[Congressional Record (Bound Edition), Volume 148 (2002), Part 10]
[Senate]
[Pages 13603-13606]
[From the U.S. Government Publishing Office, www.gpo.gov]




           AMERICA'S SENIORS NEED PRESCRIPTION DRUG COVERAGE

  Mr. KYL. Mr. President, I want to talk about the delivery of 
prescription drugs to America's seniors. It is a subject that Senators 
have been talking about pretty much all week long, but people tuning in 
might wonder whether we are really making any progress toward getting a 
bill passed. That is what I would like to address this morning.
  For quite a long time now, we have appreciated the fact that when 
Medicare was created, treating people with medications was not the 
preferred or first or primary method of treatment. So much of what 
Medicare covers today is the cost of invasive surgery, and the cost of 
just about every other kind of treatment except treatment through the 
use of medication or prescription drugs. Over the last 25 years, it has 
become increasingly common for physicians first to treat with 
medications, if possible. It seems second nature to us now. When 
Medicare was first established, that was not the case. As a result, 
most prescription drugs were not covered as part of Medicare.
  Over the years, people learned how to receive supplemental drug 
coverage through Medigap insurance and other ways to pay for 
prescription drugs, but the combination of the fact that Medicare 
itself did not set out to cover those drugs and, second, that the cost 
of drugs has obviously increased over the years has made it more 
difficult for some seniors to be able to pay for their prescription 
drugs, especially since, again, this is what their physicians are 
prescribing as the best way to treat them in many cases.
  Add to that the fact that people are, fortunately, living longer 
today, but that the longer one lives, the more likely they are going to 
need to take various kinds of drugs, and we have a situation in which 
clearly it is time for Congress to respond with an inclusion of a 
Medicare drug benefit for all of America's seniors. We have been 
working on that now for quite a long time.
  I find it interesting that on the Republican side there are three or 
four very good, somewhat different, ways of approaching this because 
Members on our side have been working hard to try to fashion a set of 
benefits we can afford and which will also provide the kind of care we 
want for our senior citizens, and now we have a number of options.
  I sit on the Finance Committee. Last year, when Senator Grassley 
chaired the Finance Committee, we began working legislation through the 
Finance Committee to try to bring to the Senate floor so we could 
provide a prescription drug benefit to Medicare. Then the control of 
the Senate changed.
  Toward the end of last year, Republican members continued to meet 
and, in fact, began reaching across the aisle to meet with the 
Democratic members of the Finance Committee and also with the 
Independent Member of the Senate, Senator Jeffords, who had left the 
Republican Party and caucused with the Democrats but is identified as 
an Independent, and over the months, representatives of the Republican 
Party, the Democratic Party, and Senator Jeffords have come together on 
an approach that has now acquired the name, the tripartisan approach--
because it is not just the two parties but, it is actually three 
parties--an approach that actually will deliver a very good 
prescription drug benefit to our seniors and a plan that actually is 
unique among all of the different ideas that have been brought to the 
floor because it can actually pass the Senate.
  It has more than 51 votes in the full Senate, we believe, and it 
could pass the Finance Committee. Senator Breaux is one of the leaders 
in this coalition, and he has been a leader in the Finance Committee in 
support of this. So a great deal of work has been done to try to 
develop the kind of reform that is necessary to provide prescription 
drugs to our seniors.
  Then why the discussion on the Senate floor and what is going to 
happen next week? Well, at the early part of next week, we are finally 
going to have a chance to vote on some alternatives. There will be at 
least two. One will be this tripartisan plan I mentioned that has been 
offered by Senators Grassley, Hatch, Snowe, Jeffords, Breaux, and 
others, and the other will be a competing plan brought by some members 
of the Democratic Party, led by Bob Graham from the State of Florida. 
The two proposals approach the prescription drug issue in fairly 
different ways. I am hoping we will have a good debate about the 
difference between those two approaches.
  There are also approaches from other Republican colleagues who are 
even more different and in some ways provide a very direct benefit to 
seniors at a much lower cost than either of the two bills I just 
described. The problem is that at the end of next week, it is

