunity like this again.
  Mr. BAUCUS. Mr. President, I want to speak for a moment today about 
the impact on States from this Medicare prescription drug bill. I have 
long been concerned about our States' fiscal crisis, and I have 
supported fiscal relief through the so-called ``FMAP'' increase, 
through increases in SSBG, and through general revenue sharing. And I 
am pleased that, in the long term, this bill is expected to result in 
substantial savings to States more than $17 billion by 2013.
  But I remain concerned about the impact that this bill will have on 
States in the short term. Before this bill had been finalized, when 
there were early indications that States could be harmed by the so-
called ``holdback'' formula in the first years of the drug benefit, I 
insisted that the formula be revised. We added $4.5 billion so that the 
impact on states of the ``woodwork effect,'' new administrative costs, 
and the ``holdback'' provisions would not ultimately put the States in 
the red in any year of the drug benefit.
  As sometimes happens, preliminary budget estimates did not turn out 
exactly as expected. The overall impact on State Medicaid budgets in 
the first year of the drug benefit will still result in States spending 
more than they will save. While I regret that, I firmly believe that, 
in the long run, this bill will strengthen State budgets and take some 
pressure off of strained Medicaid programs.
  If a longer term analysis shows that there are unexpected costs to 
States in the early years, or the expected costs are higher than we can 
know today, I pledge to work over the next 2 years to ensure that the 
States are not harmed when the Medicare drug benefit goes into effect.
  Mr. President, one of the most important provisions in the rural 
package in this bill would reauthorize the Rural Hospital Flexibility 
Grant program for another 5 years. This grant program was created along 
with the Rural Hospital Flexibility Program, RHFP, in the Balanced 
Budget Act of 1997.
  The RHFP is designed to help ensure continued access to medical 
services in rural and frontier areas of our Nation that otherwise could 
not sustain hospital services. The BBA created a new category of 
hospital called a Critical Access Hospital, CAH. In my State of 
Montana, 36 acute care hospitals have converted to CAH status.
  The Rural Hospital Flexibility Grant program provides the tools 
States need to implement the RHFP. The purposes of this grant program 
are many.
  First, it provides resources to cash-strapped rural hospitals to help 
them make the conversion to CAH status.
  Second, it enables States to provide technical assistance to these 
facilities as they move through the conversion process.
  Third, this grant program provides resources to help States further 
stabilize rural health care by fostering and developing networks of 
providers in rural areas.
  Fourth, the program enables States to initiate a variety of other 
innovative approaches to stabilize and improve health care in rural 
areas. For example, in my State of Montana, Flex grant funds have 
enabled the State's CAHs to develop a pioneering quality improvement 
program.
  There was strong support for reauthorization of this grant program 
among the conferees. There was also strong support for clarifying how 
these funds could be used to ensure that as much of this money as 
possible was used for the direct benefit of CAHs and other rural 
providers in the States.
  In that regard, the bill was intended to specify that no more than 15 
percent of a State's grant allocation be used for ``indirect'' 
administrative costs. However, in drafting the bill, the word 
``indirect'' was inadvertently dropped from the language.
  I would like to clarify the intention of the conference committee 
that this 15-percent restriction be applied only to the amount of funds 
that can be used for ``indirect'' administrative expenses.
  Mr. KYL. Mr. President, the majority leader, Senator Frist, joins me 
in this

[[Page S15757]]

explanation of why the conference agreement on the Medicare 
Prescription Drug and Modernization Act of 2003 does not allow 
increased importation of drugs from outside the United States. Our 
explanation provides important background information on this largely 
misunderstood issue that is vital to the health and safety of 
Americans.
  Under current law, the Federal Food, Drug, and Cosmetic Act 
establishes a system under which prescription drugs must be approved by 
the FDA and properly labeled, packaged, tested, stored, and distributed 
pursuant to FDA regulatory requirements. This is the finest and most 
effective system in the world for ensuring drug safety, effectiveness, 
and quality.
  To protect American consumers by ensuring the integrity of this 
system, the law generally prohibits the importation of prescription 
drugs. Section 801(a) of the Act prohibits importation of drugs that 
are unapproved, adulterated, or misbranded. Virtually all prescription 
drugs manufactured overseas for distribution in foreign countries fail 
one or more of these standards and, therefore, cannot legally be 
imported into the United States. It is important to note in this regard 
that just because a drug is manufactured in a facility that is subject 
to FDA inspection does not mean that the drug meets FDA approval or 
other requirements. Different countries have different manufacturing, 
testing, labeling, packaging, and other requirements from those imposed 
by the FDA, and in fact the composition of the drug product itself may 
vary from country to country. Manufacturers may use a single facility 
to manufacture a drug for several different countries, but they must 
vary their processes to ensure that each drug lot will satisfy the 
requirements of the intended destination country.
  Some drugs available overseas are manufactured in the United States 
and then exported. Section 801(d) of the Act prohibits the 
importation--sometimes called reimportation--of these drugs. Congress 
added section 801(d) through the Prescription Drug Marketing Act in 
1988 to close a loophole under which counterfeit and substandard drugs 
were being brought into this country. There is an exception to this 
prohibition for the original manufacturer, who is part of the U.S. 
system and subject at all times to FDA authority and oversight. The 
manufacturer's own importation of drugs that have never been outside 
its control is comparable to shipments between its manufacturing plants 
and warehouses within the United States, and is completely different 
from the importation of drugs that have been placed into the wholesale 
and retail distribution systems of foreign countries, where they are no 
longer subject to FDA jurisdiction.
  In 2000, Congress authorized an additional exception to section 
801(d) in the Medicine Equity and Drug Safety Act. This law added a new 
section 804 under which pharmacists and wholesalers would be permitted 
to import drugs from a list of designated countries, including Canada 
and the countries of the European Union. In order to protect American 
consumers, Congress provided that section 804 would not become 
effective until the Secretary of Health and Human Services demonstrates 
to Congress that its implementation will ``pose no additional risk to 
the public's health and safety'' and will ``result in a significant 
reduction in the cost of covered products to the American consumer.'' 
Secretary Shalala and Secretary Thompson both concluded that they could 
not make this demonstration.
  FDA has a written policy under which it permits an individual to 
import a small quantity of a prescription drug for personal use, but 
only if the drug is not available in the United States. This policy is 
intended to allow seriously ill patients to obtain unapproved drugs to 
treat potentially life-threatening and similar conditions for which 
adequate treatment is unavailable in the United States. It does not 
apply to importation of drugs that are approved in the United States or 
to any commercial activities, such as Internet or print advertising or 
importation by persons other than individual patients. Moreover, even 
importation within the four corners of this policy remains technically 
illegal; the policy represents only a reasonable and limited exercise 
of FDA's enforcement discretion in the interest of individual patient 
treatment.
  A final, and important, legal requirement is that a prescription drug 
can only be dispensed to the patient based on a valid prescription. 
Otherwise, the drug is misbranded and cannot be imported, or shipped 
domestically. There is extensive evidence documenting the fact that 
many foreign interest sites ship drugs without requiring any 
prescription at all, or with an invalid prescription based on a 
perfunctory questionnaire and without any genuine medical examination--
co-signing of prescriptions by foreign physicians who have no 
relationship with the patient does not meet the legal requirements and 
presents serious risks, as both U.S. and foreign authorities have made 
clear. These activities put patients at risk by taking the licensed 
healthcare professional out of the process for deciding whether to 
initiate or continue treatment. Prescription drugs are classified as 
such because they cannot safely be used by laypersons without proper 
professional oversight. Drug importation commonly violates this basic 
safeguard.
  Despite the existing prohibitions on drug importation, the volume of 
importation activity is growing as foreign pharmacies and domestic 
storefront facilitators advertise for business, and state and local 
governments and others explore ways to direct American consumers to 
foreign sources for their needed medicines. All of these activities are 
illegal, and they pose threats to our health and safety.
  According to the FDA, imported drugs are too often unapproved, 
contaminated, counterfeit, and contain different ingredients from those 
required under agency regulations. These are not mere theoretical 
concerns. A recent series of spot inspections conducted jointly by the 
FDA and the U.S. Bureau of Customs and Border Protection found that 88 
percent of more than 1,000 examined drug packages contained unapproved 
drugs and that they could pose ``clear safety problems.'' These 
included an unapproved blood thinner that could cause life-threatening 
bleeding; unapproved epilepsy, thyroid, and diabetes drugs that could 
cause life-threatening side effects; drugs that have been withdrawn 
from the U.S. market because of safety concerns; animal drugs not 
approved for human use; drugs with dangerous interactions; drugs 
improperly packaged in sandwich bags and tissue paper; and controlled 
substances. In another case involving a Web site purporting to ship 
FDA-approved drugs from Canada, a patient received an unapproved 
seizure medicine manufactured in India. In another case involving a 
U.S. storefront operation, the Web site shipped unrefrigerated insulin, 
which can degrade without changing its appearance and thereby put 
insulin-dependent diabetic patients at risk. Other examples abound, 
including deaths from overdoses of drugs obtained from foreign Internet 
sites, as documented in a recent press report of a year-long 
investigation into illegal drug importation, counterfeiting, and 
distribution.

  Another recent study also concludes that drug importation increases 
the risk of terrorism against the United States. Huge volumes of 
packages, only a miniscule fraction of which can be inspected, present 
an inviting target for the deliberate introduction of contaminants and 
poisons. Last year, in the Public Health Security and Bioterrorism 
Preparedness and Response Act, Congress gave the FDA substantial new 
powers to protect the safety of the food supply against terrorist 
threats. FDA has been implementing this law through new rules requiring 
advance notice of food importations and similar measures. Imported 
drugs present comparable threats, yet there is neither an analogous set 
of prior-notice requirements nor adequate inspection resources to 
enforce existing legal standards.
  Proponents of loosening the existing standards for drug importation 
have argued that we can rely on the Canadian drug regulatory system to 
ensure the safety of drugs exported from that country to the United 
States. This is simply wrong. Section 37 of the Canadian Food and Drug 
Act provides that it does not apply to exports. In a recent letter, the 
Canadian government made clear that it ``has never stated that it would 
be responsible for the safety and quality of prescription drugs 
exported

[[Page S15758]]

from Canada into the United States.'' Health Canada also has described 
its concerns with cross-border Internet pharmacy sales as relating to 
the health of Canadians themselves as it should be.
  While we have no doubt that the Canadian system works for Canadians, 
FDA Commissioner McClellan has made clear that purchases of drugs by 
Americans from Canada present entirely different concerns:

       Buying between the U.S. and Canadian systems is not the 
     same thing as buying within each system. The U.S. and Canada 
     do not have integrated systems for taking timely action to 
     protect consumers in the event of a safety problem involving 
     an illegally imported drug in the U.S. Protections to assure 
     the appropriateness of a prescription, such as requirements 
     for physician contact and monitoring, may differ. And each 
     country has only limited resources to devote to their 
     existing systems for assuring drug safety for their own 
     populations, let alone to assuring the safety of an expanded 
     scope and volume of drug imports. For example, Ontario, 
     Canada's largest province . . . , has exactly one 
     investigator tasked with policing all pharmacy operations 
     there. . .

