[Congressional Record (Bound Edition), Volume 149 (2003), Part 11]
[Senate]
[Pages 14458-14460]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    MEDICARE AND PRESCRIPTION DRUGS

  Mr. BREAUX. Mr. President, my colleagues, the Senate will begin, this 
week in the Finance Committee--on Thursday, tomorrow--marking up a 
historic reform piece of legislation dealing with the subject of 
Medicare and prescription drugs for our Nation's older Americans. I 
think it is a historic opportunity for the Senate, in a bipartisan 
fashion, to come together and produce a product that is something of 
which we can all be proud.
  Many Members of the Senate, when you talk about Medicare, would like 
the Federal Government to do everything and the private sector to not 
be involved at all. There are other Members, on the other hand, who 
would like the private sector to do everything and the Federal 
Government to not be involved at all. The answer to how we craft this 
legislation really is by trying to combine the best of what Government 
can do with the best of what the private sector can do.
  My colleagues, the bill that will be brought before the committee 
tomorrow, in a bipartisan fashion, under the leadership of Chairman 
Grassley and Ranking Member Baucus, does exactly that. I would like to 
take just a minute to try to explain what the bill will do in more 
general terms so everybody can get an idea what they are going to be 
looking at next week.
  A Medicare beneficiary, beginning next year, will have the 
opportunity to have a prescription drug discount card. That will be 
something they will start with at the beginning of the year. They will 
be able to take that card to their local drugstore and get anywhere 
from a 20-, 25-percent discount on the drugs they buy. In addition, we 
will provide a subsidy to low-income seniors, in addition to that 
discount card, to help them buy drugs.
  While that is happening, the Government will be engaged in trying to 
set up a process whereby, in the year 2006, Medicare beneficiaries will 
have more choices than they would otherwise.
  Under the principle of saying the Government should do what it does 
best and the private sector should do what it does best, we have 
established in the legislation a Medicare Program that says to seniors, 
if they want to stay right where they are in traditional Medicare, they 
will have the opportunity to do that, and they will also have the 
opportunity to get prescription drugs under their traditional Medicare 
Program.
  If they think that a new program being offered will be a better 
opportunity for them, they can voluntarily move into what we call 
Medicare Advantage, where they would also have access to a prescription 
drug plan.
  It is important to note that both of these opportunities, both of 
these choices, are Government-run programs. Both of those programs will 
be under HHS, Health and Human Services. Both of them will have the 
Federal Government supervising how the program is being run, to make 
sure no one in the private sector is scamming it or is not capable of 
producing the programs they are saying they can produce. That is what 
Government can do best--as well as help pay for them.
  If you are in traditional Medicare fee-for-service, all your doctor 
and hospital programs will be just like they are today. Then you will 
have the opportunity to have a prescription drug program which will 
have a standard benefit package spelled out in law. What we are talking 
about is a program with about a $35-a-month premium, with about a $275 
deductible and a 50 percent coinsurance for seniors for the drugs for 
which they pay.
  That is a generous plan that is very similar to what we have as 
Members of Congress and Members of the Senate. That drug program, 
unlike the hospital and doctor benefits, will be provided by the 
private sector to bring about competition, to have companies come in 
and say: We will provide it at this amount. They can vary the premiums 
as long as the Federal Government would approve it. For example, 
someone may like a higher deductible, someone may like a lower 
deductible. They could make those adjustments within a range, but the 
Government would have to make sure that is acceptable and that is 
approved by HHS.
  If a senior--for example, most younger seniors and seniors going into 
the program in the future--would like to go into that type of program 
for everything--for doctors and hospitals and for drugs--if they think 
that is the good program for them, that gives them choice, they will 
start selecting the Medicare Advantage Program where they will get 
doctor coverage, hospital coverage, and prescription drug coverage.
  This will still be in HHS, but it will be run by a new, competitive 
agency within HHS--not micromanaged, not price fixing, as we have now, 
but a new, competitive agency within HHS which will be created in order 
to make sure that the new program is being run properly. It will be run 
very similarly to how our program is run that is for Federal employees. 
We have Federal health insurance, but they use a private delivery 
system, and the Government makes sure everybody follows the rules and 
that there is competition, there is choice--that some plans may be 
better than others--and they have an opportunity, every year, to take a 
look at what is being offered; and sometimes they will pick this plan, 
sometimes they may pick another plan, but they will have the choice to 
pick the plan that is best for them.
  So I think, in summary, what we have before the committee is a plan 
that combines the best of what the Government can do with the best of 
what the private sector can do. The programs will still be under Health 
and Human Services, whether you take this plan or that plan.
  I think when you have private companies competing, you will have 
private companies that will be more involved in doing risk management 
and preventive medicine, preventive health services for the individuals 
who are involved. The Federal Government does not do any of that.
  We simply fix prices and we do nothing with regard to risk management 
or preventive health care. So we will have an intense debate. We will 
have a markup in the Finance Committee on Thursday. Then this bill will 
come to the floor.
  I think we will have an opportunity to do something that I think, for 
the first time, gives seniors an opportunity