[[Page 13604]]

doubtful the Senate will have passed any of these bills.
  How can that be if, as I said, there is majority support at least for 
one of the bills? I fear the problem is a political one, that there are 
some people who would rather have an issue than a bill, a problem 
rather than a solution, because of course the problem can continue to 
be talked about in a campaign context. I would rather have a bill that 
provides the benefit we can all take credit for, but if politics is the 
primary motivation, then clearly doing something is a good way to 
appeal to voters. But of course the whole point is it is the right 
thing to do.
  It is past time that we provided a drug benefit to our seniors. Why 
is it that my prediction is what it is? Ordinarily, if the Finance 
Committee brought a bill to the floor, we would vote on it and the 
majority would prevail. It either wins or it loses. But in this case, 
even though the Finance Committee has been working very hard under the 
chairmanship of Senator Baucus's and Senator Grassley's leadership on 
the Republican side, we are close to being able to mark up the bill in 
the Finance Committee and bring it to the floor. It is clear that the 
Senate majority leader has, according to Senator Baucus, indicated the 
bill would have to be acceptable to him in order for it to come out of 
the Finance Committee and brought to the floor. That was not the case 
with the so-called tripartisan bill. The legislation that has been 
brought to the floor by the majority leader is not legislation that 
would have come out of the Finance Committee.
  Why is that important? Because a point of order lies against 
legislation that does not come out of committee. In practical terms, 
that means you have to have 60 votes on the Senate floor to pass it.
  What has been set up is a process that is set up to fail. By not 
allowing the Finance Committee to bring its bill to the floor and be 
voted on by a majority of 51, we are setting up a requirement that any 
bill has to pass with 60 votes because it did not come out of 
committee; 60 votes will be very difficult to achieve because the 
Senate is divided roughly \50/50\ among the two parties.
  We have different approaches to this solution, this problem. The only 
bill that likely would pass is the so-called tripartisan compromise. 
But if it has to have 60 votes, that is a stretch, as well. I am not 
sure we can get 60 votes.
  At the end of the day, by virtue of the process that has been 
created, we are not likely to end up with any legislation at the end of 
next week. Then what will we do? Point fingers: It is your fault. No, 
it is your fault.
  The bottom line will be that the American people end up the losers. 
Our seniors will not have a prescription drug benefit because the 
Senate decided to operate in a way that guaranteed that conclusion.
  The House of Representatives has passed a bill that is a good bill. 
It is not exactly what I would do, but it is a good start. The Senate 
should act in the same way.
  Let me describe a little bit about what this tripartisan bill does. 
Even though it is not a bill I would have written, I am willing to 
support it, primarily because it does have a number of good ideas, and 
it can be passed and we can move on, get a bill to conference and to 
the President for signature to begin providing Medicare drug benefits 
for our seniors.
  The tripartisan plan is a comprehensive plan. It is a permanent plan 
with respect to providing drugs to all Medicare beneficiaries. It also 
has another feature that the other plans, by and large, do not, in that 
it provides reforms of Medicare that will ensure that as the program 
continues on out into the future, it will actually work. The problem 
with both Social Security and Medicare today is without serious 
modernizations neither one can provide the benefits that have been 
promised. Those are commitments that we should be ensuring we can keep.
  Under this plan, Medicare beneficiaries will have a new drug benefit 
option. They can keep their current Medicare plan and do nothing, or 
