[Congressional Record Volume 150, Number 109 (Tuesday, September 14, 2004)]
[Senate]
[Pages S9158-S9159]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      ESCALATING COSTS OF MEDICARE

  Mr. DASCHLE. Mr. President, I ask unanimous consent that a USA Today 
story entitled ``Medical costs eat at Social Security'' be printed in 
the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                    [From USA Today, Sept. 14, 2004]

                  Medical Costs Eat at Social Security

                         (By William M. Welch)

       Washington.--With a new Medicare drug benefit set to begin 
     in 2006, Americans 65 and older can expect to spend a large 
     and growing share of their Social Security checks on Medicare 
     premiums and expenses, previously undisclosed federal data 
     show.
       Information the Bush administration excluded from its 2004 
     report on the Medicare program shows that a typical 65-year-
     old can expect to spend 37% of his or her Social Security 
     income on Medicare premiums, copayments and out-of-pocket 
     expenses in 2006. That share is projected to grow to almost 
     40% in 2011 and nearly 50% by 2021.
       Unless Congress does something to hold down costs 
     confronting seniors, the official projections suggest that 
     health spending will consume virtually the entire amount of 
     Social Security benefits when children born today reach 
     retirement age.
       The table was provided by the Department of Health and 
     Human Services at the request of Rep. Pete Stark, D-Calif. 
     Stark, who opposed the drug benefit enacted last year at 
     President Bush's urging, sought the data after noticing that 
     a chart included in previous annual reports was not in the 
     2004 version.
       Stark charged that the administration threw out the chart 
     because it shows future Medicare costs under the new law will 
     erode Social Security checks.
       ``It doesn't look good to lie to grandma, so the Bush 
     administration has withheld information and come up with 
     other creative ways to mask the damage they have done to 
     Medicare,'' Stark said.
       Richard Foster, Medicare's chief actuary, said the 
     program's trustees--administration officials and appointees--
     replaced the chart with a graph that lacks specific numbers 
     in an effort to show that the increased costs come with a new 
     benefit.
       ``The table makes it look like beneficiaries are worse off 
     than ever, and that's not the case,'' Foster said.
       Bill Pierce, a spokesman for Health and Human Services 
     Secretary Tommy Thompson, said the administration wasn't 
     trying to hide anything. ``We have a new program, and it's 
     got to be reflected with new information,'' he said.
       The drug benefit is voluntary. It requires a premium, 
     estimated at $420 a year initially, and substantial 
     copayments. The administration estimates participants will 
     save about 50% on their drug bills.
       Critics of the law say the new figures show it does little 
     to restrain drug costs. The law prohibits the government from 
     negotiating lower drug prices.
       The data ``ironically are the clearest proof of the new 
     Medicare law's failures and the resulting squeeze on seniors' 
     pocketbooks,'' said Ron Pollack, head of Families USA, a 
     health advocacy group.
       The disclosure comes just days after the administration 
     announced Medicare premiums will rise by 17% next year due to 
     rising health costs.
       Foster is at the center of another dispute over missing 
     data. He says he withheld from Congress higher cost estimates 
     for the Medicare law last year, at the direction of a Bush 
     appointee who headed the Centers for Medicare and Medicaid 
     Services. Congress approved the law based on a 10-year, $400 
     billion estimated price tag. Foster's estimate was $540 
     billion.

  Mr. DASCHLE. Mr. President, I appreciate the opportunity to listen to 
the colloquy both Senators Dorgan and Frist have engaged in. 
Coincidentally, I had intended to come to the floor to talk about the 
new report that was released on the front page of USA Today citing the 
dramatic increase in Medicare costs and the impact these costs will 
have on seniors' Social Security benefits.
  In 2005, 19 percent of Social Security benefits are going to go to 
Medicare expenses. But according to the USA Today article:

     a typical 65 year old can expect to spend 37% of his or her 
     Social Security income on Medicare premiums, co-payments, and 
     out-of-pocket expenses in 2006. That share is projected to 
     grow to almost 40% in 2011 and nearly 50% in 2021.

