[Congressional Record (Bound Edition), Volume 146 (2000), Part 7]
[Extensions of Remarks]
[Page 10286]
[From the U.S. Government Publishing Office, www.gpo.gov]



         INTRODUCTION OF MEDICARE PRESCRIPTION DRUG ACT OF 2000

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                           HON. ANNA G. ESHOO

                             of california

                    in the house of representatives

                         Thursday, June 8, 2000

  Ms. ESHOO. Mr. Speaker, when Medicare was created in 1965, seniors 
were more likely to undergo surgery than to use prescription drugs. 
Today, prescription drugs are often the preferred, and sometimes the 
only method of treatment for many diseases. In fact, 77 percent of all 
seniors take a prescription drug on a regular basis.
  And yet, nearly 15 million Medicare beneficiaries don't have access 
to the lifesaving drugs you produce because Medicare doesn't cover 
them. Countless others are forced to spend an enormous portion of their 
modest monthly incomes on prescription drugs with 18 percent of seniors 
spending over $100 a month on prescriptions.
  Seniors want and need prescription drug coverage. Hence, the question 
before Congress is not whether we should provide a Medicare drug 
benefit but how to do it?
  There are some in Congress who think that the way to do this is to 
turn the problem over to the private insurance market, but the private 
insurance market is pulling out from under seniors in the Medigap and 
Medicare+Choice markets. Others believe that we should limit how much 
drug companies can charge. I disagree. I understand the investment 
required for R&D and I believe that price controls will ultimately 
limit access.
  I've devised what I believe is a common-sense approach that 
incorporates a generous, defined benefit that's easy for seniors to 
understand with provisions that reduce administrative inefficiencies 
and increase competition. The result will be a more affordable drug 
benefit for both beneficiaries and the Federal Government.
  The bill is simple. Available to all Medicare beneficiaries, the 
Federal government will pay half of an individual's drug costs up to 
$5,000 a year (when fully phased in). There are no deductibles and a 
modest premium of approximately $44 a year. For seniors who exceed 
$5,000 in drug expenditures or $2,500 in out-of-pocket costs--the 
Federal Government picks up the whole tab.
  What about drug costs? By allowing multiple PBM's to participate, my 
bill will, for the first time, introduce open competition into Medicare 
and drive down prices. We know from the private marketplace that simply 
purchasing a large quantity of drugs does not drive down prices. Drug 
companies grant discounts when a PBM can show that it will increase its 
market share. By allowing multiple PBMs, my bill increases competition, 
lowers prices and provides greater consumer choice.
  We also removed administration of the program from HCFA. The 
healthcare system has evolved rapidly, and regrettably HCFA has not 
kept pace. HCFA lacks the expertise to run a benefit that relies on 
private sector competition to control costs. Fortunately, there is 
another agency that has expertise interacting with private sector 
health plans, and has proven that it can administer benefits 
effectively and efficiently with a minimum of bureaucracy. It's the 
Office of Personnel Management (OPM) which runs the widely acclaimed 
Federal Employee Health Benefit (FEHB) program. Under OPM's leadership, 
I'm confident that an efficient and effective competitive benefit can 
be integrated successfully into the Medicare program.
  Congress must enact a Medicare drug benefit this year. For our 
Nation's seniors, prescription drugs are not a luxury. During these 
times of historic prosperity and strength, there is absolutely no 
reason that we should force seniors to make between buying prescription 
drugs or groceries. In introduction today I urge all of my colleagues 
to give careful consideration to my bill. It provides a real answer for 
seniors without price controls and without threatening innovation.

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