they can buy into the new drug plan provided for them. If they sign up 
for the new plan, it is completely voluntary on their part. If they 
sign up for the new plan, they will have choices so that they can pick 
what best suits them. They would pay a premium that is estimated to be 
about $24 a month, very similar to the monthly premium seniors now pay 
for Medicare Part B. They would be able to choose between competing 
plans. The plans would compete for their business and therefore would 
offer the best possible arrangements for each individual senior. The 
plans generally would have an annual deductible of $250. This is 
similar to the Part B deductible seniors now pay which is currently 
$100.
  A key difference is after $3,700 in out-of-pocket drug spending by 
the beneficiary, the Government would pay 90 percent of the costs, and 
the beneficiary would only pay 10 percent. As Medicare beneficiaries 
know, traditional fee-for-service Medicare does not have this type of 
important stop-loss coverage for the benefits it provides; stop-loss 
meaning after you pay a certain amount you do not have to pay anymore, 
the Government would begin paying the bulk at that point. It is 
important to protect the beneficiaries from high drug costs, 
particularly those who have a significant illness, or a longstanding 
illness that will require them to pay for drugs over a long period of 
time.
  Another important aspect of the proposal is it is affordable. The CBO 
has estimated the cost, what we call scoring, will be $370 billion over 
10 years. Given it is estimated the alternative offered by the House 
Democrats cost in the neighborhood of $800 billion to $900 billion over 
10 years, and the Graham-Miller proposal will cost almost $600 billion 
over 10 years, we clearly have an inability to fund that kind of a 
program. I believe the tripartisan plan is a much more affordable and 
practical plan.
  In an artificial attempt to keep down their costs, the Graham-Miller 
plan sunsets after just 6 years. The proponents of this plan claim the 
reason they sunset their legislation after 6 years, in the year 2010, 
is they want the ability to look to see whether changes are necessary. 
The fact is, it is a very expensive plan, about $600 billion over 10 
years, if enacted on a permanent basis, making it undesirable from a 
political point of view. That is one of the reasons that plan should 
not be supported.
  Let me also say we can examine legislation at any time, whether or 
not it sunsets, and we can review legislation every year and propose 
amendments to it. We do not need to sunset this legislation.
  I mentioned the fact that traditional fee-for-service Medicare does 
not have the stop-loss provision so people can continue to pay for 
high-cost drugs on and on. Under the tripartisan plan, beneficiaries 
will have a chance to join this new fee-for-service option instead of 
joining Medicare Part A and Part B, as they do now. It would have a 
combined deductible, instead of two separate deductibles that 
beneficiaries have to deal with today.
  Additionally, it would eliminate the beneficiary cost sharing for 
preventive benefits, such as breast cancer screening, prostate cancer 
screening, and screening for glaucoma. This allows Medicare 
beneficiaries to receive these benefits without having to pay a so-
called copay.
  One of the important aspects of the new option is the ultimate $6,000 
stop-loss coverage, especially important if a Medicare beneficiary has 
a long hospital stay. As I said, there are those who have serious 
illnesses that simply cannot afford to pay more than that. This new 
option is a complete benefits package as opposed to just a prescription 
drug package. Instead of just trying to address the issue of providing 
drugs, the tripartisan bill puts it into a new option in the 
traditional Medicare Program that currently exists so people will know 
what they have a comprehensive plan. They can make an intelligent 
choice and know that it is all there for them together.
  I will comment on another important part of the plan, and that is 
that it uses the current market system that