  In addition, as also documented by the FDA many drugs purporting to 
come from Canada actually were manufactured in Third World countries 
and either transshipped through Canada or shipped directly from those 
countries to the United States, in either case without any oversight 
from Canadian health officials. Such transshipment is becoming 
increasingly common, with Canadian sites now obtaining their products 
from countries such as Bulgaria, Argentina, and Pakistan for sale into 
the United States.
  Importation supporters also have suggested that anticounterfeiting 
technologies can be used to assure the safety of imported drugs. This, 
too, is a false promise. Optical anticounterfeiting measures are used 
in our paper currency, yet they have proven inadequate. Even the new 
$20 bill, which incorporates multiple anticounterfeiting measures, is 
being counterfeited less than a month after its introduction. 
Counterfeit drugs, of course, present far greater concerns. The FDA is 
exploring anticounterfeiting technologies for drugs but, as 
Commissioner McClellan has made clear, ``there isn't any magic bullet 
available today,'' and these technologies are ``no substitute for a 
comprehensive, multi-part system for assuring the safety of the actual 
drug product.'' Moreover, even the ineffective anticounterfeiting 
technologies that are available would be very expensive, raising drug 
costs by an estimated $2 billion in the first year alone.
  Finally, the question of legal liability for adulterated or 
counterfeit drugs remains unresolved. American companies should not be 
held legally responsible for drugs they did not manufacture, or that 
were adulterated after leaving their control or that they manufactured 
to comply with foreign country requirements rather than for sale in the 
United States. The U.S. Government should not be held legally 
responsible for drugs that it did not actually test and approve, or 
that were adulterated after the approval process was complete and the 
drugs were no longer subject to FDA oversight.
  In short, drug importation presents a wide range of serious safety 
concerns. We cannot meet these challenges merely by writing 
prohibitions into the law. The law already requires that drugs be FDA-
approved, yet it is abundantly clear that unapproved and other 
violative products are streaming across our borders every day. Changes 
in the law to relax the current prohibitions on importation will only 
increase this cross-border traffic and, in the absence of new legal 
protections and new resources to effectively to enforce them, increase 
the threat to the American public.
  The United States has every right under our international agreements 
to enforce legitimate regulatory requirements relating to the health 
and safety of our citizens. There is no question that the drug 
importation provisions of the Federal Food, Drug, and Cosmetic Act meet 
this standard.
  Canada and other foreign countries impose price controls on 
pharmaceuticals as part of their high-tax social welfare systems. No 
reasonable concept of free trade requires that our country open its 
borders to drugs whose prices are kept artificially low under these 
systems. In fact, a leading scholar and supporter of free trade rights, 
Professor Richard Epstein of the University of Chicago Law School, has 
described drug importation as ``a perversion of the basic principle of 
free trade.''
  Pharmaceutical price controls are a trade issue that must be urgently 
addressed by our government so that foreign countries and their 
citizens bear a fair share of research and development costs for new 
medicines. Price and access controls imposed by foreign countries 
constitute trade barriers within the meaning of our existing trade 
laws, and we urge the administration to use the full extent of its 
authority in bilateral and multilateral negotiations to remove these 
barriers for the benefit of all Americans. In fact, the legislation we 
consider today requires the U.S. Trade Representative to develop a 
strategy for negotiating the elimination of price controls and requires 
timely Congressional briefings on the subject.
  Drug coverage, particularly for Medicare beneficiaries as established 
by this bill, is the most important step we can take to ensure access. 
For those without coverage, drug importation imposes only great risks 
and offers little or nothing in the way of savings.
  There is no evidence to suggest that drug importation actually will 
save money for American consumers. As the FDA has stated, ``it is 
likely that the intended cost-savings for consumers would be absorbed 
by fees charged by exporters, pharmacists, wholesalers, and testing 
labs.'' This is confirmed by the European experience with parallel 
importation, which demonstrates that the only real beneficiaries are 
middlemen in the distribution chain, not the ultimate consumers. Recent 
experience in Canada also makes clear that Canadians will act to 
protect the integrity and availability of drug supplies for their own 
citizens if these are threatened by importation, which will lead to 
higher prices for imported drugs--as well as increased transshipment 
from third-world drug supply sources, as discussed above.
  In any event, claims of enormous cross-border price differentials are 
widely exaggerated because they do not reflect intelligent comparative 
shopping or appropriate adjustments for currency and standard-of-living 
differences. Surveys of legitimate American pharmacy Internet sites and 
retailers show that substantial discounts can be obtained right here in 
the United States, with full confidence in product safety, quality, and 
integrity.
  The myriad of questions and concerns we have raised here explain why, 
rather than allow importation of drugs, this legislation calls for a 
comprehensive study of the risks and benefits of importing drugs and of 
how trade negotiations can be used to begin bringing down price 
controls, so that Americans and everyone else in the developed world 
share fairly in the costs of drug research and development.
  Mr. VOINOVICH. Mr. President, I rise before the Senate in support of 
the conference report accompanying the Medicare Prescription Drug and 
Modernization Act. While the conference report before the Senate is not 
a perfect bill, it is a good bill that will finally provide seniors a 
voluntary prescription drug benefit through Medicare.
  After years of having to carry the burden of high prescription drug 
costs without any assistance from Medicare, the bill that is before the 
Senate now, which has the full support of the AARP, will finally 
provide 40 million Medicare beneficiaries nationwide, 1.6 million in 
Ohio, access to affordable prescription drugs.
  I would like to applaud the work of our Leader, Senator Frist; our 
Finance Committee Chairman, Senator Grassley; and the Finance Committee 
Ranking Member, Senator Baucus. Through their leadership, the Senate is 
poised to finally move past politics and provide seniors with a real 
prescription drug benefit.
  Unfortunately, we have fiddled around with the issue of Medicare 
reform for far too long in Washington. The truth is, even if the Senate 
passes the bill before us today, its full implementation will not occur 
until 2006. For those of my colleagues who have said that we are moving 
too quickly in adding a prescription drug benefit, the fact of the 
matter is that the Senate has not moved quickly enough.
  As with the rest of the Nation, currently, Ohio's seniors are paying 
too

[[Page S15759]]

much out-of-pocket for their prescription drugs. The cost of these 
life-saving drugs is increasingly becoming a large burden for seniors, 
with some even traveling to Canada to find cheaper drugs. Seniors 
should not have to go to a foreign country to receive the drugs that 
their doctors prescribe. It is time seniors receive access to 
affordable prescription drugs in the United States.
  This legislation will finally provide Medicare beneficiaries with a 
voluntary prescription drug benefit. This is especially important to 
the 400,232 Medicare beneficiaries in Ohio that currently have no 
public or private prescription drug coverage.
  For those beneficiaries that already have coverage through another 
source, such as through a former employer, and would like to keep that 
coverage, this legislation supports that choice as well.
  As my colleagues know, approximately 12 million of the 40 million 
Medicare beneficiaries currently have prescription drug coverage 
through former employer-based retiree health plans.
  Many Ohioans that I have spoke to have concerns that the creation of 
a new Medicare drug benefit may cause many of them to lose their 
retiree coverage. However, the bipartisan conference report encourages 
employers to continue to provide coverage to their retirees by 
providing assistance for retirees' health care costs, including their 
prescription drugs costs.
  In fact, the conference report provides $86 billion in subsidies to 
assist employers who continue to provide their retirees with health 
care coverage. This is critical because scores of retirees have lost 
their health care benefits over the past several years. The bottom line 
is that this bill will help employers to continue to provide their 
retirees with health care security.
  Not only will seniors have access to affordable prescription drugs 
with this bill, they will have access to benefits that a modern health 
plan should have, such as preventive care and disease management--
options that Medicare currently does not provide.
  Moreover, these additional benefits are provided by giving seniors a 
choice and control over their prescription drug plans and health care 
providers.
  While the Senate is on the brink of finally strengthening and 
modernizing Medicare, I would be remiss if I did not take a step back 
and point out the roadmap that has lead us to this point.
  The President has led the way to providing seniors with access to 
affordable prescription drugs. If my colleagues recall, at the 
beginning of the year, the President provided in his budget $400 
billion for Medicare reform, which included adding a prescription drug 
benefit. This substantial amount illustrated his commitment to our 
nation's seniors. That was the first step.
  Following the President was the action taken by Congress to lay out a 
blueprint for Medicare. During the prescription drug debate in 2002, 
the Senate operated without a budget resolution--the first time the 
Senate has not done so since 1974. However, this year Congress operated 
under a budget resolution.
  Through these efforts, and those of the Finance Committee, a bill 
stands before the Senate that strikes a balance between providing 
seniors and the disabled access to needed prescription drugs today and 
doing so in a fiscally sensible way that will allow benefits to extend 
to future generations.
  And while opponents of the bill claim that the benefits provided are 
not large enough, $400 billion does buy an awful lot.
  Beginning in 2004, seniors will receive a prescription drug discount 
card that will provide immediate savings of 10 to 25 percent on most 
prescription drug purchases. On top of these discounts, the Federal 
Government would annually purchase the first $600 in prescription drug 
costs for those seniors below 135 percent of poverty.
  The implementation of the full program, which will include a new 
Medicare Part D and a Medicare Advantage program, will begin in January 
2006. All Medicare beneficiaries will receive substantial subsidies 
through these new benefits. However, low-income seniors will receive 
additional assistance on top of these subsidies. In Ohio, this means 
624,416 seniors will receive additional assistance.
  For the 152,470 neediest seniors in my State of Ohio, those who 
qualify for both Medicare and Medicaid, under this bill they would pay: 
nothing in premiums; nothing in deductibles; and a nominal cost-share 
of no more than $1 for a generic drug and no more than $3 for a name-
brand drug.
  For the 492,872 seniors in my State of Ohio with incomes below 135 
percent of poverty, and assets of no more than $6,000 per individual 
and $9,000 per couple, under this bill they would pay: nothing in 
premiums; nothing in deductibles; and A nominal cost-share of $2 for a 
generic drug and $5 for a name-brand drug.
  For those 131,544 seniors in my State of Ohio with incomes between 
135 and 150 percent of poverty, and assets of no more than $10,000 per 
individual and $20,000 per couple, under this bill they would pay: 
premiums based on a sliding scale but NO MORE than $35 per month; $50 
annual deductible; and 15 percent co-payments up to $3,600 after 
$3,600, seniors would pay a nominal cost-share of $2 for a generic drug 
and $5 for a name-brand drug.
  For seniors over 150 percent of poverty, the standard subsidized 
benefit would include: $250 annual deductible; $35 average monthly 
premium; the government would pick up 75 percent of beneficiary out-of-
pocket costs for drug expenses up to $2,250; between $2,251 and $3,600, 
beneficiaries cover all drug expenses out-of-pocket; and the government 
would pick up 95 percent of beneficiary out-of-pocket costs for drug 
expenses above $3,600.
  In addition to the stand-alone benefit under traditional Medicare, 
the conference report would establish the Medicare Advantage program. 
All Medicare Advantage plans will be required to offer at least the 
standard drug benefit established in H.R. 1 and would be encouraged to 
offer beneficiaries enhanced access to the latest in health care 
technology through disease management, chronic care, and quality 
improvement programs.
  These plans have the opportunity to provide seniors with better 
coverage at affordable prices. To help ensure participation in rural 
and urban areas equally, Medicare Advantage plans would submit bids to 
the Centers on Medicare and Medicaid Services on a regional basis. The 
Federal Government will share the risk with insurance companies and 
these plans.
  It should also be noted that while the thrust of this bill is to 
provide seniors with access to affordable prescription drugs, the bill 
also ensures that seniors will continue to have access to current 
Medicare benefits as well.
  For instance, while the relationship between a senior and their 
physician is paramount, last year, Medicare was scheduled to cut 
physician payments by 4.4 percent, which threatening seniors' access to 
their doctors. Physicians had already received a 5.4 percent cut in 
2002.
  Congress temporarily fixed the formula in 2003 and doctors received a 
modest increase of 1.6 percent instead of a cut. For 2004, physicians 
were again scheduled to take a 4.5 percent cut. However, to ensure that 
seniors have access to their physician of choice, this bill includes 
modest increase in payments of 1.5 percent for both 2004 and 2005.
  Additionally, physicians and their staffs have become increasingly 
inundated with regulations and paperwork from Medicare. Provisions are 
included in the bill to streamline some of this paperwork so that 
doctors can spend more time with their patients rather than filling out 
reams and reams of Government forms.
  Seniors in rural areas will also be assured of continual access to 
Medicare benefits. One of the most important aspects of the bill is the 
rural provider provisions. Through the bill, providers in rural areas 
will be placed on an equal footing to that of their urban counterparts. 
Some of the specific rural provisions include: equalization of the 
urban and rural payments for inpatient hospital services under 
Medicare; revision of the labor-related share of the wage index used in 
Medicare's payment system. Rural hospitals, because their local wage 
levels are lower than urban areas, are adversely affected by a high 
labor-related share; increase in payments to home health agencies by 
five percent for services furnished in rural areas; and increase in 
payment for physicians that serve