  According to the article, by 2026, over half of a senior's Social 
Security benefits will be consumed by cost increases under Medicare, 
including cost increases associated with the new part D drug benefit.
  Think about that: we are on pace to see nearly half of the benefit 
seniors depend on under Social Security consumed by cost increases 
under Medicare.
  Unfortunately, I think the Senate and the country took a step 
backward when the Senate made the decision last year to pass the 
legislation it did. Part of the reason for these increases is that the 
new law will do almost nothing to bring down the cost of prescription 
drugs. Another reason is that the law and this Administration is 
overpaying HMOs.
  There are ways we can address the dramatic cost increase this chart 
represents, ways to protect seniors' Social Security and lower drug 
prices. The first is to do what Senator Dorgan has suggested, and that 
has bipartisan support: allow reimportation of drugs from Canada.
  Canada has exactly the same drug, the same corporation, the same 
everything, and yet the drugs available there are oftentimes 50 to 60 
percent cheaper than they are in this country. If a senior citizen can 
go to another country to acquire those drugs, why in heaven's name 
would we prevent them from doing so?
  I have heard the distinguished majority leader say that safety is a 
factor and that we ought to consider safety as we consider providing 
access to these drugs. Well, I would say cost is a safety issue as 
well. I have talked to countless seniors in South Dakota who are 
rationing their own medication because they cannot afford it. If, based 
on cost, our seniors are not able to take the drugs they need, no one 
can tell me that is safe. When one rations drugs, when one does not 
take them all, when one splits pills, when one makes a choice between 
nutrition and medicine, how safe is that? That is exactly what is going 
on today.
  We've already made the decisions to ensure these drugs will be safe. 
We should not have to worry about another report or another 
bureaucratic response. Our seniors are not prepared to wait any longer. 
We have debated this long enough. Reimportation ought to be the law of 
the land today. That is one way, perhaps the easiest, simplest, and 
most compelling way, to deal with the cost issue immediately.
  There is a second way to address rising costs. A second way is to do 
for seniors what we already do for veterans and for our military. What 
do we do for them? The Government negotiates with the drug companies to 
bring down prices.
  In most cases, drug prices for veterans are at least 60 percent lower 
than they are for seniors. The only reason they are that much lower is 
because the Government has the authority to negotiate these lower 
prices.
  Why in heaven's name would people object to extending this concept to 
seniors as well? On that issue, the drug companies won; we lost. There 
is a specific prohibition against Medicare negotiating lower prices for 
seniors, and I think that is an outrage. We ought to pass legislation 
to allow Medicare to negotiate lower drug prices.
  The third thing we can do is to pass legislation that has at least 
two forms today--and there may be other ideas. Senators Stabenow and 
Kennedy have offered a very good bill that would say we cannot increase 
Medicare premiums beyond the cost of living next year,

[[Page S9159]]

hold it at that. I have a bill that would do something similar. It says 
premiums for Part B and Part D of Medicare cannot exceed 25 percent of 
the cost-of-living allowance provided to Social Security beneficiaries. 
Both of these bills would help keep costs down for seniors.
  So we do not lack ways in which to address the cost issue. What we 
lack is will, a commitment, a determination to bring the issue to the 
floor.
  We all lament the dramatic increase in the cost of health care, but 
we are not going to solve it unless we are willing to take some action. 
We can go through more hearings, we can go through a lot more reports, 
but reports and hearings are not going to get the job done. This Senate 
needs to act.
  I am amazed at the degree to which the finger-pointing continues to 
go on and on, with the tired and lame excuse that it is somehow the 
Democrats' fault that we have not addressed reimportation, that we have 
not addressed any of the other pending issues. We have had specific 
commitments on mental health parity and that bill is now unlikely to be 
addressed, even though we have had very specific commitments to take up 
mental health parity in the Senate. That has not happened because there 
is a lack of commitment and energy on the other side.
  We have not been able to deal with the FSC bill, the welfare reform 
bill, the tax bill, the highway bill, in large measure because our 
Republican friends have not been able to agree among themselves. So all 
of these and other issues continue to languish. This is a do-nothing 
Congress and in large measure it is do-nothing because they have done 
nothing to bring themselves together and force these issues on to the 
Senate floor to allow us the opportunity to vote and to do the right 
thing.
  Senior citizens deserve better than that. Those who are in this 
country looking to the Senate for answers on all of these and other 
issues deserve better than that. I hope we can make the most of what 
limited time we have remaining so we can do better than that.

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