[Congressional Record Volume 150, Number 55 (Tuesday, April 27, 2004)]
[Senate]
[Pages S4387-S4390]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   MEDICARE PRESCRIPTION DRUG PROGRAM

  Mr. GRASSLEY. Now I would like to address the issue of the Medicare 
prescription drug program, because on January 1, the seniors of America 
are going to make a voluntary decision

[[Page S4388]]

whether they want to take advantage of this new program, and January 1 
would be the opportunity to take advantage of the interim program for 
the years 2004 and 2005, before the permanent insurance program on 
prescription drugs kicks in November 15, 2005.
  It was just under 5 months ago that the President signed this 
Medicare Prescription Drug Improvement and Modernization Act. It was 
the first strengthening of Medicare in its 30-year history. Next 
Monday, then, beneficiaries can begin enrolling in the Medicare-
approved drug discount card, the first stage of what I call the 
temporary program of the new comprehensive Medicare Modernization Act. 
The cards go into effect June 1 and will offer seniors much needed 
discounts and information on brand name and generic prescription drugs.
  Medicare beneficiaries who choose to enroll in the voluntary discount 
card will have choices. I emphasize, this is not something the seniors 
of America have to do. This is a voluntary program. Not only is it 
voluntary whether you join the program, but the seniors will have 
choices within their voluntary decision to join, because there are 38 
sponsors offering cards to Medicare beneficiaries nationwide, with some 
sponsors offering more than one card. More than 40 Medicare advantage 
plans--the Medicare+Choice, or let's say the Medicare HMOs, as some 
people know it--offer Medicare beneficiaries additional coverage. They 
will offer exclusive cards to their members.
  There also will be regional cards offered to certain beneficiaries, 
such as those in nursing homes throughout our country.
  Under the drug discount card, beneficiaries will save 10 percent to 
25 percent off the retail prices that they paid before they had a 
Medicare-endorsed discount card. In fact, a study recently in Health 
Affairs, a peer-reviewed journal of health policy, estimates that if 
seniors who currently lack prescription drug coverage enroll in a 
Medicare-approved drug discount program, they can expect to reduce 
their out-of-pocket drug spending by approximately 17.4 percent.
  There is still more good news. One of the most important parts of 
this drug bill is the nearly immediate help to very low income Medicare 
beneficiaries, people who do not have prescription drug coverage and 
who do not qualify for Medicaid.
  Low-income beneficiaries--and that would be generally those with 
incomes under 135 percent of poverty--are helped in two ways. They get 
a discounted price and they get up to $600 annually in 2004 and 2005 to 
help buy drugs they need at the pharmacy. The beneficiaries would get 
access to the $600 in assistance through the Medicare-endorsed discount 
card. The card will be just like a debit card. When the card is 
presented to your pharmacy, the beneficiaries are able to draw down 
from the $600 and purchase their prescription drugs. They can continue 
to use that until it has run out, between now and December 31.
  If they have some money left over on that card on December 31, 2004, 
that can carry over until year 2005, and they can get an additional 
$600 in the year 2005. If they didn't have that full $1,200 used by 
December 1, 2005, it can carry over until 2006, until it is all used 
and they take full advantage of the insurance program that is going 
into effect at that particular time.