[[Page S15760]]

beneficiaries in counties where there are a scarcity of physicians.
  The House of Representatives has already acted and the President is 
waiting to sign the bill into law. It is time that the Senate act and 
pass the Medicare Prescription Drug and Modernization Act.
  Mr. SPECTER. Mr. President, since Medicare was established in 1965, 
people are living longer and living better. Today Medicare covers more 
than 40 million Americans, including 35 million over the age of 65 and 
nearly 6 million younger adults with permanent disabilities.
  Congress now has the opportunity to modernize this important Federal 
entity to create a 21st century Medicare Program that offers 
comprehensive coverage for pharmaceutical drugs and improves the 
Medicare delivery system.
  The Medicare Prescription Drug and Modernization Act would make 
available a voluntary Medicare prescription drug plan for all seniors. 
If enacted, Medicare beneficiaries would have access to a discount card 
for prescription drug purchases starting in 2004. Projected savings 
from cards for consumers would range between 10 to 25 percent. A $600 
subsidy would be applied to the card, offering additional assistance 
for low-income beneficiaries defined as 160 percent or below the 
Federal poverty level. Effective January 1, 2006, a new optional 
Medicare prescription drug benefit would be established under Medicare 
Part D.
  This bill has the potential to make a dramatic difference for 
millions of Americans living with lower incomes and chronic health care 
needs. Low-income Medicare beneficiaries, who make up 44 percent of all 
Medicare beneficiaries, would be provided with prescription drug 
coverage with minimal out-of-pocket costs. In Pennsylvania, this 
benefit would be further enhanced by including the Prescription 
Assistance Contract for the Elderly (PACE) program which will work in 
coordination with Medicare to provide increased cost savings for low-
income beneficiaries.
  For medical services, Medicare beneficiaries will have the freedom to 
remain in traditional fee-for-service Medicare, or enroll in a Health 
Maintenance Organization (HMO) or a Preferred Provider Organization 
(PPO), also called Medicare Advantage. These programs offer 
beneficiaries a wide choice of health care providers, while also 
coordinating health care effectively, especially for those with 
multiple chronic conditions. Medicare Advantage health plans would be 
required to offer at least the standard drug benefit, available through 
traditional fee-for-service Medicare.
  We already know that there are many criticisms directed to this bill 
at various levels. Many would like to see the prescription drug program 
cover all of the costs without deductibles and without copays. There 
has been allocated in our budget plan $400 billion for prescription 
drug coverage. That is, obviously, a very substantial sum of money. 
There are a variety of formulas which could be worked out to utilize 
this funding. The current plan, depending upon levels of income has 
several levels of coverage from a deductible to almost full coverage 
under a ``catastrophic'' illness. One area of concern is the so-called 
``donut hole'' which requires a recipient to pay the entire cost of rug 
coverage.
  As I have reviewed these projections and analyses, it is hard to say 
where the line ought to be drawn. It is a value judgment as to what 
deductibles and what the copays ought to be and for whom. Though I am 
seriously troubled by the so-called donut hole, it is calculated to 
encourage people to take the medical care they really need, and be 
affordable for those with lower levels of income. Then, when the costs 
move into the ``catastrophic'' illness range, the plan would pay for 
nearly all of the medical costs.
  I am pleased that this bill contains a number of improvements for the 
providers of health care to Medicare beneficiaries. Physicians who are 
scheduled to receive cuts in 2004 and 2005 will receive a 1.5 percent 
increase over that time. Moreover, rural health care providers will 
receive much needed increases in Medicare reimbursement through raises 
to disproportionate share hospitals and standardized amounts, and a 
decrease in the labor share in the Medicare reimbursement formula. 
Hospitals across Pennsylvania will benefit from upgrades to the 
hospital market basket update and increases in the Indirect Medical 
Education. Furthermore, the bill will provide $900 million for 
hospitals in metropolitan statistical areas with high labor costs due 
to their close proximity to urban areas that provide a 
disproportionately high wage. These hospitals may apply for wage index 
reclassification for three years starting in 2004.
  I would note that I do have concerns with this legislation with 
regard to oncological Medicare reimbursement and the premium support 
demonstration project for Medicare Part B coverage. Proposed reductions 
in the average wholesale price for oncological pharmaceuticals may have 
a grave effect on oncologists' ability to provide cancer care to 
Medicare Beneficiaries. Every Medicare beneficiary suffering from 
cancer should have access to oncologists that they desperately need. I 
will pay close attention to the effects that this provision has on the 
quality and availability of cancer care for beneficiaries and 
oncologists' ability to provide that care. Further, the premium support 
demonstration project for Medicare Part B premiums poses a concern. 
Some metropolitan areas may face up to a five percent higher premium 
for fee-for-service care than neighboring areas. While these provisions 
remain troublesome, we cannot let the perfect become the enemy of the 
good with this piece of legislation.
  The Medicare Prescription Drug legislation has been worked on for 
many years. I believe this bill will provide a significant improvement 
to the vital health care seniors so urgently need. I congratulate the 
members of the conference committee including Majority Leader Frist, 
Senator Grassley, Chairman of the Finance Committee, and the Ranking 
Member, Senator Baucus, for the outstanding work which they have done 
on an extraordinary complex bill.
  The PRESIDING OFFICER. The majority leader.
  Mr. FRIST. Mr. President, I have a unanimous consent request to 
clarify plans for at least early in the morning. I ask unanimous 
consent that when the Senate resumes the conference report to accompany 
H.R. 1 on Tuesday at 8:15 a.m., the time until 9:15 be equally divided 
between the chairman or his designee and the Democrat leader or his 
designee; further, I ask consent at 9:15 the Senate proceed to a vote 
on the adoption of the conference report, with no intervening action or 
debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DURBIN. If the majority leader will yield for a question, is it 
the intention of the majority leader to adjourn after that vote?
  Mr. FRIST. Mr. President, through the Chair, we are currently still 
negotiating and working on the omnibus, and we will continue to work 
for the next probably 6 to 7 hours. So I will not be able to comment 
definitively until probably first thing in the morning. Again, we 
continue to work. Initially, we hoped to make progress even tonight on 
the omnibus, but we were unable to do that. So we will not be 
adjourning right afterwards. We will likely be in through tomorrow and 
would like to get as far as we can with the omnibus at that time.
  Mr. DURBIN. Mr. President, if the majority leader will yield for 
another question, will there be an effort to extend unemployment 
compensation benefits before we adjourn?
  Mr. FRIST. Mr. President, at this point I really cannot comment 
intelligently until we further have our discussions through the night 
in terms of what the plans will be over the course of tomorrow.
  Mr. DURBIN. I thank the majority leader.
  Mr. FRIST. Mr. President, over the past few days, we have heard a 
number of criticisms of the bill. And there is one criticism in 
particular that I want to address.
  Opponents have claimed that the bill fails to contain prescription 
drug costs. I can only presume that this criticism reflects a 
misunderstanding--because the bipartisan agreement includes a number of 
critical provisions to lower prescription drug costs.
  Under the Hatch-Waxman law, generic approval is allowed when a new

[[Page S15761]]

drug's patent and market exclusivity protection expires, or when a 30-
month stay terminates. The intent is to provide incentives to develop 
valuable new drug treatments through patent protection, but also to 
facilitate access to generic versions of the drug after the innovator's 
patent expires. However, access to generic drugs has sometimes been 
improperly delayed.
  Earlier this Summer, the Senate voted 94-1 in favor of reforms 
developed by Senators Gregg and Schumer to close existing loopholes in 
the law. And the bipartisan agreement retains these critical reforms, 
ensuring speedier access to generic drugs for all Americans. Under the 
bipartisan agreement, a new drug applicant will receive only one 30-
month stay of approval of a generic's application, for patents 
submitted to FDA prior to the generic application. The agreement also 
takes additional steps to reduce or eliminate the delays in the 
movement of generic drugs to the marketplace.
  As a result, patients will benefit from grater access to safe, 
effective, low-cost generic alternatives to brand name medicines. 
That's why this bill is supported by the Generic Pharmaceutical 
Association and the Coalition for a Competitive Pharmaceutical Market. 
I would like to submit their letters of support for the Record.
  The competition in this bill achieves significant ``bang for the 
buck'' because it relies on drug plans to negotiate discounts. CBO says 
the private insurance model has a cost management factor of 25 
percent--the effect of price discounts, rebates, utilization controls, 
and other tools that a PDP might use to control spending. By relying on 
the bargaining power of drug plans, this bill will drive down the costs 
of prescription drugs.
  The bipartisan agreement enhances research on the comparative 
clinical effectiveness of prescription drugs. This information will be 
quickly disseminated. By giving patients, health care professionals, 
health plans and the Medicare program better information on the 
comparative effectiveness of treatment options, this provision will 
ensure that patients and health care consumers get the most value for 
their money.
  The bill includes other key cost containments. Prescription drug 
negotiations will not be subject to the Medicaid ``best price'' rules. 
Competing plans will get even better prices for seniors and disabled 
persons. Last year, the Congressional Budget Office estimated that 
exempting Medicare from best price rules would save $18 billion between 
2003 and 2012.
  The bipartisan Medicare agreement will lower prescription drug costs. 
That is why it has been endorsed by pro-consumer groups including 
the American Association of Retired Persons and the Coalition for a 
Competitive Pharmaceutical Market.

  However, opponents have claimed that this language ``prevents'' the 
Federal Government from negotiating drug prices.
  The bill specifies that the government ``may not interfere with the 
negotiations between drug manufacturers and pharmacies and PDP 
sponsors'' and ``may not require a particular formulary or institute a 
price structure.'' In fact, this provision first appeared in May 2000 
in a Democratic bill. The provision protects patients by keeping the 
government out of decisions about which medicines they will be able to 
receive.
  Through this bill, we are giving seniors new access to affordable 
prescription drugs. We are speeding the pace of cheaper generic drugs 
to the market. We are providing for research on the comparative 
effectiveness of prescription drugs. We are providing a drug discount 
card and greater relief for low-income seniors. And we are unleashing 
powerful new market forces that will drive down the costs of 
prescription drugs.
  But some continue to advocate for so-called ``reimportation.'' This 
is unnecessary and unsafe. The FDA has much evidence of counterfeit, 
expired, mislabeled, subpotent and superpotent drugs shipped into the 
United States from all over the world. Health Canada is on the record 
saying that they will not guarantee the safety of drugs sold to 
Americans. Numerous current and former FDA and law enforcement 
officials have testified that this is not safe. Just last month, the 
Washington Post ran a detailed series revealing a vast, complicated 
network of ``criminal profiteers, unscrupulous wholesalers, rogue 
Internet sites, and foreign pharmacies.'' The result has been deadly.
  In St. Charles Missouri, a 61-year-old breast cancer patient was 
unknowingly sold diluted cancer medication by her local drugstore. 
Seven months after being sold the phony batch, she was dead. In 
Sacramento, a wife found her 47-year-old husband on the living room 
couch dead of an overdose of painkillers. He had obtained the pills 
from multiple pharmacies all over the world.
  These disturbing reports bear directly upon the importation of 
prescription drugs. There is the faulty notion that this is a solution 
to drug costs. But as real life illustrates, the black market in 
pharmaceuticals is a very dangerous place.
  In 2000, Congress passed the Medicine Equity and Drug Safety Act. But 
in the 3 years and two administrations since the law has been in 
effect, no Health and Human Services Secretary--either Democrat or 
Republican--has been willing to verify its safety. So this bill 
requires the Department of Health and Human Services to undertake an 
in-depth study on whether there is a safe way to reimport drugs from 
Canada.
  What we need are sensible policies. And in the Medicare legislation 
we have them. The Medicare bill under consideration will make sure that 
seniors get the prescription drugs they need, with the safety they 
expect.
  Mr. President, Medicare beneficiaries have waited too long for this 
debate. The practice of medicine has changed dramatically since the 
inception of the Medicare Program in 1965. Unfortunately, the program 
has seen few changes or improvements.
  Today we finally consider providing 41 million seniors and Americans 
with disabilities with access to prescription drug coverage. Currently, 
9.9 million Medicare beneficiaries have NO drug coverage and many more 
have only limited coverage.
  Prescription drugs have become integral in the practice of Medicine 
and this legislation is critical to the health of current and future 
beneficiaries. Beginning next year under this bill, seniors will 
receive immediate, voluntary assistance with their drug costs. All 
Medicare beneficiaries would receive a discount drug card that will 
help bring down the cost of prescription drugs by 10-25 percent. 
Moreover, low-income seniors will receive $600 to help with their drug 
costs.
  In 2006, beneficiaries will have access to a comprehensive 
prescription drug benefit. Seniors with incomes above 150 percent of 
the Federal poverty level will see savings of about half of their drug 
costs as a result of this coverage.
  Low-income seniors will no longer be forced to rely on Medicare for 
help with their drug costs. This legislation will provide coverage for 
drug costs for even our lowest-income seniors under the Medicare 
program. Seniors with incomes below 150 percent of the Federal poverty 
level will receive coverage for all but a small percentage of their 
drug costs.
  Prescription drugs not only treat disease, but they can help to 
prevent disease when used as part of therapeutic treatment. For this 
reason I am proud to say that prescription drug coverage is only one of 
the major improvements we will make to the Medicare Program. For the 
first time, the Medicare Program will put an emphasis on chronic care 
coordination and disease management. Beneficiaries will receive 
coverage for a welcome to Medicare physical. The preventive physical 
visit is one of the best opportunities physicians have to measure 
health status, screen for various diseases and educate patients about 
their health needs.
  The legislation will also add coverage for screenings for heart 
disease and diabetes. Moreover, this bill directs the Secretary to 
integrate disease management and chronic care coordination into the 
basic Medicare program. Beginning immediately upon enactment with a 
large-scale pilot program, the Secretary will test methods to help 
beneficiaries with chronic conditions, ensuring they receive preventive 
tests, procedures and treatments to better manage their disease and 
improve their health status and quality of life.
  This program will put the emphasis on prevention and treatment, 
rather than acute episodes of care. This is one of the most important 
reforms in the

[[Page S15762]]

conference agreement.  Beneficiaries with multiple chronic conditions 
account for the greatest share of Medicare spending. And low-income 
beneficiaries are more likely to suffer from multiple chronic diseases 
and to have poorer health outcomes than higher income seniors.

