[Congressional Record Volume 149, Number 176 (Tuesday, December 9, 2003)]
[Senate]
[Pages S16127-S16128]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. KENNEDY:
  S. 1992. A bill to amend the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003 to eliminate privatization of the 
medicare program, to improve the medicare prescription drug benefit, to 
repeal health savings accounts, and for other purposes; to the 
Committee on Finance.
  Mr. KENNEDY. Mr. President, today, along with Senator Bob Graham I am 
introducing the ``Defense of Medicare and Real Prescription Drug 
Benefit Act.'' Congressman John Dingell is introducing companion 
legislation in the House of Representatives.
  The more senior citizens learn about the legislation President Bush 
has just signed, the more concerned they are. It's a sweetheart deal 
for big insurance companies and pharmaceutical companies and a raw deal 
for senior citizens. It's not really a prescription drug bill. It's an 
anti-Medicare bill.
  Our legislation will reverse these destructive policies. Our 
legislation will protect and preserve Medicare--not turn senior 
citizens over to the un-tender mercies of HMOs and insurance companies. 
It will provide prescription drug benefit for senior citizens, without 
coverage gaps or hidden loopholes. It will protect senior citizens with 
good retirement coverage from a former employer, and it will protect 
the poorest of the poor on Medicaid. It will reduce prescription drug 
costs, by allowing safe importation of drugs from Canada and government 
negotiations with drug companies for discounts. And it will repeal the 
program of Health Savings Accounts that help the healthy, wealthy and 
insurance companies who have contributed heavily to the Republican 
Party, while harming every family that needs comprehensive, affordable 
health insurance.
  The legislation the President signed is designed to destroy Medicare 
and turn senior citizens over to the un-tender mercies of HMOs. Our 
legislation will protect Medicare.
  The legislation the President signed provides a skimpy, inadequate, 
and unreliable drug benefit. Our legislation provides comprehensive 
drug coverage and assures that senior citizens can get it everywhere in 
the country without having to join an HMO or other private plan.
  The legislation the President signed denies senior citizens the right 
to get safe drugs at lower prices from Canada and prohibits the 
government from negotiating with drug companies to get a good deal for 
senior citizens. This legislation eliminates those special interest, 
anti-senior provisions.
  The legislation the President signed allows unfettered Heath Savings 
Accounts. These accounts are a bonanza for the healthy, the wealthy, 
and for favored insurance companies, but they are a disaster for 
ordinary citizens who need comprehensive coverage and can't afford to 
put thousands of dollars aside to meet medical needs that insurance is 
supposed to cover. This legislation repeals this unwise policy.
  Senior citizens want prescription drug coverage under Medicare, and 
they deserve it. Instead, the President and the Republican Party used 
their control of Congress to attack Medicare itself and force senior 
citizens into HMOs and other private insurance plans. They want to 
privatize Medicare, and if they get away with it, they'll try to 
privatize Social Security too.
  Their legislation raises Medicare payments to HMOs so that Medicare 
can't compete. They use the elderly's own Medicare money to undermine 
the Medicare program they depend on. According to estimates of the 
Medicare Actuary, Medicare already pays 16 percent too much for every 
senior citizen

[[Page S16128]]

who joins an HMO or other private insurance plan, because these 
programs attract the healthiest elderly. IN addition, the Republican 
legislation raises the base payment to 109 percent of what it costs 
Medicare to care for an average senior citizen, without even taking 
into account the health selection bonus the HMOs receive. The total 
overpayment is 25 percent--a whopping $2,000 per senior citizen. And to 
top it all off, the legislation establishes a $12 billion slush fund 
for the new PPO program established by the bill. This isn't 
competition, its corporate welfare--and senior citizens and the 
Medicare program are the losers.
  Their legislation also creates a vast social experiment--called the 
``premium support'' program--using millions of senior citizens as 
guinea pigs. The sole purpose of the experiment is to raise Medicare 
premiums so that senior citizens have to give up their Medicare and 
join an HMO.
  Our legislation eliminates these indefensible overpayments and 
restores parity to the competition between conventional Medicare and 
private sector alternatives. It repeals the premium support program, so 
that senior citizens will have choice, not coercion, when they decide 
whether they prefer conventional Medicare or an HMO.
  The assistance with prescription drug costs their program provides is 
actually very little. Overall, it covers less than 25 percent of the 
drug expenses faced by the elderly. Senior citizens with $1,000 in drug 
expenses would pay 86 percent of the cost out of their own pockets. 
Those with $5,000 in drug expenses would pay 78 percent. When senior 
citizens' drug costs exceed $2,250, they get no benefits at all until 
their costs reach $5,100, even though they have to continue to pay 
premiums. And senior citizens won't necessarily have access to the 
drugs their doctor's prescribe, if they aren't on the formularies of 
the private insurance companies that will administer the benefit. A bus 
ticket to Canada would do more to reduce drug costs for senior citizens 
than this bill.
  Our legislation fills the gaps in the Medicare benefit, so that it 
truly meets the needs of the elderly and is comparable to the 
assistance provided under most private insurance plans and that is 
available to every member of Congress. It assures that the formularies 
offered by the insurance companies administering the program are not 
manipulated by the companies to exclude the drugs senior citizens need 
most.
  Nine million senior citizens--almost one of every four--will actually 
be worse off in their drug coverage under the Bush program than they 
are today. According to the nonpartisan Congressional Budget Office, 
almost 3 million senior citizens with good retiree drug coverage 
through a former employer will lose it as the result of this bill. Six 
million senior citizens and the disabled who have both Medicare and 
Medicaid--the poorest of the poor--will actually pay more and have 
reduced access to the drugs they need. The Bush plan establishes a 
cruel and demeaning assets test, so that millions of senior citizens 
with very low incomes are disqualified from the special assistance they 
need, simply because they have managed to save a little bit for a rainy 
day, or because they have a car that's worth too much or a burial fund, 
or personal property like jewelry or furniture.