[[Page 13605]]

seniors are familiar with to deliver the benefits. The alternative is a 
strictly Government plan that has to be run by Government bureaucrats. 
They will make the rules. They would establish exactly what the 
benefits are over time and what the costs of those are. By using the 
market that is currently used, there is competition to provide the 
product that is the best for seniors at the lowest cost, so that 
seniors' needs will actually keep the costs down and keep the benefit 
structure positive, as opposed to the Government bureaucrats making 
those decisions.
  The tripartisan plan includes coverage for drugs within all 
therapeutic categories and classes, and provides timely appeals if 
there is any denial of drug coverage in a particular case. This allows 
the beneficiary to continue to have access to the needed drug and to 
call on outside experts to review any decision that would deny them 
those drugs.
  The plans that participate in the program will have to meet access 
and quality standards that are decided by the Department of Health and 
Human Services, including pharmacy access standards. We want to make 
sure in the rural areas Medicare beneficiaries have access to 
pharmacies they can go to and get good advice. In rare cases, where 
beneficiaries may not have a choice of at least two of these plans, the 
legislation guarantees they would have an option of a fallback plan.
  Providing affordable drug coverage is the goal of the tripartisan 
plan. That is why it subsidizes private plans to provide this drug 
benefit. Using this delivery method, as I said before, will both 
provide competition to hold down the costs and maintain the kind of 
program benefit that seniors are used to at the present time.
  The CBO has told the authors of the tripartisan plan that using this 
delivery method not only ensures Medicare beneficiaries access to the 
new drug plans but also the most effective use of taxpayer dollars. We 
know the plan will become more expensive over time. Seniors care just 
as much about taxes as anyone else and they want to know it is 
affordable. The more affordable it is, the more likely they can expand 
the benefit to seniors. So that is in their interests, as well.
  In contrast, the Graham-Miller plan uses government contractors to 
administer their drug benefit. These contractors would have little 
interest in holding down the cost of prescription drugs for Medicare 
beneficiaries. We all know what the ultimate result of this would be: 
the federal government would establish price controls on prescription 
drugs to hold down the costs. This would have a devastating impact on 
prescription drugs. Let me offer a real life example of what will 
happen here.
  In some major cities today you have price controls, or rent controls 
on housing. We all know what happens when you have these rent controls. 
The bottom line is the prices either go up or the conditions of the 
tenements go down because the people who own them are no longer in a 
position to continue to upgrade them because they cannot make a profit 
on them.
  What happens is that a severe shortage of housing is created and most 
people who do not have access to rent controlled housing have to pay 
very large amounts just to live in a small apartment. We are familiar 
with this in the area of housing.
  The same thing would happen with respect to drugs. If you use the 
alternative plan, which will ultimately lead to an attempt by the 
Government to control the prices--whenever you try to control the price 
of something, you get less of it. That is exactly what would happen 
here. People who do not have access will pay extremely high costs. Just 
as there is no incentive to build new rental housing units in areas 
with price controls, there will be no incentive to create new 
prescription drugs. After all, if you cannot make a profit with a new 
drug that you create, why would you go to the effort and expend the 
money to try to develop that new drug and put it on the market? It is 
just not worthwhile to spend the amount of money necessary to create a 
product when you cannot even cover the costs when you sell it.
  If we just think about price controls, if they had existed on 
prescription drugs over the last 20 years, you are probably not likely 
to have seen the creation of the fantastic new drugs we all have the 
benefit of today--to control cholesterol levels, like Lipitor; to help 
people with allergies; to help people with diabetes; and the list goes 
on. This could be the result of the Democratic alternative which would 
try to impose price controls without providing an incentive to create 
these new drugs. Over time, that will result in inferior medical care 
because fewer and fewer drugs are being brought to market that will 
help seniors as well as everyone else.
  This is another reason we should support the tripartisan plan that 
essentially builds on the system we have today, that gives seniors at 
least two types of choices. Medicare beneficiaries can either continue 
in the existing Medicare system or get to choose the new options. If 
you get into the new options, you are going to have at least two plans 
to choose from. So there is a lot of choice at the same time that it is 
also very similar to the current system private employees and federal 
workers have to receive their health care.
  Let me finally talk about how much the Government is paying Medicare 
providers to serve Medicare beneficiaries. It is a very serious 
concern. At some point we are going to have to deal with it. In the 
House of Representatives there was, I think, $30 billion added to their 
prescription drug benefit legislation to ensure that physicians and 
hospitals and other providers would receive the money they need 
literally to stay in business.
  We have emergency rooms around the country that are closing because 
they are not being paid. It is going to be necessary for us to provide 
some supplemental funding to the hospitals and other health care 
providers literally to continue to provide the benefits we are 
promising through programs such as Medicare and Medicaid. If there are 
not doctors and hospitals to serve people, we can pass all the laws we 
want, but it is not going to do people any good. So we are going to 
have to address this issue, whether it is on this legislation or 
legislation down the road.
  My colleagues may appreciate that by Federal law, under the Medicare 
Program, physicians will receive a 17-percent cut over the next 4 years 
in what Medicare pays them to see a Medicare patient. Since private 
plans frequently base their reimbursements on what the Government 
Medicare plan reimburses, the effect is, for virtually all physicians, 
that they are seeing this kind of drastic cut in what they are 
reimbursed, either by the Government--which provides about 50 percent 
of the health care--or by the private plans, which provide the 
remainder.
  According to a March 12, 2002, New York Times story, 17 percent of 
family doctors are not taking new Medicare patients because of this 
problem. They are simply not getting paid enough to cover their 
overhead costs.
  Last year, Senators Jeffords and Breaux and I introduced legislation 
that would have partially fixed this problem. This legislation now has 
80 cosponsors in the Senate. That means virtually everybody in the 
Senate has said we need to adopt this legislation. It would help to fix 
this problem of declining reimbursements for providers.
  Additionally, Home health care agencies will be taking a 15-percent 
reduction in payments starting October 1, skilled nursing facilities 
will experience a 17-percent cut in some of their Medicare rates, and 
these are just a few of the examples of payment reductions. So we are 
not going to be able to provide quality care under Medicare if we are 
not able to sustain the experts who are providing that care today.
  I am looking forward to working with my colleagues to ensure that 
through the reimbursements we will add, whether in this legislation or 
some other legislation this year, we will be able to provide that 
supplemental help to them until we are able to straighten out the 
payment formulas under which Congress reimburses the hospitals and 
other providers that are providing care called for by Medicare.