   Diabetes is a good example of how prescription drug coverage and 
prescription drug therapy along with a regular care regiment promise 
more effective treatment and outcomes. Approximately 17 million 
Americans suffer from diabetes and another 16 million adults are at 
risk for developing diabetes. Undiagnosed and improperly treated, 
diabetes can and will result in a host of complications that can result 
in disability and even death. These complications include kidney 
failure, blindness, heart disease and loss of limb. According to the 
American Diabetes Association, $91.9 billion dollars was spent last 
year in direct medical expenses for diabetics.
   Since 1995, five new classes of medicines have been introduced to 
treat diabetes. These medicines, coupled with health management and 
coordinated care programs, are powerful tools to increase health status 
and reduce complications. For example, a comprehensive disease 
management program for approximately 7,000 diabetic patients produced 
savings of $50 per diabetic patient per month. While pharmaceutical 
costs increased under the program, total health care spending declined. 
This was due to substantially fewer inpatient hospitalizations and 
reduced lengths of stay.
  All that stands between seniors and prescription drug coverage, 
disease management and improved health coverage is the upcoming Senate 
vote. I am confident that we will pass this conference report and send 
the legislation to the President's desk. Seniors deserve no less.
   Mr. President, millions of Americans experience serious health 
disparities based on ethnicity, race, gender, or a lack of access to 
health care. Great progress has been made in narrowing health 
disparities. Through advances in medical research and public policy, we 
are working to ensure better access to quality health care for all of 
our citizens. More, however, needs to be done. Let me list a few 
examples of where there are still serious disparities in health.
   The number of diabetes cases among African Americans has tripled 
since the 1960s. Moreover, African Americans experience higher rates of 
diabetes' most serious complications: blindness, amputation and kidney 
failure.
   One of seven Hispanics have diagnosed or undiagnosed diabetes and 
the prevalence of type-2 diabetes is twice as high in Hispanic 
Americans as in non-Hispanic whites.
   American Indians and Alaska Natives are 2.3 times as likely to have 
diabetes as non-Hispanic whites of similar age. Diabetes cases are more 
concentrated among American Indians in the southeastern United States.
  Asian Americans and other Pacific Islanders are approximately two 
times as likely to be diagnosed with diabetes as compared to their 
white counterparts.
  When it comes to cardiovascular disease, African Americans have the 
highest rate of high blood pressure of all groups and tend to develop 
it younger than others.
  Stroke is the only leading cause of death for which mortality is 
higher for Asian-American males.
  Breast and cervical cancer also hit African American women more often 
than their white counterparts.
  Although deaths caused by breast cancer have decreased among white 
women since the 1980s, African American women continue to have higher 
rates of mortality from breast and cervical cancer. African Americans 
are more likely to develop cancer than whites and are about 30 percent 
more likely to die of cancer than whites.
  In the Medicare legislation before us, we have an opportunity to 
address the problem of health disparities head on. Today, roughly 20 
percent of all Medicare beneficiaries are members of minority groups. 
And the Census projects that, by 2025, minorities will compose 35 
percent of all seniors. Racial and ethnic minorities covered by 
Medicare suffer from more illnesses and are more apt to live in poverty 
than white beneficiaries.
  So I am pleased that this bill particularly benefits racial and 
ethnic minorities, and assures that minority seniors and disabled 
people have access to needed medicines at affordable prices.
  The bipartisan Medicare agreement will ensure better Medicare 
coverage for minorities through new disease management services, a new 
``welcome to Medicare physical'' and new cardiovascular disease and 
diabetes screening programs. Beginning in 2005, each year, nearly 
360,000 newly enrolled minority Medicare beneficiaries will be covered 
for an initial physical examination. The initial preventive physical 
exam includes measurement of height, weight and blood pressure, and an 
electrocardiogram, as well as education, counseling and referral 
related to other preventive services.
  The bipartisan Medicare agreement includes new cardiovascular and 
diabetes screening blood tests that do not have deductibles or co-pays, 
so beneficiaries with limited resources who might not otherwise access 
these benefits are not deterred by the cost.
  Disease Management is being introduced into the original Medicare 
program to provide beneficiaries the tools and support systems to help 
them manage their chronic illnesses. Through these new benefits, 
conditions such as obesity, diabetes, heart disease, and asthma could 
be made far less severe for millions of Medicare beneficiaries, 
including those racial and ethnic minorities who suffer most from these 
conditions.
  The bipartisan agreement provides immediate help to those who need it 
most: low-income Medicare beneficiaries who do not have prescription 
drug coverage and do not qualify for Medicaid. This starts with the 
prescription drug discount card and builds on it to provide needed 
relief to low-income seniors with a generously subsidized drug benefit 
in 2006.
  Over 13 million beneficiaries under 65, across all racial/ethnic 
groups, have very limited financial means. But these limitations are 
particularly acute among some populations. In 1999, 46 percent of 
African Americans and 55 percent of Hispanics had incomes below the 
Federal poverty level, compared with 15 percent of white beneficiaries. 
Nearly two-thirds of African-American and Latino beneficiaries have 
incomes below twice the poverty level, compared with 41 percent of 
whites.
  Starting in 2006, more than 1.5 million minority beneficiaries will 
gain access to new drug coverage, including over a half million 
Hispanic and nearly 700,000 African-American Medicare beneficiaries. 
The Bipartisan Agreement will help cut their prescription drug bills in 
half. The poorest seniors--including nearly 2 million minority 
beneficiaries--with incomes below 100 percent of the Federal poverty 
level who are eligible for Medicaid would pay no premiums or 
deductibles, and would pay only nominal cost-sharing of $1 for a 
generic drug or a preferred multiple source drug and $3 for all other 
drugs.
  2.5 million low-income minority beneficiaries with incomes below 135 
percent of the Federal poverty level would pay no premiums or 
deductibles, and would only pay nominal cost-sharing of $2 for a 
generic drug or a preferred multiple source drug and $5 for any other 
drug. More than 400,000 minority beneficiaries, with incomes below 150 
percent of the Federal poverty level would get sliding scale subsidies 
for their premiums, and pay both a lower deductible and lower cost-
sharing compared to the standard benefit.
  In addition to the low-income benefit, the bill provides that the 
Federal Government will assume the costs of dual-eligible 
beneficiaries, allowing them to receive their medicines through a 
private-sector drug plan, remove the stigma of Medicaid coverage, and 
provide fiscal relief to the States that currently pay for them.
  Because only a third of African Americans and a quarter of Hispanics 
have Medigap or employer-sponsored retiree benefits, compared to two-
thirds of white beneficiaries, they are more likely to rely on Medicaid 
to supplement Medicare. In fact, 43 percent of dually-eligible 
beneficiaries are minorities.
  The bipartisan Medicare agreement improves services available to 
individuals suffering from these diseases. The agreement particularly 
improves access to prescription drugs and new services for low-income 
individuals,

[[Page S15763]]

many of whom are racial and ethnic minorities.
  The agreement includes critical provisions to study and disseminate 
the latest research on the comparative clinical effectiveness of 
prescription drugs and other health care services--including among 
specific patient subpopulations. This will ensure that patients and 
providers can make informed choices about their treatment options. It 
will also make prescription drugs more affordable for all Americans 
through important provisions, speeding generic drugs to market.
  Ultimately, by adding much-needed prescription drug coverage to 
services already covered by Medicare, the agreement ensures that these 
individuals have access to more comprehensive, higher quality health 
care and treatment options.
  The PRESIDING OFFICER. The Senator from Illinois.
  Mr. DURBIN. Mr. President, I sincerely hope we do something about 
unemployment compensation benefits. We will be gone for 2 months. Nine 
million Americans are out of work. Three million have lost their jobs 
since this President took office. Frankly, many of them have seen their 
unemployment benefits expire.
  Historically, traditionally, on a bipartisan basis, we have extended 
those unemployment benefits. I think it is a sad situation if we 
adjourn before this holiday season leaving literally millions of 
American workers without the basics they need to keep their families 
together. I hope if we do nothing else, we achieve that.
  Those who may be following this debate may wonder why, at 20 minutes 
to 10 this evening, on November 24, Senators are still on the floor 
speaking about this legislation. This bill, which in its totality is 
about 1,100 pages long--and the sponsor of it, Senator Grassley, my 
friend, has admonished me not to say that the bill is 1,100 pages long 
but that the bill and its committee report is that length--is a 
historic piece of legislation.
  There are some of us who believe, if this bill passes tomorrow, in 
the morning, as it is likely to do, that, frankly, for years to come 
people will be asking questions about how various Senators felt, how 
they voted, and what they did during the course of this debate. Those 
who support it believe it will be good and they take great pride in it. 
Those of us on the other side believe this legislation is an 
abomination. When we consider the opportunity we had and the challenge 
we had when this legislation was brought before us, this bill fails to 
meet the test.
  It fails in this respect: We started off saying we need to help 
senior citizens pay for prescription drugs. Medicare did not include 
that benefit, and it should have. We know now that prescription drugs 
keep seniors healthy and strong and independent. We should give them a 
helping hand to pay for those expensive drugs. I think everybody agreed 
with that premise.
  Then, when we started the debate, things started to change, because 
in order to achieve that goal many of us thought the Government would 
have to step in with some money to help seniors but also we would have 
to say to the drug companies, you have to charge reasonable prices for 
your drugs. I think those two go together.
  To think that the Federal Government is going to somehow subsidize 
the cost of prescription drugs and do nothing to bring those costs 
down, frankly, is counterproductive. We cannot appropriate enough money 
to keep up with the meteoric rise in the cost of prescription drugs 
that seniors and other families across America face.
  Sadly, the Senate passed a bill, supported by Democrats and 
Republicans, which at least moved in the direction of change but did 
not move far enough. It did not contain any cost containment. It did 
not challenge the drug companies in America to treat Americans fairly.
  That bill passed and went to conference committee. We hoped it would 
be improved, but it was not. In fact, the bill was worsened in many 
respects.
  As a result of that, many of us who had hoped for a prescription drug 
benefit for seniors are going to oppose this particular legislation 
because it does not achieve that goal.
  Sadly, it brings another element to the debate, for which many of us 
never bargained. There are those in the Congress who believe we have to 
basically dismantle and fundamentally change Medicare.
  Medicare, a system of health insurance for seniors across America for 
over 40 years, has given seniors quality of life and quality health 
care, and statistics prove that it has worked. Seniors live longer. 
They are more independent. They are healthier. Medicare has proven that 
if we have Federal leadership, we can have doctors and hospitals 
providing the best care to our mothers and fathers and our grandmothers 
and grandfathers.
  But there are some who opposed it from the beginning, calling it 
socialized medicine, and others who do not want to meet the obligations 
of Medicare as the baby boom generation qualifies to receive it. So 
they have set upon a path to basically change Medicare as we know it.
  That was never part of the bargain. This was supposed to be about 
prescription drugs and seniors. Instead, it switched into a new realm. 
The House Republican leadership pushed into this conference committee a 
dramatic, and some say drastic, change in Medicare for its future. That 
has forced many of us to not only oppose this bill but to oppose it 
strongly, believing our first obligation is to protect Medicare and our 
second obligation is to give seniors the benefit they need for 
prescription drugs.

  This bill has failed. This bill will raise Medicare premiums for 
millions of senior citizens. It will force many senior citizens into 
HMOs. I do not have to explain HMOs to people who have tried to live 
with them. A health maintenance organization or similar insurance 
company basically rations care. It picks the doctor, not the individual 
covered or insured. But the HMO will pick your doctor and pick your 
hospital.
  I think we have all heard the horror stories about HMOs that 
basically have denied care, denied basic medical procedures because 
they do not believe it is a worthwhile economic undertaking. So doctors 
make decisions about what you need to stay healthy, and HMOs overrule 
the doctors.
  Senator Kennedy, who is on the floor, and will speak after I do, has 
been a leader in this Senate, in the Congress, on a Patients' Bill of 
Rights. Why did we have to create a Patients' Bill of Rights? Because 
of the abuses of HMOs. And that is no surprise to people who have tried 
to live with them.
  Now, this bill, pushed by the Republican leadership, wants to move 
America's seniors out of Medicare and into these HMOs. They believe 
that is a better way to go, to ration health care through HMOs. They 
want the HMOs to pick the doctors and the hospitals. They do not want 
the seniors to choose them, as they do now under the Medicare plan.
  The original argument was that these private insurance companies, 
because they would be competing in the open market, would provide more 
economical care for seniors. But, of course, that premise was destroyed 
by this bill because they included in the bill a $12 billion slush 
fund, $12 billion of Federal tax dollars that will go to subsidize the 
HMOs. In other words, they not only do not have to prove profitability; 
they can enjoy a Federal subsidy as they try to lure the healthier 
seniors out of Medicare, leaving behind poorer and sicker Medicare 
recipients who will drive up the unit cost of care under that 
traditional program, making it more expensive to Congress and the 
American people, and its critics hope will lead it into a period of 
unpopularity and perhaps abandonment.
  I believe that is their ultimate goal. I think that is what they are 
setting out to do. They want to force seniors into HMOs, subsidized, 
incidentally, by Federal tax dollars. They want to undercut full 
Government funding of Medicare.
  That is not why I signed up for this debate. It is not the reason 
most Senators got involved in it. It, frankly, represents a distorted 
view of what we were setting out to do.
  It also is going to eliminate drug coverage for millions of retirees. 
The Congressional Budget Office, which makes projections, tells us that 
2.7 million retirees in America who currently have health care 
benefits, including prescription drugs--2.7 million will lose that 
coverage because of this bill.