  Our legislation addresses these problems. It ends the discriminatory 
treatment of senior citizens with private retirement coverage, so that 
employers do not have an incentive to drop this coverage. It restores 
benefits to dual eligibles--senior citizens with coverage under both 
Medicare and Medicaid--so that they will not be made worse off by the 
new program. It eliminates the assets test.
  The Republican bill does nothing about escalating drug prices. 
Republicans even had the nerve to include a specific prohibition on any 
role by the Federal government in any negotiation on drug prices. The 
Congressional Budget Office has estimated that drug prices will 
actually increase as the result of this bill. No wonder drug company 
stocks are soaring and senior citizens are concerned. Our legislation 
will allow reimportation of drugs from Canada--where drug prices are 
much lower--with stringent controls to assure that any imported drugs 
meet FDA standards. It will allow the Federal government to negotiate 
the best possible price for prescription drugs, so that senior citizens 
and the Medicare program are no longer victimized by exorbitant prices 
that have little relationship to costs or value.
  It's not just seniors who are very concerned. Younger Americans will 
be hurt too. A separate booby trap in the Republican program includes 
tax breaks for the healthy and wealthy to buy private policies with 
very high deductibles that will undermine health insurance for those 
who are not elderly. These tax breaks, called health savings accounts, 
encourage people to buy high deductible policies and put money aside in 
a tax-free savings account. Because the healthy people don't contribute 
to the cost of regular insurance, premiums skyrocket for people who 
can't afford thousands of dollars in out-of-pocket costs before their 
insurance kicks in. The Urban Institute and the American Academy of 
Actuaries have estimated that premiums for regular insurance policies 
could increase 60 percent or more. Our bill repeals this unjustified 
and destructive policy.
  The President's signing of the Republican legislation yesterday was 
the beginning of this fight, not the end. We will never rest until we 
have protected Medicare and provided senior citizens a prescription 
drug benefit that truly meets their needs.
  I ask unanimous consent that a summary of the ``Defense of Medicare 
and Real Prescription Drug Benefit Act'' be printed in the Record.
  There being no objection, the Summary was ordered to be printed in 
the Record, as follows:

   Summary: Provisions of the Defense of Medicare and Real Medicare 
                     Prescription Drug Benefit Act

                      Title 1: Defense of Medicare

  Repeals the premium support demonstration.
  Requires risk adjustment between private sector plans and Medicare. 
Medicare will pay private sector plans an amount reflecting Medicare's 
cost for covering an individual, rather than paying HMOs a large markup 
as a result of failing to adjust for the better health of senior 
citizens who join HMOs.
  Repeals PPO slush fund.
  Pays all private sector plans an amount equivalent to average 
Medicare costs, rather than paying an average of 109 percent of 
Medicare costs, as provided under the current legislation. Phased in 
over 5 years.
  Repeals Medicare spending cap.

   Title II: Establishment of Real Medicare Prescription Drug benefit

  Elminates coverage gap in 2006-2008, beneficiaries will pay 75 
percent coinsurance in the coverage gap. In 2009-2011, they will pay 50 
percent. In 2012 and subsequent years, they will pay the same 25 
percent copayment as under the initial coverage limit.
  Eliminates discriminatory treatment of employer plans.
  Allows Medicaid wrap-around for dual eligibles.
  Eliminates assets test.
  Requires two stand-alone prescription drug plans to avoid federal 
fallback.
  Secretary defines classes and categories under any formula.
  Repeals prohibition on Medigap coverage of prescription drugs. 
Modifies current Medigap policies covering drugs to wrap-around new 
benefit.
  Phases out elimination of state ``clawback.''

            Title III: Reduction in Prescription Drug Prices

  Allows reimportation from Canada with certification and inspection of 
Canadian exporters to assure safety of drugs.
  Repeals prohibition on government negotiating directly with drug 
companies for best prices and gives authority for such negotiations.

               Title VI: Repeals Health Savings Accounts

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