[Congressional Record Volume 152, Number 48 (Thursday, April 27, 2006)]
[Senate]
[Pages S3710-S3711]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS (for himself, Mr. Wyden, Mrs. Lincoln, Mr. Conrad, 
        and Mr. Jeffords):
  S. 2665. A bill to amend title XVIII of the Social Security Act to 
simplify and improve the Medicare prescription drug program; to the 
Committee on Finance.
  Mr. BAUCUS. Mr. President, today I am introducing the Medicare 
Prescription Drug Simplification Act of 2006. This bill would improve 
the Medicare drug benefit by creating simple, understandable benefit 
packages. It would

[[Page S3711]]

provide extra funds for State counselors who educate Medicare 
beneficiaries about the drug benefit. And it would strengthen consumer 
protections for beneficiaries who enroll.
  Medicare drug benefits are critical to the health of our Nation's 
elderly and disabled. In 2003, after years of debate, Congress added 
drug coverage to Medicare through passage of the Medicare Modernization 
Act, the MMA. I was proud to help pass that bill. The law was not 
perfect. But, as I said then, we should not let perfection be the enemy 
of the good. The MMA can go a long way toward helping those who need it 
most.
  But implementation of the law has been flawed. The Centers for 
Medicare and Medicaid Services, or CMS, was put in charge of ensuring 
that the prescription drug benefit was fully operational by January 1, 
2006. The task was big. And CMS worked hard to get it done. 
Unfortunately, CMS's efforts have come up short in a few major areas.
  First, CMS made the new program needlessly confusing. The law charged 
CMS with approving prescription drug plans. Last April, I urged CMS to 
approve only the plans meeting the highest standards, so that seniors 
could choose among a manageable number of solid offerings. But CMS 
ignored that advice.
  Instead, CMS approved 47 plans in my State alone, and more than 1,500 
nationwide. Furthermore, the differences between the plans are mind-
boggling and difficult to sort out, even for the most-savvy consumer. 
Beneficiaries deserve better. They must be able to make apples-to-
apples comparisons in order to choose what is best for them.
  There are other problems in the way that CMS chose to implement the 
new program. Consumer protections are weak and inconsistent. The list 
of drugs covered by plans should not change in the middle of the year. 
Plan formularies should be transparent. And patients should be able to 
request exceptions to them using the same process and forms, no matter 
which plans the patients enrolled in.
  Also, CMS terribly underfunded State Health Insurance Programs, known 
as SHIPs. These agencies are mainly staffed by volunteers who help 
educate and advise people about Medicare and the new drug benefit. They 
have held thousands of community events and assisted millions of people 
across the country. But they struggled to meet demand for help with the 
new drug program. Last week, Montana AARP donated $40,000 of its own 
funds to help the Montana SHIP keep enough staff and volunteers through 
the May 15 deadline. CMS provided only $7,500 for a five-county region 
in Montana with an area bigger than Delaware. In contrast, CMS spent 
$300 million for an ad campaign, a bus tour, and a blimp.
  Yet despite these ads, many seniors are still confused about the drug 
benefit. When I asked Montanans how they feel about the new program, 
they tell me that it is too complex and confusing.
  Recent focus groups conducted by MedPAC, the group that advises 
Congress on Medicare policy, found the same the problem. According to 
MedPAC, beneficiaries are ``confused by the number of plans, variation 
in benefit structure.''
  And a study released by the Kaiser Family Foundation says: ``the 
absence of any standardization for many features of drug plan benefit 
design, and even some of the basic terminology used to describe these 
plans, adds to the challenges for beneficiaries'' and ``is likely to 
make apples-to-apples comparisons across plans more difficult for 
consumers.'' The report ``confirm[ed] the importance of federal 
safeguards . . . to minimize unnecessary complexity in [the] Medicare 
prescription drug plan marketplace.''
  The message is coming through loud and clear from constituents, 
researchers, advocacy groups, and government advisers. We need to make 
the Medicare drug benefit more understandable, straightforward, and 
transparent. And that's what this bill would do.
  First, the bill would make choices among prescription drug plans more 
simple and straightforward. It would require the Federal Department of 
Health and Human Services to define six types of drug benefit packages 
that insurers could offer. In addition, Medicare and insurers would 
both have to use uniform language, names, and terminology to describe 
drug benefit packages. Seniors can reach informed decisions, but they 
deserve clear options.
  This approach is similar to the one Congress took with the Medicare 
supplemental market. In 1980, Congress enacted the Baucus amendments to 
fix marketing abuses and consumer confusion with supplemental or 
Medigap plans.
  Those reforms required private issuers to meet minimum standards and 
have minimum loss ratios. Ten years later, Congress again took up 
Medigap reform, passing legislation that led to the standardization of 
Medigap policies. This resulted in a limited number of Medigap options, 
each with a fixed set of benefits. These changes were successful in 
helping consumers to make comparisons and in strengthening consumer 
protections.
  My colleague and co-sponsor, Senator Ron Wyden, was instrumental in 
bringing about these reforms. And I thank him for his involvement then 
and today.
  The bill that we are introducing today would build on these lessons 
and apply them to the Medicare drug benefit. By establishing six 
standardized types of benefit packages that insurers can offer, the 
bill would help people to make apples-to-apples comparisons. It would 
make choices more understandable. It would reduce confusion and help 
beneficiaries make the decisions that are best for each individual. And 
it would do this while preserving the ability of insurers to compete in 
the marketplace.
  Second, the bill would provide extra funds to State Health Insurance 
Programs through 2010. Putting information on the Internet, television, 
and a toll-free hotline is not enough.
  Third, the bill would stop drug plans from removing medications or 
increasing drug costs during the benefit year.
  Fourth, the bill would prohibit insurance agents from engaging in 
unfair marketing practices that prey on vulnerable people--practices 
like cold-calling seniors.
  I believe strongly that Medicare beneficiaries need prescription drug 
coverage. And, if CMS implements it correctly, the market-based 
approach envisioned in the MMA can deliver those benefits effectively. 
But a market can work only if the product is well defined and consumers 
have sufficient knowledge of it. As Adam Smith said: ``[Value] is 
adjusted . . . not by any accurate measure, but by the haggling and 
bargaining of the market.'' It's not fair to expect seniors and people 
with disabilities to haggle and bargain if the choices are 
incomprehensible.
  Some may say that lots of choice is good. This is true when people 
buy cars or toasters. But, as many economists have shown, the health 
care market is different. People want to choose their providers and 
pharmacies. But they do not necessarily want to wade through a 
confusing array of plans.
  Some may say that we should hold off making changes until the market 
consolidates. But that is both unfair and unrealistic. With more than 
1,500 plans in the market now, how much consolidation could really fix 
the problem of confusion and complexity? Furthermore, the next 
enrollment period is fast approaching, and consumers are insisting on 
relief now.
  Some may say that enrollment is high, so why tinker with the benefit? 
But look at the numbers. In 2003, CMS said that they expected 19 
million Americans to sign up for the drug program. But so far, only 8 
million have voluntarily enrolled. In Montana, only 42 percent of 
people who have a choice about whether to sign up have done so. We can 
do better than that. And with passage of the Medicare Prescription Drug 
Simplification Act, we will.
  The MMA tried to balance the needs of private plans and 
beneficiaries. But implementation has tilted that balance toward the 
private firms, rather than seniors and the disabled. The Medicare 
Prescription Drug Simplification Act of 2006 would restore the proper 
balance needed to make the drug program work fairly for people with 
Medicare.
                                 ______