[[Page S15764]]

  There is already a trend in America to take away health coverage for 
retirees. It is expensive. Many of the companies would like to get rid 
of it, if they can. The CBO tells us, the Congressional Budget Office 
tells us, this bill will create a lure and a force to draw these 
retirees out of their current health care benefits in retirement into a 
situation where they are not insured--2.7 million.
  In my home State of Illinois, 100,000 retirees will lose their health 
care benefits because of this bill. Was that ever part of the bargain? 
Did we go into the debate saying, we are going to provide prescription 
drug coverage to seniors but in the process 100,000 in my State are 
going to lose their health care coverage?
  That is the result, and not a result on which we are speculating. It 
is from the Congressional Budget Office, as they reported it to us.
  There is another element here as well. There is an element that I 
think really tells the story about why this bill is so popular in some 
quarters in Washington--not among seniors but with some special 
interest groups.
  You should have seen the area right outside the Senate Chamber this 
afternoon when the key votes were coming down. You could not even walk 
through. It was packed with lobbyists.
  Now, there is nothing wrong with lobbyists. Lobbyists perform a 
valuable function when they come to Government and tell us both sides 
of the story. As a Member of the House and Senate, I value lobbyists 
who are honest and tell me their side of the story.
  But if you took a look at the lobbyists in the hallway outside on 
this vote, you noticed, overwhelmingly, they were lobbyists supporting 
this bill and lobbyists representing pharmaceutical companies and HMOs.
  Why would pharmaceutical companies support a bill that is supposed to 
lower prescription drug prices for seniors?
  The obvious reason is that under this bill there is no cost control. 
There is no cost containment. There is no restraint on those drug 
companies charging even higher prices. In two particular areas, this 
bill is going to keep drug prices high, not just for seniors but for 
families across America. This bill virtually prohibits the 
reimportation of United States-made drugs from Canada and other 
countries. We have seen the news reports. Seniors in Minnesota, 
Michigan, and New England are traveling into Canada to buy drugs, 
American drugs, at a fraction of the cost. We put a provision in the 
House version of the bill and the Senate version of the bill to allow 
that trade to continue so that seniors could take advantage of the 
lower prices.
  I have always said that we are not importing drugs from Canada, we 
are importing political leadership from Canada. Canada and its 
Government stood up for its people and its senior citizens. Canada said 
to the drug companies, represented in our hallways by the lobbyists: 
You can't charge whatever you want to charge. You have to keep your 
charges reasonable.
  Because Canada imposed these standards and would not allow the prices 
to go sky high, they deeply discount the same drugs sold in America. 
This bill virtually closes the door for importation from Canada. It is 
the answer to the prayer of our pharmaceutical companies that don't 
want cheaper drugs coming to this country so they can sell more 
expensive drugs to Americans currently living here.
  Also, this bill prohibits Medicare from negotiating lower drug 
prices. When we started this debate on prescription drugs, virtually 
every senior I talked to said: Senator, I don't understand why it is 
taking so long to see the obvious. If Medicare as a program offered 
prescription drugs, that would be the best approach. It would be a 
universal voluntary program covering everyone under Medicare. Medicare 
as a program could bargain for lower drug prices and say to America's 
drug companies: If you want to sell us a drug for high blood pressure, 
then you have to give us a reasonable price or we will look to another 
company with a comparable drug. We do that with the Veterans' 
Administration. We could have done it with Medicare. But this bill 
expressly prohibits Medicare from entering into these negotiations to 
lower prices. Why? Because the same drug companies that fought 
reimportation of drugs don't want to bargain with Medicare. As a 
consequence, the seniors are the losers. That is basically what we are 
going to deal with. We are going to continue to see outrageously high 
prescription drug costs.
  Let me give an illustration of one element that I am not sure has 
been addressed during the course of this debate. That may be hard to 
believe after 3 full days and more of debate. This bill lacks any 
serious attempt to lower the cost of prescription drugs. We can 
reasonably assume that prescription drug prices will continue to rise 
about 15 percent annually as they have in the past. It is one of the 
most inflated costs in our health care menu of opportunities, 
prescription drug prices. One major employer in Illinois, Caterpillar 
Tractor Company, self-insured for health insurance, told me the price 
of prescription drugs was the biggest single problem they are facing 
for employees and retirees.
  Consider the example of a senior citizen struggling to make ends 
meet, the kind of senior we were supposed to help with this bill, a 
senior who in 2006, when this bill will first go into effect, has an 
income of $20,000 a year. That is probably in the high end for many 
seniors. Some survive on much less. But for purposes of illustration, 
this senior has an income of $20,000 and is struggling to devote 25 
percent of their income to paying a $5,000-a-year pharmaceutical bill. 
Five thousand a year is a little more than $400 a month. Believe me, I 
have met seniors who are paying an awful lot more than that.

  So here we have a senior, $20,000 in retirement income, and $5,000 in 
annual drug costs. Now let's consider what this bill is going to mean 
to that senior. This bill steps in and cuts that senior's costs by 
$1,080. That is not much. That is about 22 percent of the senior's 
costs. I think it ought to do more, but it is something, to cut the 
$5,000 bill by $1,080. That is what this bill does. But what happens 
when year after year the senior's income goes up at the rate of 
inflation, roughly 3 percent, while the pharmaceutical companies' 
charges for prescription drugs increase at 15 percent a year? Income 
going up 3 percent; cost of drugs going up 15 percent a year.
  By the year 2015, 9 years after this bill goes into effect, the 
senior's income will have grown 30 percent to $26,000. The drug costs 
of $5,000 when it started will have mushroomed to $17,600, a 15 percent 
increase unchecked versus a 3 percent increase in income. Do you know 
how much of that $17,600 will be paid by the Government under this bill 
when we have this period of time, 9 years after it goes into effect? I 
can tell you: It is $3,800--22 percent of what the senior is supposed 
to pay. So the senior's out-of-pocket prescription drug costs, not paid 
by the Government, would be $13,800, 53 percent of the senior's income. 
So even with the assistance under this bill, unchecked prescription 
drug inflation will drive seniors in a decade or more from spending a 
fourth of their income on prescription drugs to spending more than half 
of their income under the scenario I have just described.
  Why? Senior citizens' out-of-pocket drug costs go up even with this 
bill because the bill does nothing to rein in unsustainable inflation 
in prescription drug costs. That doesn't help seniors. They need us to 
take action to bring down the cost of medication.
  If you take a look at the pharmaceutical companies and their approach 
on this bill, here is what they wanted when we started this debate. 
They wanted private-insurer-administered drug benefits that dilute 
purchasing power. They got it. They wanted financial incentives for 
HMOs, another step away from Medicare. They got it. They wanted a 
prohibition on Medicare negotiating prices. They received it, which I 
think is the fatal flaw in this legislation. They wanted meaningless 
reimportation. They got it. So getting drugs from Canada becomes even 
more difficult. They wanted watered down generic drug access 
provisions. They were successful. They wanted no public scrutiny of 
secret PhRMA-insurer kickback arrangements. They got that protection. 
And, finally, they wanted huge windfall profits, and they will get it.
  Wall Street has already costed this out. Pharmaceutical stocks, which 
were already the most profitable in America, will continue to be such. 
The

[[Page S15765]]

loser will be senior citizens who were supposed get the help. That is 
why the pharmaceutical companies line up outside the door to 
the Chamber cheering for those who want to vote for this bill--because 
they know it means more money in the bank.

  What I have given you here is not an extreme example; $5,000 a year 
for prescription drugs for a senior is sadly a reality. The seniors who 
will face this without a helping hand from the Government in terms of 
paying these inflated costs of drugs are going to struggle, and they 
may not succeed in paying for those drugs.
  Let me show you this, too. Here are the compensation levels of those 
who run HMO insurance companies I described earlier. Remember what I 
said: The intent of this bill is to move seniors out of Medicare into 
HMOs. These are compensation levels: For companies such as Aetna, here 
is their CEO, he received $8.9 million; Anthem, $6.8 million; CIGNA, 
$5.9 million; Coventry, $21.6 million compensation for their CEO; 
Health Net, $6 million; Humana, $1.6 million; Oxford, $76 million for 
Mr. Norman Payson, not a bad year; PacifiCare, $3 million; Sierra 
Health, $4.7 million; and then we get down to United Health Group, this 
group with a CEO by the name of Mr. Channing Wheeler; he received $9.5 
million in compensation.
  I would like to stay with United Health Group for just a moment. This 
is not just another HMO, this is an HMO that is extraordinarily blessed 
by this bill. Let me tell you why. In addition to $12 billion in a 
slush fund to subsidize and underwrite HMOs that are going to compete 
with Medicare, there is an additional provision in here that gives $6 
billion for a theory of health insurance called health savings 
accounts. If you have followed the debate in Washington, you may know 
that some 9 years ago, a company based in Lawrenceville, IL, the Golden 
Rule Insurance Company, dreamed up this basic insurance idea that said: 
We will say to people that if you will take a high deductible health 
insurance policy and do not use all that you could in terms of health 
expenses during the course of the year, we will refund some of your 
money at the end of the year; so it is not only health insurance lite 
but a chance to recoup your money. They called it medical savings 
accounts. This was the darling of then-Speaker Newt Gingrich and his 
conservative Republicans.
  They believed this was the answer to America's prayers for health 
insurance. We have eventually put in a demonstration project and said 
let's at least try this concept and see how many people want to buy 
into it. It was a dismal failure. Very few people signed up. That 
didn't stop the efforts to include some provisions to help that concept 
of medical savings accounts--now called health savings accounts--in 
this bill--not just to help them get started but a $6 billion slush 
fund of Federal tax dollars to underwrite health savings accounts.
  Let me say, it is not a one-way street. In order to win the attention 
of Congress and $6 billion in Federal subsidy, Golden Rule, over the 
past 12 years, has been extraordinarily generous to political 
candidates. They donated $3.6 million to political parties in 
candidates--90 percent to the Republican Party. Mr. Gingrich received 
more campaign contributions from Golden Rule than any other Federal 
officeholder over the past 12 years. In fact, he became their poster 
child and appeared on their television advertisements. The list goes on 
and on about Golden Rule and all the political contributions they have 
made.
  This bill contains $6 billion for health savings accounts, such as 
those that have been devised by Golden Rule. This is how it works. 
Consumers or employers buy high-deductible policies. The deductible is 
at least $1,000 for individuals, $2,000 for families. The consumer or 
employer can put as much as $5,000 a year for an individual and $10,000 
for a couple into the account. The contributions are tax deductible. 
Money can accumulate tax free. Withdrawal of the money is also tax 
free. It is virtually an unprecedented tax shelter that is being added 
here and subsidized with $6 billion. The funds can be withdrawn to pay 
medical expenses, including items not normally covered, such as 
cosmetic surgery.
  The problems are numerous. First, it compromises the current health 
insurance system. People who purchase high-deductible health insurance 
policies are the healthiest among us. As they opt out of traditional 
plans, the risk pools in those traditional plans are compromised, 
leaving people behind to pay higher premiums.
  Past research by Rand, the Urban Institute, and the American Academy 
of Actuaries have found that premiums for comprehensive insurance could 
more than double if these health insurance accounts become widely used.
  Second, wealthy Americans are likely to use these as tax shelters.
  In 1996, HIPAA established a demonstration project of health savings 
accounts. The GAO evaluation of the investigation showed that 
investment firms such as Merrill Lynch entered the health savings 
account market because of insurer perceptions that HSA enrollees were 
using their accounts primarily as tax-sheltered savings vehicles rather 
than sources of tax-sheltered funds for paying medical expenses.
  So here we are setting a new precedent in tax policy. The financial 
service industry loves it--$6 billion. Now you might ask yourself: What 
do health savings accounts have to do with prescription drugs for 
seniors? The answer is nothing. Well, what do health savings accounts 
have to do with Medicare and seniors in general? The answer is nothing. 
The $6 billion subsidy in this bill for health savings accounts is 
making good on a promise by Republican leadership to reward their 
friends--in this case, Golden Rule. But wait, there is more to the 
story.