[[Page 14459]]

to have a federally run program that provides private sector delivery, 
with choices that will benefit seniors. I think in the long term it 
will benefit all of us who are concerned about this.
  I commend Senator Baucus for his work and for working with the 
chairman, Senator Grassley, in putting together this package. The only 
way it is going to get done is bipartisan. Some will argue it is not 
enough, and I understand that, but this is 100 percent more than 
seniors have today. Congress should not walk away from a $400 billion 
program for providing prescription drugs to seniors because it is not 
more money, because that simply is not looking at what is possible and 
what is likely to happen in the real world.
  This is a once-in-a-lifetime opportunity. I encourage my colleagues 
to work with us to produce this package.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Michigan is recognized.
  Ms. STABENOW. Mr. President, I appreciate a moment to have a chance 
to give an alternative view. I thank my colleague from Louisiana. He 
has worked diligently on the issue of prescription drug coverage for 
many years, as have other of my colleagues on the floor regarding this 
issue. I wish to take this moment following his presentation to speak 
to the fact that there is much work left to be done by this body before 
we have prescription drug coverage that in fact meets the needs and the 
desires of the seniors of America.
  The plan being put forward tomorrow in the Finance Committee 
basically does two things. It offers two structures. The majority of 
those supporting it will openly indicate that they would prefer that 
the seniors of America go into managed care rather than stay in 
traditional fee-for-service Medicare, where the senior determines their 
doctor, pharmacy, and other choices.
  There is a desire to move people into what are called PPOs and HMOs 
and other managed care. We have experience with this because, since 
1997, there has been the choice on behalf of American seniors to stay 
in traditional Medicare, choose their own doctor and pharmacies, and so 
on, or to go into a Medicare HMO. We know as of today that 89 percent 
of the seniors who chose--they made their choice--have chosen to remain 
in traditional Medicare, which I believe is a very strong message about 
the confidence seniors have in the current system, the stability of it, 
the dependability of it. They know what the premium is, they know what 
the services are, and they decide their doctor. This has been in place 
and serving the seniors of the country since 1965.
  So the plan the committee is intending to report out tomorrow would 
create more choices of HMOs and PPOs and other managed care, and I 
support that for seniors. But what it does not do is add a prescription 
drug benefit under traditional Medicare as an integrated part of the 
traditional fee-for-service Medicare.
  All of the prescription drug plans that are part of this report 
tomorrow involve private insurance first. If private insurance is 
available in your State, or available in the region, if there are two 
or more companies there, regardless of the premium they choose, the 
benefits they choose, and how they structure it, the pharmacies that 
they will let you go to, however they structure it, you would have to 
choose one of those two private insurance plans.
  Now, technically, they are saying it is under Medicare but this is 
not a Medicare prescription drug benefit as the seniors of the country 
have asked to have provided to them. The seniors, potentially every 
year, would get paperwork in the mail about two different insurance 
companies--if that is available in their area--and they would have to 
wade through the paperwork and decide which of the two is best for 
them. The next year, if those two companies were not both available--if 
there was only two and one decided it didn't want to cover seniors 
anymore; it was too costly--then there would only be one insurance 
company; and the senior would have the ability, then, to go to a backup 
plan--something administered through Medicare.
  Then the next year, if there were two companies that decided they 
wanted to try their hand in covering Medicare prescription drug 
coverage in their region, they could not get the Medicare plan anymore; 
they would have to pick between those two companies.
  Potentially, this could happen every single year for a senior. 
Seniors are not asking for more paperwork or more choices of insurance 
companies. They already picked--89 percent of them--traditional 
Medicare, run through Medicare. Yet we are not giving 89 percent of 
them that choice.
  That is a major concern I have about this plan. There is a better way 
to do this, to give people more choices, but make sure one of the 
choices is traditional Medicare.
  I find it quite amazing that we are even talking about the 
structuring of a plan in this way at this time when we look at the fact 
that Medicare has been rising in cost about 5 percent a year and 
private insurance is going up 15 to 20 percent a year. In fact, I have 
small businesses, as well as large businesses, including auto 
manufacturers and many others, coming to me concerned about the 
explosion in their private health insurance premiums every year instead 
of choosing an approach that costs less so we can take some of those 
pressures off and put them into the best benefit, the best way to 
provide medicine for seniors. This approach uses what is a more 
expensive model--arguably, putting more dollars into the pockets of 
insurance companies but certainly not more dollars into the pockets of 
our senior citizens in the form of access to more lower cost medicines.
  This is a deep concern of mine. Why are we going through all this 
convoluted process? Well, I think there are two reasons. One is, there 
are those who philosophically believe we should move to private 
insurance, managed care. I respect that. I have a disagreement with 
that but I respect the philosophical difference. Some don't believe we 
should have universal health coverage under Medicare. I disagree.
  I think Medicare has been a great American success story since 1965. 
In fact, it is the one part of the universal health care we have in 
this country, and it concerns me deeply if we are going to roll that 
back. There is a difference in philosophy--and I appreciate that--on 
the part of colleagues on both sides of the aisle.
  We know there is something else at work here, and that is a very 
large and powerful prescription drug lobby, which I believe, at all 
costs, wants to make sure our seniors are not in one insurance plan 
together--40 million seniors and disabled people in our country, who 
would then be able to negotiate big discounts in prices. By dividing 
folks up into lots of different insurance plans, making it more 
confusing for people to stay in traditional Medicare and get 
prescription drug help, and trying in every way to move people more to 
managed care, the prescription drug companies know they will not be put 
in a position of having to substantially lower their prices for our 
seniors. I have deep concerns about this. I agree with my colleagues 
that we have to work together in a bipartisan way if we are going to 
put forward a bill. I am hopeful that through amendments we can, in 
fact, provide a better bill. I will be offering an amendment that will 
set up a real choice for seniors, allow them prescription drug coverage 
under Medicare, which is what they want, and then also allow the other 
options colleagues have put together in the legislation that will be in 
front of us.
  I believe that is a true choice, and I believe it is a choice that 
will allow prescription drug prices to go down, and that is a more 
cost-effective choice overall for Medicare as a system as well as for 
our seniors.
  I will also be working with colleagues, as we have been for the last 
2 years, on other efforts to lower prices for everyone. I am very proud 
of the fact that on this side of the aisle, we have brought the issue 
to this Chamber of lowering prices through greater competition in the 
marketplace and, in fact, we are seeing headway in that area.

