[Congressional Record (Bound Edition), Volume 145 (1999), Part 7]
[Extensions of Remarks]
[Pages 9772-9773]
[From the U.S. Government Publishing Office, www.gpo.gov]



   THE MEDICARE CHRONIC DISEASE PRESCRIPTION DRUG BENEFIT ACT OF 1999

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                        HON. BENJAMIN L. CARDIN

                              of maryland

                    in the house of representatives

                         Thursday, May 13, 1999

  Mr. CARDIN. Mr. Speaker, I rise today to introduce legislation that 
addresses one of the most pressing problems facing America's older and 
disabled citizens today--access to comprehensive medical care. 
Medicare, the federal health insurance program for the elderly and 
disabled, covers a large number of medical services, Inpatient care, 
physician services, skilled nursing facilities, and home health and 
hospice care are all covered by the Medicare program. Despite the 
success of this program in eliminating illness as a potential cause of 
financial ruin, the burden of high prescription drug costs remains a 
source of hardship for many beneficiaries.
  When Congress created Medicare in 1965, prescription drugs were not a 
standard feature of most private insurance policies. But health care in 
the United States has evolved considerably in the last 34 years. Now 
most private health plans cover drugs because they are an essential 
component of modern health care. They are viewed as integral in the 
treatment and prevention of diseases. But Medicare, for all its 
achievements, has not kept pace with America's health care system. It's 
time for Medicare to modernize.
  Because Medicare does not pay for prescription drugs, Medicare 
beneficiaries, 80% of whom use a prescription drug every day, must 
either rely on Medicaid if they qualify, purchase private supplemental 
coverage, join a Medicare HMO that offers drug benefits, or pay for 
them out-of-pocket.
  Medicaid does provide prescription drug coverage. But nearly 60% of 
Medicare beneficiaries with incomes below the federal poverty level 
were not enrolled in Medicaid as recently as 1997. And even Medicaid 
enrollees with drug benefits must forgo some medications. For example, 
eleven state Medicaid programs have imposed caps on the number of 
prescriptions covered each month.
  The drug coverage available through Medigap leaves much to be 
desired. Only 3 of the 10 standardized Medigap plans offer drug 
coverage, and the plans that do have limits on the benefits and high 
cost sharing. Two plans have caps of $1250, and the third has a cap of 
$3000. In addition, all three policies require that beneficiaries pay a 
50% coinsurance for prescription drugs. The high cost of Medigap 
policies puts them out of reach for most low-to-moderate income 
Medicare enrollees. In my home state of Maryland, a 70 year-old 
beneficiary buying a Medigap policy with drug benefits would have to 
pay between $1100 and $3550 per year.
  Some beneficiaries get drug benefits through employer-sponsored 
retiree plans. Although between 60 and 70% of large employers offered 
retiree health benefits in the 1980s, fewer than 40% do so today. Of 
these, nearly one-third do not provide drug benefits to their retirees.
  So that leaves Medicare HMOs. Nearly one-quarter of Medicare+Choice 
enrollees--1.5 million beneficiaries--do not have drug benefits today. 
Nine of ten plans that do offer drugs impose annual caps, some of which 
are as low as $600. In fact, some seniors in Medicare HMOs are relying 
on pharmaceutical samples from their physicians to get sufficient 
supplies of medications. Twenty-five percent of enrollees with drug 
coverage pay a monthly premium to join the HMO, and these premiums are 
certain to rise next year. Last October, four of the eight HMOs 
offering Medicare coverage in Maryland exited the program, abandoning 
34,600 seniors. In all but the metropolitan areas, only one HMO was 
left and it went from a zero premium to $75 a month.
  Finally, the benefits offered by Medicare+Choice plans are not 
permanent. Because they are not part of the basic Medicare benefit 
package, which by law must be included in Medicare+Choice plans, drug 
benefits are considered ``extra'' and as such can change from year to 
year. On July 1, just 50 days from now, HMOs will submit their 
proposals to the Health Care Financing Administration for 2000. HCFA 
estimates that 16 million seniors, or 40% of all beneficiaries, will 
lack drug coverage as of next year.
  All of these statistics make us painfully aware of the gaping hole in 
Medicare's safety net. This Congress can move now to patch it before 
more elderly and disabled citizens fall through. Today, Mr. Speaker, I 
am introducing legislation to accomplish this. My bill, the Medicare 
Chronic Disease Prescription Drug Benefit Act, recognizes the 
importance of preventive care and provides coverage for drugs that have 
been determined to show progress in treating chronic diseases. Why 
chronic diseases? Because the average drug expenditures for elderly 
persons with just one chronic disease are more than twice as high than 
for those without any chronic conditions. And because we know from 
years of advanced medical research that treating these conditions will 
reduce costly inpatient hospitalizations and expensive follow-up care. 
Furthermore, this bill

[[Page 9773]]

addresses those beneficiaries who need assistance with their 
medications: a review of the Medicare+Choice program reveals that 
seniors who join HMOs--whom HMOs market to--are younger and healthier 
than those in fee-for-service Medicare. This tells us that the older, 
sicker seniors are not getting drug benefits.
  My bill addresses their needs. It begins with five chronic diseases 
that have high prevalence among seniors and whose treatment will show 
improvement in beneficiaries' quality of life and reduce Medicare's 
overall expenditures. This bill provides coverage after an annual $250 
deductible is met, with no copayment for generics and a 20% copayment 
for brand-name drugs. The Agency for Health Care Policy and Research 
will review available data on the effectiveness of drugs in treating 
these conditions, and based on AHCPR's review, the Department of health 
and Human Services will determine the drugs to be covered. Pharmacy 
Benefit Managers (PBM) under contract on a regional basis with the 
Health Care Financing Administration will negotiate with pharmaceutical 
companies to purchase these drugs and will administer the benefit.
  This bill covers five major chronic conditions, but we know that 
there are others that should be covered as well. The legislation 
provides a process for the Institute of Medicine to determine the 
effectiveness of this benefit and the Medicare savings it produces, and 
to recommend additional diagnoses and medications that should be 
considered for coverage.
  Mr. Speaker, modern medicine has the capability of doing 
extraordinary things. But no medical breakthrough, no matter how 
remarkable, can benefit patients if they can't get access to it. This 
bill is a matter of common sense: if Medicare beneficiaries can secure 
the medications they need, they will be able to managed their 
conditions, and will be much less likely to require extended and costly 
inpatient care. This legislation is a first step, a major step, toward 
making this happen. I urge my colleagues to join me in providing a 
solid package of prescription drug benefits that will modernize 
Medicare for the 21st century for the millions of Americans who depend 
on it.

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