  Golden Rule as an insurance company doesn't exist anymore. It sold 
out. The purchaser was United Health Group. R. Channing Wheller is 
their CEO who made $9.5 million. They are basically the architects of 
the health savings account, this HMO.
  The story gets even more interesting. This is a publication of AARP. 
It comes from October of this year. AARP makes a lot of money by 
selling insurance to seniors. If you open here, this is page 24 and 25, 
those two pages, you will see three advertisements from AARP on behalf 
of United Health Care Insurance Company's insurance plans. What is the 
connection? AARP receives millions of dollars from the sale of health 
insurance policies and stands to gain under this bill. The AARP 
insurance-related revenues made up a quarter of their operating 
revenues last year and one-third in 2001. They receive royalties from 
policies marketed by United Health Group, the one that purchased Golden 
Rule. Last year they earned $3.7 billion in premium revenue from their 
offerings to AARP members--$3.7 billion. This one company.
  The royalties AARP earned as a result of that amounted to $123 
million; access fees, $10 million; quality control fees, almost a 
million dollars. AARP also earns investment income on the premiums 
received from members. That is a total of $161.7 million in revenue 
from insurance. According to Advertising Age Magazine, AARP and United 
Health Group hired a direct marketing agency in May to conduct a 
marketing campaign that could cost $100 million.
  United Health Group is going to be one of the biggest winners under 
this bill we are considering and will vote on tomorrow. It will be a 
big winner in at least two different directions: First, as an HMO, it 
is entitled to part of the $12 billion slush fund to lure seniors out 
of Medicare into their HMO. Secondly, because they have now bought 
Golden Rule, they will be authors of insurance policies called health 
savings accounts, which receive another $6 billion subsidy; and guess 
who is in on it as well. Our friends at AARP.
  It is curious to me when seniors who belong to AARP have been asked 
whether they like this bill, they overwhelmingly say no. Let me get 
this figure right; I don't want to misstate it. When asked last week 
whether they supported this bill--AARP members nationally, in a poll 
conducted--56 percent opposed it and 18 percent supported it; 56 
percent of the seniors in AARP opposed it and 18 percent supported it.
  Yet Mr. Bill Novelli and AARP have been leading the charge to pass 
this bill. If it is not that popular among AARP members, what is going 
on? There is money to be paid. AARP is

[[Page S15766]]

going to be selling insurance through the United Health Group with a 
massive Federal subsidy, and through the old Golden Rule health savings 
account with another massive Federal subsidy. They are not listening to 
seniors; they are listening to the insurance companies, to the HMOs, 
and that is a sad thing.
  This bill squanders $6 billion that should have been paid for retiree 
coverage of prescription drugs, creating these new health savings 
accounts that ordinary Americans cannot afford, undermining employer-
based coverage, $6 billion that should have been used to prevent the 
loss of retiree coverage. As I mentioned earlier, some 25 percent of 
the revenues going to AARP came off of insurance royalties.
  So you ask yourself if the membership of this organization doesn't 
care for this plan and opposes this plan, by a margin of more than 
three to one, why then is AARP front and center running ads in 
newspapers, television, and radio across America? Because, frankly, the 
ads are paid for by HMOs and pharmaceutical companies and represent an 
effort by the current leadership of AARP to jam down the throats of 
senior citizens a proposal they do not support.
  What I suggest to seniors across America who are following this 
televised debate is this: If you belong to AARP, call them first thing 
in the morning at 1-800-424-3410 and tell them to stand up for seniors, 
don't stand up for the insurance companies. Don't stand up for 
pharmaceutical companies, stand up for seniors across America.
  I, frankly, went back to Chicago this weekend and met with many 
people who said they have had it with AARP. They have no idea what 
happened to an organization created to serve seniors and, frankly, is 
turning its back on the seniors who needed help the most. That, to me, 
is a sad commentary. Someone said, basically, if you want to know about 
legislation, whether it is good or bad, ask the basic question: Who 
wants it? Who wants this bill, this 1,100-page monstrosity?
  It isn't senior citizens. Overwhelmingly across America they say we 
don't want it. They are calling my office and every office on Capitol 
Hill. They want help to pay for prescription drugs they can understand. 
They want it under Medicare so the costs can be contained. They didn't 
want a full-scale attack on the Medicare system itself, and that is 
what has happened.
  Sadly, we know who really wants this bill: the pharmaceutical 
companies that stand to make outrageous profits into the future without 
any competition, and the HMOs that, with their Federal subsidies, will 
be luring these seniors out of Medicare.
  This was an extraordinary and historic opportunity for the Senate and 
the Congress to do something meaningful. Forty years ago, when we 
created Medicare, the doctors across America opposed it saying it was 
socialized medicine. They did not want the Government involved. A few 
years after the fact, they realized Medicare was not only great for 
seniors but not bad for the medical profession either. They have been 
able to expand their practices, create more hospital care, and make for 
a healthier America.
  It worked to everyone's advantage, but the special interest group at 
the time, the AMA, was opposed to it. Today this is a product of 
special interest groups. This is not a product that was designed for 
seniors. It was a product that was designed to reward friends--the 
pharmaceutical companies that have spent $139 million lobbying Congress 
over the past 6 months, as well as the HMOs, Golden Rule, and all the 
old buddy network.
  They may win tomorrow, but this I will predict: When this bill goes 
into effect in 2006, conveniently after the next Presidential election 
so that all of the bad impact of it won't be realized, when this bill 
goes into effect and seniors across America realize they have been had, 
the telephone calls that Congressmen and Senators are receiving today 
will pale in comparison.
  Woe to those Senators and Congressmen who stand for reelection having 
voted for this bill when it goes into effect in 2006. When the seniors 
realize how complicated it is, how unfair it is, the gaps in coverage, 
the fact there is no control on the price of drugs, the fact that the 
cost of Medicare is going to increase and that they are going to be 
forced into HMOs with no choice of doctor or hospital, there is going 
to be a reaction which you will not forget.
  I served in the House when we passed something called catastrophic 
insurance. We thought it was a pretty good idea. I voted for it. The 
seniors read the fine print and rejected it. When they rejected it, we 
were forced to repeal that law. It is the only time I recall in my 
congressional career we have done that.
  Trust me, after this goes into effect in 2006, this Congress is going 
to be scrambling to repeal the most outrageous portions of this bill. 
And all those who think we are going to get by with a slogan about 
prescription drugs for seniors are in for a rude awakening.
  The seniors across America are men and women who have worked hard all 
their lives, people of common sense who are not going to fall for what 
the AARP and so many organizations are now pushing in their faces and 
saying they must accept. They are going to reject it, and when they 
reject it, they will reject those who voted for it. I hope my 
colleagues will think twice before they vote tomorrow morning.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Enzi). Who seeks time? The Senator from 
Massachusetts.
  Mr. KENNEDY. There was a time in America when our citizens worked 
hard their entire lives and prepared themselves as well as they could 
for their own retirement. But for millions of Americans, retirement 
meant misery, poverty and abandonment. They were on their own with no 
financial security and no health care in what was called, with great 
irony, the golden years of their lives. But all that changed in the 
wake of the Great Depression.
  The scandalous neglect and serious hardship of the elderly was no 
longer tolerable. In the 1930s, Congress and the administration made a 
promise to our people. We guaranteed that any American who works hard, 
plays by the rules, and pays taxes will earn well-deserved financial 
security in retirement. A generation later, we added health care to 
that commitment. And ever since, the two most successful and beloved 
programs in the nation have been Social Security and Medicare.
  The legislation before us today is a shameful attempt to break that 
promise. It's a right wing Republican assault on Medicare in the guise 
of a prescription drug program, and Republicans know it. They know that 
this bill will force millions of seniors into HMOs, and deny them their 
choice of doctor and hospital. They know that this bill does nothing to 
control the skyrocketing cost of prescription drugs. They know that 
it's a fat deal for HMOs and pharmaceutical companies--and a raw deal 
for the elderly. They know it's a dress rehearsal for the coming 
assault on social security.
  It's a con job on America's seniors, and they are trying to rush it 
through Congress before anyone knows what's going on.
  Why else would Republicans rig a vote to pass it in the House of 
Representatives in the dead of night?
  Why else would they shamelessly ram it through the Senate over a 
weekend?
  Why else would they vote to overturn the senate rules so that this 
conference report can pass?
  In the few hours of this debate, the proponents of this flawed 
legislation have described their proposal in the most benign--and 
misleading--terms. They say that this bill gives seniors the freedom to 
choose among competing plans. They say at least it gives protection to 
the poorest of seniors. They say it will lower drug prices through 
competition. They are absolutely wrong on all of these points.
  This partisan proposal has been carefully and coldly calculated, not 
to protect Medicare but to destroy it, and leave the millions of senior 
citizens who rely on it today without a lifeline in the future.
  It is the first step towards a total dismantling of Medicare. In 
exchange for destroying Medicare, it offers senior citizens a limited 
and inadequate drug benefit. The moment it is implemented, it will make 
nine million senior citizens--almost one quarter of all senior 
citizens--worse off than they are today.
  Seniors already have the most important choice they want--the choice 
of

[[Page S15767]]

the doctors and hospitals they trust. That it the choice they will lose 
if they are forced to join HMOs or other programs that say an insurance 
company will choose their doctor for them.
   Senior citizens already have the choice to join a private insurance 
plan competing with Medicare if they choose. But nine out of ten prefer 
to keep their Medicare. The bipartisan bill that passed the Senate 
earlier this year provided a reasonable additional choice--to receive 
prescription drug coverage under Medicare, or to receive that coverage 
through a private-sector drug plan.
  But the conference report adopted the unacceptable House approach of 
ending Medicare as we know it. It establishes a massive demonstration 
program that will subject seven million senior citizens--one out of 
every six--to a so-called premium support program. The only purpose of 
premium support is to raise the premium in regular Medicare so that 
senior citizens will have to join HMOs to get affordable health care. 
That's not competition. That's compulsion.
  If that weren't bad enough, the conference report lavishes massive 
subsidies on HMOs and other private insurers to help them ``compete.'' 
For every senior citizen who joins an HMO, the government will pay a 25 
percent mark-up--almost $2,000--more than it would cost to provide that 
same senior citizen with the same service under Medicare. As a result 
of this bill, insurance company revenues will increase by $150 billion 
a year. That's not competition. It's corporate welfare. It's robbing 
Medicare and robbing senior citizens to enrich powerful special 
interests and big campaign contributors. It's creating a grossly tilted 
playing field on which Medicare cannot compete and senior citizens will 
be the losers.