  Also, let me make it very clear that if there are two in the family 
who would qualify for the $600, then that family would get $1,200 in 
2004, and an additional $1,200 in 2005, until it is used then, either 
in 2005 or carried over to 2006.
  I should probably use a lot of examples but I just want to use one 
example of a woman enrolled in Medicare in Waterloo, IA, near my farm. 
If she had an income of $12,000 a year and she needed to fill a 
prescription for Celebrex, the retail price for 30 tablets would be 
$86.28. This woman from Waterloo, IA, would save nearly $22 a month off 
the retail price and be able to draw down some of her $600 in 
assistance to pay for the discounted prescription that lady needs. The 
$600 credit in conjunction with the discount card will give these most 
vulnerable low-income citizens immediate help in purchasing 
prescription drugs that they otherwise, maybe, would not be able to 
afford or maybe would have to make a very difficult choice between 
buying food or buying prescription drugs. We hope this eases that 
choice which some seniors and disabled people in America must make 
today.
  We expect more than 7 million beneficiaries to enroll in this 
program. Nearly 5 million low-income beneficiaries are expected to 
apply for this $600 of assistance--$600 in 2004 and $600 in 2005; 
husband and wife qualifying, that will be $1,200 in 2004 and $1,200 in 
2005.
  What we need to do now is to continue to let people know about the 
availability of the card and to help them get information to make 
enrollment decisions to sign up for the $600 in additional assistance.
  I commend the Center for Medicare Services' staff for their work in 
this area. They are doing much to help people understand this 
situation.
  If I were going to summarize before I go into it, I could say, as I 
did in my 36 town meetings in Iowa that I have held since January to 
acquaint Iowans with this new prescription drug program, that I 
provided four sources of information. One would be if they want to 
contact any congressional office, including mine, I think they would 
find that as a source of information. No. 2 would be the 1-800 Medicare 
toll-free number to which I will soon refer. Also, I had the benefit of 
having personnel from the federally financed but State-insurance-
department-administered program called SHIIP, the Senior Health 
Insurance Information Program. That program in my State of Iowa, and I 
assume in most States, will give people one-on-one consultation about 
how to compare the benefits of the prescription drug program with what 
their health care needs are and what their income happens to be. Those 
are all private matters that our constituents are not going to want to 
make public. So they have the benefit of the SHIIP employees and 
volunteers working with them to help them work through which program 
might be best for them.
  Then, of course, we have the AARP, which is an organization, I tell 
Iowa constituents, that deserves great benefit for bringing about the 
bipartisanship in the Senate that it took to get this legislation 
passed and signed by the President.
  Without the AARP we would not have a prescription drug program for 
seniors. The AARP has attended a lot of my meetings. I have not heard 
one criticism of the AARP at any of my 36 town meetings. The AARP 
representative has been present to tell how that organization can help 
people get information about this new prescription drug program. The 
AARP probably has the best layperson's explanation of this legislation 
that is available. I hand those out at my town meetings as well.
  I commend the Center for Medicare Services for their help in this 
area. I would like to say what their help has been beyond what I have 
just said.
  They helped develop an Internet-based tool that will help seniors 
learn more about the available discount card options. By using this 
tool, which will be up and running yet this week, beneficiaries will be 
able to compare the particular drugs and prices offered by senior 
sponsors. The Internet site can even tell them whether their 
neighborhood pharmacy participates in a particular card. But we know 
that not all beneficiaries feel comfortable using the Internet. Those 
who don't can call 1-800-Medicare and ask for information about the 
card being sent to them.
  The Center for Medicare Services also has taken important steps to 
streamline the enrollment process by having the standard enrollment 
form and allowing States under certain circumstances to enroll low-
income Medicare beneficiaries into this card program. This will make it 
easier for low-income beneficiaries in States with pharmacy assistance 
programs to get the additional $600.
  The card sponsors will also be closely monitored by CMS to ensure 
that they are playing by the rules and not cheating anybody. CMS will 
track any changes made in the drug prices and complaints received by 
their 1-800-Medicare number or other sources. They will also ``mystery 
shop'' to make sure the sponsors are not falsely advertising. They will 
be on the lookout out for scam artists who claim to be offering an 
approved card. While I am confident that most card sponsors will do the 
right thing, I am very pleased that

[[Page S4389]]