[[Page 13606]]

  Let me summarize the point about the difference between the two 
prescription drug proposals and how we are likely to pass a drug bill 
that will actually be signed into law. If we had been able to pass a 
bill out of the Finance Committee, we would only have to have a bare 
majority--51 votes. The tripartisan bill has support on both sides of 
the aisle, Democrat and Republican as well as Senator Jeffords, another 
cosponsor, to be able to pass. We could actually get together with the 
House of Representatives, make the changes, the compromises between the 
House bill that has already been passed and this bill, and get it to 
the President for his signature, and by the beginning of the fiscal 
year we could actually be implementing a new drug for our seniors that 
they do not currently have.
  But because that does not fit in with the plans of the majority 
leader, we are now in a situation where any bill that is brought here 
is going to have to have 60 votes to pass. Because of the realities of 
the political environment in which we operate, it is unfortunately the 
case that it is going to be very difficult to get 60 votes for any 
plan.
  The one that has the best chance is the tripartisan plan that I 
alluded to earlier. It is not the bill I would have written, but I am 
willing to support it because it is a good proposal that has the best 
chance we have to actually get something passed and deliver a real 
benefit to our seniors. We will have time to work the issues in the 
conference committee. We will have time to continue to modify the 
legislation after it is passed and signed into law. But we have to act, 
and every year we do not act is a year in which more and more seniors 
are denied the benefit that they need, that their physicians are 
prescribing for them and, unfortunately, many of them cannot afford.
  It seems to me we should put ideologies and politics aside and try to 
do something good for the seniors of our country and lay those 
differences aside to the extent that we can actually pass a bill. It is 
a good bill. It is a very good bill in terms of providing the benefits. 
It is costly, but with the reforms in Medicare that are included within 
it, I think over time we will be able to afford these costs. After all, 
it is a commitment that we should be satisfying for our seniors.
  I urge my colleagues, when the time comes early next week, to lay 
aside partisan differences, to support the tripartisan bill, the only 
bill that has a chance of succeeding here, and move on with the 
political process so we can work with the House of Representatives, 
pass it on to the President, who I am quite sure will sign it, and 
begin providing a prescription drug benefit to our seniors.
  Going all the way back to when Medicare was created, we treated 
people differently. Today we know medications are the primary method of 
treatment. We have to recognize that here in the Senate, something that 
all seniors understand very well. Let's recognize the reality, let's 
provide this drug benefit and really keep faith with the seniors we 
represent.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Lincoln). The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mrs. LINCOLN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Johnson). Without objection, it is so 
ordered.

                          ____________________