  Proponents of this plan admit that the benefits for most seniors are 
small. But, they say, look at how much we are helping low income 
seniors. What they don't say is that 6 million of the poorest of the 
poor senior citizens and disabled beneficiaries who currently receive 
drug benefits under this bill will actually be worse off. Medicaid will 
be prohibited from supplementing Medicare coverage. These poorest of 
the poor will find the cost of the drugs they need increased and their 
access to needed medicines reduced. Their rates of hospitalization, 
injury, and even death will go up.
  In addition, almost 3 million seniors, many with low incomes, with 
good retirement drug coverage today will lose it as the result of this 
bill. That's not progress. It's a massive retreat. As the old saying 
goes, our Republican Colleagues really do love the poor, because they 
are creating so many of them.
  Some low income seniors may get better drug coverage under this plan, 
but only at the price of the destruction of the Medicare that all 
seniors love, low and moderate income alike. No senior citizen should 
be faced with this Sophie's choice between the drug benefits they need 
and the dismantled Medicare they will face under the GOP plan. We 
passed a bipartisan bill in the Senate and that did not sacrifice 
Medicare on the altar of right-wing ideology. If we voted down the 
destructive, partisan bill before us, the Senate will have another 
opportunity to do the job right.
  The drug industry too will reap a bonanza under this bill. If 
prescription drug prices continue to rise at double-digit rates, the 
minimal savings this bill provides to the average senior will be wiped 
out in no time by higher drug costs. This bill does nothing meaningful 
to hold prices down. In fact, far from moderating increases in drug 
costs, the Congressional Budget Office estimates that they will 
actually rise as the result of this legislation. No wonder the stock of 
our four leading drug companies went up $8 billion today.
  It doesn't allow drugs to be imported from Canada. It even bans the 
Secretary of HHS from bargaining for better drug prices for Medicare.
  The Senate is on trial today, and we will soon vote on whether to 
stop this charade. I urge my colleagues to stand up and fight. Fight it 
for the worker who paid into his company's' retirement fund for 20 
years. Fight for the three million retirees like him who will lost 
their health insurance because of this bill.
  Fight for city workers like those in Springfield, MA, whose brave 
mayor plans to obtain cheaper prescription drugs for them from Canada.
  Fight it for the elderly grandmother on Medicaid, and the 7 million 
poor Americans like her, who count every penny, who can't begin to pay 
for their prescription drugs under this bill.
  Fight for the 36 million seniors who want to stay in the Medicare 
they love, and with the doctors and hospitals they choose.
  Fight it to keep billions and billions of Medicare dollars that come 
out of your paycheck from lining the pocketbooks of big drug companies 
and HMOs. That's your money going to your Medicare, and it should pay 
for your prescription drugs, not inflated profits of the drug industry 
and the insurance industry.
  Fight for a nation that keeps its commitments to our seniors--who 
fought our wars, raised our families, and built our economy. How can we 
turn our backs on them now?
  The more the American people learn about this legislation, the more 
they dislike it. The more senior citizens learn about it, the more they 
oppose it. Let us not turn our back on Medicare now. Let us not turn 
our back on senior citizens so that insurance companies and 
pharmaceutical companies can earn higher profits. Let us vote no on the 
disgraceful bill, and come back and do the job right.
  And we will do that job right, even if it takes the election of a new 
Congress and a new President to do it.
  The Democratic Party fought for years to enact Medicare. We will 
fight for as long as it takes to save Medicare and to provide senior 
citizens the comprehensive prescription drug benefit they need.
  We will fight today. We will fight this year. We will fight next 
year. We will fight this issue in every State and congressional 
district in 2004--and we'll keep fighting until, once again, the 
fundamental values of compassion and justice rate higher than more 
wealth for those who are already wealthy, and more power for those who 
are already powerful.
  For those who have not been following this debate in detail, let me 
review the particulars of this conference report. The more the American 
people understand what this bill does, the more they will demand that 
it be rejected.
  Medicare is a solemn commitment between the government and the 
people. It says, ``Pay into the system during your working years, and 
we will guarantee you affordable, quality health care in your 
retirement years.'' For 40 years, a fundamental part of that commitment 
is a guarantee that senior citizens can choose the doctors and 
hospitals they trust to provide them the medical care they need.
  Today, there are those who want to break that commitment. They want 
to force the elderly into HMOs, where insurance company bureaucrats, 
not patients, choose the doctor. They want to replace the solid 
guarantee of affordable Medicare anywhere in the country with a system 
where what you pay depends where you live. They want to take our 
country back to the 19th century, when Government was by the wealthy 
and powerful and for the wealthy and powerful--and the weak, the poor, 
the members of working families, and the elderly were left out and left 
behind.
  For a number of years, we have been working to improve Medicare by 
adding a much-needed prescription drug benefit. Democrats and 
Republicans alike have campaigned on that issue. Democrats and 
Republicans alike have promised senior citizens and their families to 
fill the largest gap in Medicare protection--its failure to cover the 
high cost of prescription drugs. How in the world, the American people 
are asking, did we get from that non-partisan objective of improving 
the Medicare program with a prescription drug benefit to a partisan 
proposal to radically alter Medicare for the benefit of the insurance 
industry?
  In July, the United States Senate passed a bipartisan program to add 
prescription drug coverage to Medicare. Seventy-six members of the 
Senate, Republicans and Democrats alike voted for the legislation. Ten 
Republicans and 10 Democrats voted no.
  By contrast, the House of Representatives passed a bill to radically 
change Medicare.
  It included prescription drug coverage--but only as a trojan horse 
for

[[Page S15768]]

the radical changes that were their real objective. Their bill was 
designed to privatize Medicare, to force senior citizens to join HMOs 
and other private insurance plans, and to benefit the wealthy and 
powerful at the expense of senior citizens. It was a radical program 
designed to by those who, in their arrogance, believe they know what is 
best for senior citizens. Senior citizens may not want to join HMOs or 
other private insurers--but in the view of the writers of this 
legislation, that's because they just don't know what's good for them.
  The House bill picked up where President Bush left off. The President 
proposed that senior citizens couldn't get a prescription drug benefit 
at all unless they joined an HMO or other private insurance plan. That 
plan generated such a wave of public outrage that Republicans had to 
withdraw it. But the House bill achieved the same objective by 
proposals that were less blatant but equally effective.
  Because the House bill was about radically restructuring Medicare 
according to the right wing blueprint, it could not command bipartisan 
support. It passed by the House by a narrow partisan majority of a 
single vote.
  The report the conference produced--with all but two of the 
Democratic conferees excluded from the deliberations--was the partisan 
House proposal all over again. That's why the vote in the House this 
morning was just as partisan, just as narrow, and only achieved by the 
most extraordinary perversion of House rules. Now it is up to the 
Senate to prevent this travesty from becoming law.
  This is no longer a bill to provide senior citizens a drug benefit. 
It is a bill to reward powerful special interest and to force senior 
citizens into the unloving arms of HMOs and insurance companies. It is 
a right wing program to privatize and voucherize Medicare. It asks the 
elderly to swallow unprecedented and destructive changes to the 
Medicare program in return for a limited, inadequate, small 
prescription drug benefit. It does nothing to drug costs. It gives the 
pharmaceutical industry a free ride--and sticks senior citizens with 
the bill. And this conference report is so ill-conceived that not only 
does it put the whole Medicare program at risk; it makes nine million 
seniors--almost one-quarter of the Medicare population worse off the 
day this program is implemented than they are today.

  One of the most important of these destructive changes is a concept 
called ``premium support.'' It should really be called senior citizen 
coercion support, or maybe it's called ``premium support'' because it 
uses Medicare premiums to support HMO profits. It replaces the stable, 
reliable premium that senior citizens pay for Medicare today with an 
unstable, unaffordable premium.
  Here's how it works. Today, Medicare premiums are set at 75 percent 
of the costs for Part B of the Medicare program, the part that pays for 
doctor care. Beneficiaries pay the remaining 25 percent. The premium is 
the same no matter where you live. It increases from year to year at 
the same rate as Medicare doctor costs. It is a stable, reliable 
amount.
  Premium support stands this system on its head. The Government 
contribution to private plans would no longer be based on a fixed 
amount. Neither would the charges to Medicare beneficiaries. Instead, 
the Government contribution to both private plans and Medicare would be 
based on the average of what plans charge and Medicare costs. If plan 
charges were lower than Medicare costs, the Government payment to 
Medicare will go down--and Medicare premiums will go up. And instead of 
Medicare premiums being a single, reliable, fixed amount that goes up 
only with increases in Medicare costs, Medicare premiums will be 
different in every county in the country.
  And they will fluctuate wildly from year to year, depending on what 
private plans choose to do and how many people enroll in them.
  We all know what is going on. Insurance companies can make big money 
by offering low-cost health insurance to healthy senior citizens. This 
program will drain healthy seniors from Medicare, and leave behind 
those who are sick and need help the most. It will send Medicare 
premiums through the roof--and it leave the elderly and disabled in the 
cellar holding the bag.
  Under premium support, the administration's own estimates show that 
average Medicare premiums will initially jump 25 percent. Several years 
ago, the estimate was a whopping 47 percent. The truth is that no one 
really knows how high Medicare premiums could rise. But we do know 
this. Over time, the increase will become higher and higher. And that's 
just average premiums. Under premium support, how much you pay will 
depend on where you live and the amount could change dramatically from 
year to year.
  In my own state of Massachusetts, a senior citizen who happens to 
live in Barnstable county will pay $500 a year more for their Medicare 
than one who lives in Hampden County.
  In Florida, you will pay $900 in Osceola and $2,000 if you live in 
Dade County. And it's the same all over the country. In Washington 
State, you'll pay $1,225 if you live in San Juan and $700 if you live 
in Clark. In California, you'll pay $1,700 if you live in Los Angeles 
and $775 if you live in Yolo. In Oregon, you'll pay $1,325 if you live 
in Yamhill and $675 if you live in Columbia.
  Why would anyone want to make these destructive changes to the 
Medicare program that has served senior citizens so well for almost 
forty years? The answer is a radical ideology that says Medicare is 
bad. HMOs and PPOs are good. And if senior citizens don't agree, we'll 
make sure that their premiums keep going up until they are forced to 
give up the doctors they trust to get the medical care they need.
  Some of supporters of this program claim it is just a demonstration--
nothing to get excited about. But it's not a demonstration. It is a 
vast social experiment using senor citizens as guinea pigs. Under the 
terms of the demonstration, 7 million senor citizens could be forced 
into this program. That's one out of every six seniors in the country. 
Half the States in this chamber have local areas where senior citizens 
could be forced to take part in this demonstration.
  And that is just today. Tomorrow, the proponents of this misguided 
policy will ram through changes that will force 10 million senior 
citizens, or 20 million, or the whole country into this plan. If we 
pass this bill, we're not just putting the camel's nose under the tent. 
We're putting the head and the hump in, too.
  The people who support this program make no secret of what they want 
to do. They are on record as thinking the Medicare is outdated, that it 
should be scrapped, and that seniors should be forced into HMOs. That's 
the same philosophy the President embraced when he initially proposed 
to give senior citizens a drug benefit only if they joined an HMO or 
PPO. I respect their opinions, but it is wrong to use senior citizen's 
need for prescription drugs as a club to force through a radical change 
in Medicare that could never pass muster on its own.
  Premium support is only one of the ways that this plan would 
privatize Medicare and force senior citizens to choose between the 
doctors they trust and the prescription drugs they need. The conference 
report pumps up the payment to private plans to a level where Medicare 
could be uncompetitive.
  It's fiscally irresponsible and unfair. It's using the elderly's own 
Medicare money to destroy the program they depend on.
  The bill lavishes largesse on the private sector by stealing from 
Medicare in three ways.
  First, the payment formula in the conference report is the same as 
the House's--and it raises payments to private plans so that they are 
109 percent of Medicare's costs for caring for the same person.
  Is that not odd? The private sector is supposed to be more efficient 
and save Medicare money--but Medicare, under this report, is paying 
them 9 percent more than it would provide Medicare to cover the same 
services.
  But that is only the beginning. According to the CMS's own studies, 
Medicare pays an additional 16 percent in excess of Medicare's own 
costs to private insurance companies because the senior citizens who 
join Medicare HMOs are healthier than those who do not.
  So under this bill, Medicare is going to be paying a 25 percent 
markup for

[[Page S15769]]

every senior citizen that goes into an HMO--nine percent for the 
payment differential put into this bill and 16 percent for the health 
differential--and that is before you add in a $12 billion slush fund 
for PPOs that this bill also contains.
  The Medicare trust fund--that today's retirees paid into and rely 
on--will be robbed to lavish billions of dollars on HMOs and insurance 
companies. Senior citizens will pay for this largesse not only in the 
depletion of the Medicare trust fund, not only in lesser resources for 
benefits they need, but in higher Medicare premiums. Why? So HMOs and 
insurance companies can profit.
  Last week, I released a new report by the staff of the Health 
Committee analyzing the impact of this program on HMO and insurance 
industry revenues and profits.
  The data is drawn from the projections of the Medicare actuary, the 
Medicare Trustee's report, and publicly reported data on the insurance 
industry. The results are sobering. As the result of this bill, annual 
revenues of the insurance industry will increase by an incredible $150 
billion a year. Profits from Medicare business will increase by 500 
percent. And this huge bonanza to the private insurance industry will, 
in the words of the Medicare actuary, ``increase Medicare costs 
significantly.''
  I ask unanimous consent that the study be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   The Impact of Republican Medicare Proposals on Insurance Industry 
                          Revenues and Profits


 A Senate Committee on Health, Education, Labor, and Pensions Minority 
                    Staff Report, November 20, 2003

        H.R. 1, the House Medicare Prescription Drug and 
     Modernization Bill passed by the House of Representatives 
     earlier this year, includes a number of provisions described 
     by its sponsors as intended to enhance Medicare beneficiary 
     choices and encourage competition. Most of the relevant 
     provisions of the proposed conference report are identical to 
     H.R. 1. This report by the minority staff of the Senate 
     Committee on Health, Education, Labor and Pensions examines 
     the impact of these proposals on the revenues and profits of 
     Health Maintenance Organizations (HMOs), Preferred Provider 
     Organizations (PPOs), and the private health insurance 
     industry.
        The report concludes that Medicare revenues of HMOs and 
     PPOs will increase from $31 billion this year to $181 billion 
     in 2010 under the Republican plan. Profits will increase by 
     $4.4 billion based on an average profit margin, or $18 
     billion based on profits of the most successful plans. 
     Overall, Medicare revenues and profits of the private 
     insurance industry will increase by 490 percent in 2010 under 
     the Republican plan. Increases under the premium support 
     program, which begins in 2010, will be even higher.