CMS will be dedicating resources to protect beneficiaries and in turn 
the Medicare trust fund as well.
  I want to respond to some accusations that were made yesterday by 
Senators from the other side of the aisle about this bill. It is a 
carping we often hear that is very inaccurate, and I want to make sure 
that constituents know what the true story is.
  I want to clarify once again important details and answer concerns--
particularly inaccurate concerns--that were offered on the other side 
of the aisle.
  Some have argued that our seniors would receive a greater benefit 
under this Part D drug benefit which I have been speaking about, set to 
begin in 2006, if the Government would step in on negotiations between 
drug manufacturers and prescription drug plans. This is not accurate. 
This noninterference provision allows seniors to get a good deal 
through market competition rather than through price fixing by the 
Federal Government.
  A basic concern we have is that in writing the legislation the way we 
did, we don't want some government bureaucrat in the medicine cabinets 
of our seniors. We don't want that bureaucrat coming between our doctor 
and our patient. That is why that provision is in this bill. The 
provision protects patients by keeping government out of decisions 
about which medicines they will be able to receive. Under this section, 
the Government will not be able to dictate which drug should or should 
not be included in the prescription drug plan.

  The new Medicare Part D drug benefit allows seniors to use their 
group buying power to drive down drug prices. We rely on market 
competition--not price fixing by the Government--to deliver the drug 
benefit.
  The reason we know this works is because it has worked for 40 years 
in the Federal Employee Health Benefit Plan. There is no bureaucrat 
telling some Federal employee what their plan can provide to them in 
the way of drugs.
  The law's entire approach is to get seniors the best deal through 
vigorous market competition and not through price controls.
  These private plans have strong incentives under this legislation to 
negotiate the best possible deals on drug prices. These plans are at 
risk for a large part of the cost of the benefit. They also have the 
market clout to obtain large discounts. By driving hard bargains, they 
will be able to offer lower Part D premiums and attract more enrollees.
  The alternative is a command-and-control system that would not be 
responsive to consumer desires or to marketplace reality. Bureaucrats 
would swing between adding benefit requirements without a means of 
paying for them and then restricting choices and access in an effort to 
contain costs. The noninterference provision is a fundamental 
protection against such inexplicable government bureaucratic action.
  We are also hearing complaints from the other side of the aisle even 
after three or four times last month straightening them out about what 
the true cost of this drug program is. What is the true cost? You look 
ahead 10 years to what a program is going to cost, and you make the 
best judgment you can of what it is going to cost. There are good 
people in the Congressional Budget Office who are good at that and who 
try to do the best thing, but you aren't going to know until 10 years 
have passed what the true cost is.
  It seems to me to be intellectually dishonest for people telling us 
that somebody downtown can tell us what the true cost of this 
legislation is. I am going to respond to those accusations about what 
the true cost of the Medicare bill is for a third time. I am going to 
do it for a fourth time and a fifth time if I have to until somebody on 
the other side of the aisle learns something about what this bill does 
or doesn't do.
  They are trying to say that somehow the true cost was hidden from 
Congress. This is simply election year hyperbole. The opponents of the 
drug benefit are making this claim because the final cost estimate from 
the Center for Medicare Service's Office of the Actuary was not 
completed before the vote took place. But let us be clear: The cost 
estimate was not withheld from Congress because there was not a final 
cost estimate from the Center for Medicare Services to withhold. But 
they don't even know what this so-called cost is because they have to 
look ahead 10 years and make the best educated estimate they can 10 
years ahead of time just like the Congressional Budget Office does. But 
their estimate wasn't even completed until December 23. The President 
signed the bill December 10.
  Let me also make clear that the Congress had an official cost 
estimate on the Medicare bill before the vote, and that is the one from 
the Congressional Budget Office. I keep telling people who don't 
understand the importance of the Congressional Budget Office, which 
guides every Member of U.S. Senate, that when they say something costs 
something, even if they are wrong, that is what it costs. You don't 
dispute it. The ability to raise a point of order against the bill if 
you exceed that cost takes 60 votes. That is how important the 
Congressional Budget Office is. That is the only office we go by.
  Somebody can make a complaint that maybe some administrator downtown 
was muzzled into not talking to Congress, but they were talking to me. 
I don't know why other Members of Congress couldn't have had the same 
information I had, and it wasn't much information at that. But you can 
talk. If somebody was muzzled in our Government where transparency and 
openness ought to be the rule, that is wrong, I agree, but these 
accusations about whether the information was withheld have raised 
questions of whether Congress had access to a valid and thorough cost 
estimate for the prescription drug bill before the final vote in 
November.
  It should also be made clear while the cost analysis by the Office of 
the Actuary is perhaps helpful, it is not the one Congress relies on. 
Congress relies exclusively upon cost projections by the Congressional 
Budget Office. It is CBO's cost estimate we use to determine whether 
legislation is within authorized budget limits.
  For Congress, if there is a true cost estimate, that is CBO's. And 
true costs can, at best, be said as a 10-year guesstimate, an educated 
guess into the future, and it would be the Congressional Budget 
Office's. CBO's cost estimate is the only one that matters.
  When Congress approved a $400 billion reserve fund to create a 
Medicare prescription drug benefit, this meant $400 billion according 
to the Congressional Budget Office, not according to the Center for 
Medicare Services, as the other side would somehow say, that would have 
a definitive impact upon Congress.
  You do not raise a point of order in this body against an estimate by 
the Center for Medicare Services or even the Office of Management and 
Budget that speaks for the entire executive branch of Government.
  With all due respect to the dedicated staff who work at the Center 
for Medicare Services, Office of the Actuary, their cost estimates were 
irrelevant to our decision making process.
  The Congressional Budget Office worked closely with the conferees--
and I was one of those conferees--to the prescription drug bill and the 
staff of our Finance and Ways and Means Committees to ensure a full 
analysis of the projected costs was completed. The conferees and the 
staff regularly and constantly consulted with the Congressional Budget 
Office throughout the development of the Senate bill and in the 
preparation of the conference agreement.
  The Congressional Budget Office worked nearly around the clock and on 
weekends for months to complete an extremely thorough and rigorous cost 
analysis of the prescription drug bill. That cost estimate--our 
official cost estimate, straight from the god of Congress's finance 
estimating, the Congressional Budget Office--was available to every 
Member of Congress before the measure was presented to the House and 
Senate for a vote.
  It is also pretty disingenuous for opponents of the Medicare bill, 
especially on the other side of the aisle, to suggest the pricetag for 
the Medicare bill causes concern because the fact is they supported 
proposals that cost hundreds of billions of dollars more. You would 
think they would say: Thank God for the Center for Medicare Services 
that this bill is going to cost $134 billion