[[Page 14460]]

  I commend my colleagues on both sides of the aisle who have been 
coming together in agreement on the issue of generic drugs. I commend 
the leader of the HELP Committee, the Senator from New Hampshire, Mr. 
Gregg, for his leadership, the Senator from Massachusetts, Mr. Kennedy, 
and the Senator from New York, Mr. Schumer, who helped lead this effort 
with Senator McCain to close loopholes that have allowed brand-name 
companies essentially to game the system, to keep lower cost medicine 
off the market, unadvertised brands called generics.
  There is a coming together that is very positive and bipartisan to 
pass legislation to close loopholes and allow greater competition. I 
believe this is one of the most important ways we will, in fact, lower 
prices more than anything else to get more competition for unadvertised 
brands in the marketplace.
  There are two other issues about which we have been offering 
amendments that I encourage colleagues to support as a part of this 
process. One is to open the border to Canada for prescription drug 
coverage. From the State of Michigan, it is frustrating for the 
seniors, families and, in fact, the businesses in Michigan to literally 
look across the river and know that on the other side of that river 
they can get their American-made prescriptions at half the price and, 
in some cases, at even deeper discounts.
  I urge we come together and open the border to Canada, and for 
colleagues who have resisted that, I ask that we look between now and 
2006, when the prescription drug bill takes effect, at the idea of a 
pilot project of opening the border to Canada until 2006 so that we can 
drop prices immediately.
  Our seniors have waited long enough. They do not need to wait another 
2\1/2\, 3 years to see prices go down and Medicare help come. Let's 
open the border now. Let's sunset the pilot project when this bill 
takes effect, and then we can evaluate any concerns that have been 
raised about that process. That is something we can do right now that 
would have 10 times the effect of lowering prices than another discount 
card for seniors.
  The other issue I am hopeful we can support on a bipartisan basis is 
to support States that are being creative in their purchasing power to 
get discounts for their citizens; efforts such as in the State of Maine 
to use their discount power to lower prices for the uninsured.
  There are very positive steps we can take together. The generic drugs 
bill is a very positive initiative. I appreciate the leadership on both 
sides of the aisle for bringing that forward and coming together in a 
positive way.
  To conclude, when it comes to Medicare prescription drug coverage, I 
remain deeply concerned about the direction in which we are going. I 
believe we are moving in a direction that actually dismantles the only 
part of universal care we have; that, in fact, will end up with more 
subsidies and more money in the pockets of insurance companies and drug 
companies as opposed to putting money in the pockets of our seniors who 
desperately need help with their prescription drugs.
  I hope that as we enter into amendments in the next week, we will 
come together in a way that improves this bill and strengthens it, 
keeping in mind that our first priority should be the people right now 
who need the help. We can do that if we are willing to work together.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Murkowski). The Senator from Nevada.

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