                               Background

     Competition with the Private Sector in the Medicare Program 
         Today
        Senior citizens already have a choice today between 
     Medicare and private insurance plans offering Medicare 
     benefits through the Medicare+Choice program. The program is 
     open to most types of insurance plans--HMOs, PPOs, and fee-
     for-service indemnity plans--but almost all the participating 
     plans are HMOs. Eleven percent of Medicare beneficiaries are 
     enrolled in Medicare+Choice plans.
        Under Medicare+Choice, participating plans must offer 
     Medicare benefits. They receive a payment from Medicare that 
     is supposed to represent what it would have cost Medicare to 
     serve the same enrollees under the regular Medicare program. 
     Originally, the Medicare payment was set at 95 percent of 
     Medicare's cost, on the theory that those who would enroll in 
     private sector plans were healthier than the average Medicare 
     beneficiary. As a result of subsequent modifications in the 
     payment formula, Medicare payments to private sector plans 
     now average 103 percent of Medicare costs.
       Adjusting for the fact that those who enroll in private 
     sector plans are healthier than the average Medicare 
     enrollee, the extra cost to Medicare when a beneficiary 
     enrolls in a private plan is substantially higher than three 
     percent. According to a study by the Department of Health and 
     Human Services, Medicare+Choice plans are overpaid by 16.3 
     percent, solely because their enrollees are healthier than 
     those who remain in traditional Medicare. The combination of 
     the current payment formula and the difference in health 
     between those who receive services from traditional Medicare 
     and those who enroll in Medicare HMOs means that private 
     insurance plans are paid almost 20 percent more than it costs 
     Medicare to provide the same services.
     Competition with the private sector under Conference proposal
       The conference proposal changes the terms of competition 
     between Medicare and the private sector in three ways: It 
     establishes a new category of private plans--regional PPOs--
     eligible to enroll Medicare beneficiaries and receive 
     Medicare payments for their care. It increases Medicare 
     payments to private plans to an average of 109 percent of 
     Medicare costs, compared to 103 percent today. Beginning in 
     2010, it establishes a new system of payments for both 
     private plans and Medicare called ``premium support.''
       Under the premium support system, the Medicare payment to 
     private plans and the Medicare contribution to the cost of 
     the Medicare Part B program are no longer fixed amounts 
     Instead, they are based on a weighted average of the Medicare 
     ``benchmark''--the payment that would be made to private 
     plans under the old system--and the charges of the private 
     plans. If the charges of the private charges and Medicare 
     will contribute less to the cost of those who enroll in 
     Medicare--raising the premiums that Medicare would otherwise 
     charge to beneficiaries. In addition, since the Medicare 
     premium is now based on the charges of private plans in the 
     same area, the Medicare premium will vary depending on where 
     the beneficiaries live. It will no longer be a uniform 
     nationwide premium.
     Revenues and Profits of HMOs and Private Health Insurers
       In 2003, the revenues of HMOs and other private health 
     insurers are estimated to be $580 billion. Profits are 
     estimated to be $16.8 billion, and the industry average 
     profit will be 2.9 percent. Some HMOs have significantly 
     higher profit margins than the industry average. United 
     HealthCare's profit margin averaged 8.7 percent in 2002, and 
     profits are expected to increase by more than a third for 
     2003, to 12 percent.

   Impact of Conference Proposal on Revenues and Profits of HMO and 
                        Private Health Insurers

       Revenues. The CMS Medicare Actuary has estimated that if 
     H.R. 1 is enacted, 43 percent of all Medicare beneficiaries 
     will be enrolled in private health plans by 2010, an increase 
     from their current 11 percent enrollment. The relevant 
     provisions included in the conference report are similar to 
     H.R. 1. Medicare payments to private health plans are 
     expected to increase by $150 billion to a total of $181 
     billion.
       Profits. Under the average profit assumption, Medicare 
     profits of the industry will increase by 490 percent to $5.3 
     billion in 2010. Under the higher profit assumption, Medicare 
     profits of the industry will increase by 2316 percent to 
     $21.7 billion. Industry analysts estimate even higher 
     potential additional profits of $25 billion.
       Cost to Government. The Medicare Actuary has not provided 
     an estimate of the impact of H.R. 1 on this cost. However, in 
     a letter to Congressman Thomas, Chairman of the House Ways 
     and Means Committee, dated June 4, 2003, the Actuary states 
     that these provisions of the bill `` would increase Medicare 
     costs significantly.''
       Premium Support. The Medicare Actuary has not provided an 
     estimate of the proportion of Medicare beneficiaries who 
     would enroll in private insurance plans under the premium 
     support program. Since the Actuary has estimated that premium 
     support would raise average Medicare premiums by as much as 
     25 percent however, it is reasonable to assume that a larger 
     proportion of beneficiaries would leave Medicare and join 
     HMOs or other private insurance plans under a full-blown 
     premium support program, further increasing industry revenues 
     and profits.

  Mr. KENNEDY. Mr. President, there you have it. This legislation is by 
the insurance industry, for the insurance industry, and of the 
insurance industry. It is about privatizing Medicare so that HMOs can 
improve their bottom line and raise their stock prices. Senior citizens 
should not be forced to give up the doctors they trust to get the 
medical care they need. The only rationale for this misguided policy is 
an ideology that says higher profits for powerful special interests is 
the highest public good.
  No wonder President Bush and the Republic leadership is fighting so 
hard for this bill. No wonder they are insisting on radical changes to 
Medicare that have nothing to do with prescription drug coverage for 
senior citizens. And no wonder senior citizens all over this country--
and the organizations that represent them--are outraged and urging 
members of Congress to vote no.
  The two most beloved and effective programs our government has ever 
created are Medicare and Social Security. Every American should 
understand that this debate is the dress rehearsal for the coming 
assault on Social Security. If the Republicans are successful with the 
legislation we are considering, they will have turned over Medicare to 
the insurance industry, so that their powerful friends can reap huge 
profits at the expense of senior citizens. But that is just the 
beginning. Once the HMOs and health insurance companies get their cut, 
it will be time for the stock brokers and the bankers.

[[Page S15770]]

  A story in the Washington Post yesterday exposed the Republican plan. 
It said:

       President Bush's aides are reviving his long-shelved plan 
     to let workers divert some Social Security taxes into stocks 
     as a reelection issue, gambling that market drops have not 
     soured voters on the politically risky idea.

  It goes on:

       A Republican official said the White House has signaled 
     Capital Hill that Bush's campaign ``wants to spend a lot of 
     money'' on advertising promoting the issue. A presidential 
     advisor says that Bush is intent on being able to say that 
     reworking Social Security is ``part of my mandate.''
       Aides said Karl Rove, Bush's senior advisor, has argued 
     internally and to the President's key supporters that recent 
     polling and election results show that changing Social 
     Security is no longer the ``third rail of American 
     politics.''

  The article concludes:

       Republican leadership aides on capital hill said [the 
     Social Security issue] is more likely to be a winner if 
     Congress passes the G.O.P. plan to add a prescription drug 
     benefit to Medicare.

  There it is, in the Republicans own words. Hold on to your hat. 
Today, Medicare, Tomorrow, Social Security.
  It is no wonder that the Republican leadership wants to rush this 
bill through. It is no wonder that the House leadership violated its 
pledge to allow the members three days to review it. This bill can't 
stand the light of day. Every hour that passes, we find more outrageous 
provisions tucked away in this 600 plus page bill.
  Let me review for the members some of the things that have been 
uncovered in just the last twenty-four hours.
  The legislation the Senate approved earlier this year included an 
effective guarantee that seniors who wanted to remain in traditional 
Medicare would have a choice of at least two prescription drug only 
plans. If this simple two-plan test was not met for any reason, the 
Federal government would provide a fallback plan. This assured that 
seniors who wanted to stay in Medicare would have a choice of plans to 
provide their drug benefit--or the Federal Government would provide the 
benefit directly, as it does other Medicare benefits.
  The supporters of the conference report claim that they have 
guaranteed that every senior could stay in Medicare and get their 
prescription drugs from the government if the private sector doesn't 
provide a choice of two plans. What they don't say is that their two-
plan requirement would be fulfilled if there is only one drug only plan 
and one PPO in an area.
  That means that seniors have to take what one-drug only plan offers--
no matter how high-priced, no matter how inadequate the formulary, no 
matter how poor the service--or be forced to leave Medicare. It looks 
like President Bush's plan to deny senior citizens drug coverage unless 
they give up their Medicare and their right to choose a doctor hasn't 
been scrapped; it has just been repackaged.
  The supporters of this conference report tout the limited $600 
benefit that some very low income senior citizens will get next year 
along with their prescription drug card. But what they don't say is 
that the price of getting this benefit is your loss of personal 
privacy. Major corporations will have unfettered access to your tax 
records--without so much as a ``by your leave?'' All those of you who 
think that's a good idea will love this bill--but anyone who thinks 
that drug companies and insurance companies have no business prying 
into your financial records had better call your Senator to tell them 
to reject this legislation.
  To comply with the bill's requirement that these drug benefits are 
tied to a person's income, the bill allows HHS to disclose a senior's 
tax records to any ``offices, employees, or contractors'' of the 
Department of Health and Human Services. That's practically anyone--
including the huge corporations that run the drug card programs. In the 
words of the bill, just applying for the card ``shall be deemed 
consent'' for this monstrous invasion of privacy.
  Another dirty little secret tucked away in this drug bill is the 
freedom it gives the insurance companies offering the drug benefit to 
construct their formularies so that senior citizens can be sure that 
there will be a drug to meet their needs on the formularies. The 
conference report says that there must at least two drugs on the 
formulary in each therapeutic class. The Senate bill says the 
therapeutic classes must be approved by the Secretary. The conference 
report says the plan gets to decide. The plan could decide to make a 
category as broad as pain-killers and leave the senior citizen with a 
choice of aspirin or Tylenol--and no access to the more sophisticated 
drugs that so many must use.
  Whether the issue is choice of drug plans, or privacy of tax records, 
or availability of drugs the senior needs, or the size of the PPO slush 
fund, this bill is not what has been advertised. No wonder Republicans 
want to get the legislation off the Senate floor and onto the 
President's desk before all the rocks are turned over.
  One of the most troubling aspects of this legislation is that a 
program that is supposed to improve the lives of senior citizens will 
make almost one-quarter of them worse off the day it is implemented.
  Six million senior citizens and disabled people on Medicaid--the 
poorest of the poor--will be victimized. Their out-of-pocket payment 
for drugs will be raised, and they may not even have coverage for the 
drugs they need the most.
  The people we are talking about are truly the poorest of the poor. In 
most cases, their incomes are well below poverty. And the impact of 
even small co-payments is devastating. Study after study finds that 
when the poor have to pay more for drugs, they end up hospitalized, in 
nursing homes, or dead.
  You couldn't make up some of the provisions that are actually in this 
bill. It sounds like something out of Charles Dickens to say that the 
law might force a widow to give up her jewelry or sign away the burial 
fund she has scraped together to get the prescription medication she 
needs. People wouldn't believe you if you told them the that Congress 
is considering a law to force some of America's senior citizens to make 
those kind of choices.
  I think everyone would acknowledge that the drug benefit contained in 
this legislation is inadequate to meet the needs of senior citizens. It 
has a high deductible and a coverage gap of thousands of dollars. 
Overall, we are providing only $400 billion toward the $1.8 trillion in 
drug costs our senior citizens and disabled will incur in the next 10 
years.
  Given the limitations on the new Medicare benefit, the last thing we 
should be doing is causing people with good, solid retirement health 
coverage to lose it. But that is exactly what this bill does, because 
it provides a discriminatory benefit. People who have retirement 
coverage get a lesser Medicare benefit than every other beneficiary. 
The result: employers will drop the coverage they now provide. The CBO 
and a new study just released by Professor Ken Thorpe of Emory 
University show that 2.7 million people--one retiree in four--will lose 
the good coverage they have today.
  So between the 7 million poor people on Medicaid who will be worse 
off and the 3 million retirees who will lose their coverage--almost 
one-quarter of all Medicare beneficiaries will be worse off the day 
this bill is implemented than they are today. If this legislation 
passes, Americans will ask: What were they thinking of? Why would any 
Senator vote to make 9 million senior citizens and disabled people 
worse off and undermine Medicare to boot.
  And finally, this program undermines the health insurance of all 
Americans.
  It puts in place an unrestricted program of health savings accounts, 
what used to be called medical savings accounts. They provide billions 
of new tax breaks for the healthy and wealthy.
  This program encourages the healthy and wealthy to take high 
deductible policies--policies that require you to pay thousands of 
dollars before you get benefits. That is fine for people who can afford 
to put money into a tax-free savings account, but it is not good for 
ordinary working Americans and people who are sick.
  The Urban Institute and the American Academy of Actuaries have 
estimated that because the healthiest people are pulled out of the risk 
pool for regular, comprehensive policies by these health savings 
accounts, premiums for regular, comprehensive coverage will skyrocket. 
If this program becomes law and you want to keep your insurance policy, 
your premiums will increase 60 percent according to

[[Page S15771]]

the Urban Institute and 61 percent according to the American Academy of 
Actuaries.
  Isn't that astounding? The Senate started out with a bipartisan 
program to add prescription drug coverage to Medicare, and now we are 
asked to vote on a conference report that not only undermines Medicare 
but could raise health insurance premiums through the roof for younger 
Americans.
  Senior citizens do not want this bill. The disabled do not want this 
bill. This bill is not a drug program for senior citizens. It is an 
attack on Medicare--and the Senate has the duty to reject it.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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