[[Page S4390]]

more than what the Congressional Budget Office said it was going to 
cost because we like to spend money. We want to spend more on Medicare 
prescription drugs.
  The House Democratic proposal, for instance, last year would have 
cost $1 trillion compared to the $395 billion the President signed. The 
Senate Democratic proposal in 2002 cost $200 billion more than the bill 
that was enacted into law.
  Further, there were more than 50 amendments offered on the floor of 
the Senate during the debate on the Senate bill that would have 
increased the cost of the bill by tens of billions of dollars.
  The bottom line is, there should be no doubt in anyone's mind we had 
as true a cost estimate--or if they want to put it in their words, the 
true cost estimate--for the prescription drug bill last year. Everyone 
had access to it before the vote.

  But let me explain to the people of this country that whether it is 
the Congressional Budget Office or the Center for Medicare Services, 
when they look ahead 10 years, and the farther out you go, it is a 
fairly imprecise way of deciding what a bill we passed last year is 
actually going to cost. The true cost is going to be known on that 10th 
year.
  But these professional people with green eyeshades, without any 
political predilection, study what we put on paper and they say: 
Senator Grassley, as chairman of the Finance Committee, if you do this, 
it is going to cost X number of dollars. So if it does not all fit into 
$400 billion, you kind of tailor it to fit, because if you do not, you 
are going to be subject to a point of order and you will have to have 
60 votes to override it.
  I hope I have once again cleared up any misunderstandings about these 
issues. We should move on and not lose sight of what really matters: 
helping our Nation's seniors get the drugs they need at lower prices 
through the Medicare discount card, and $600 of additional assistance, 
which beneficiaries can begin enrolling in next week, and through the 
voluntary Part D drug benefit in 2006, which is what really matters.
  I yield the floor.

                          ____________________