[Congressional Record (Bound Edition), Volume 149 (2003), Part 11]
[Senate]
[Pages 14970-14984]
[From the U.S. Government Publishing Office, www.gpo.gov]




    PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT ACT OF 2003--Resumed

  The PRESIDING OFFICER. Under the previous order, the hour of 10 a.m. 
having arrived, the Senate will proceed with consideration of S. 1, 
which the clerk will report.
  The assistant legislative clerk read as follows:

       A bill (S. 1) to amend title XVIII of the Social Security 
     Act to make improvements in the Medicare Program, to provide 
     prescription drug coverage under the Medicare Program, and 
     for other purposes.

  The PRESIDING OFFICER. The Senator from Maine.
  Ms. SNOWE. Mr. President, I rise today to praise the exceptional 
commitment of Chairman Grassley as chairman of the Senate Finance 
Committee, ranking member, Senator Baucus, to meld both political and 
policy differences and produce a bill that can garner support of 16 
members of the Finance Committee, 16 Members of the Senate Finance 
Committee who represented every facet of the political spectrum.
  That they were able to execute this extraordinary achievement and 
produce this bill, especially less than a year after the committee 
process was bypassed altogether, is a testament not only to their skill 
but also to their passion for this issue.
  They have built upon the leadership that has been provided by the 
President, who challenged the Congress to enact a Medicare prescription 
drug benefit, offered principles, and more recently issued the charge 
to the Congress to have a bill on his desk in July. The Senate majority 
leader has been steadfast in his commitment not only that a markup 
should be held in the Finance Committee but also to ensuring we had a 
timetable to make the process work and to have this legislation on the 
President's desk in July. Thanks to his determination and also to the 
determination, commitment, and longstanding contributions made by my 
colleagues, Senator Hatch, Senator Breaux, and Senator Jeffords, along 
with Chairman Grassley and Senator Baucus, with whom I have worked over 
the past few years, seniors will be able to celebrate a second 
independence day this summer: Independence from the crushing cost of 
prescription drugs.
  As one who teamed with Senator Wyden almost 6 years ago to forge this 
first bipartisan prescription drug coverage bill in the Senate, I know 
it has been a rather lengthy road that has led to this day, but it has 
been a much longer and more arduous journey for America's seniors who 
cannot afford to wait any longer for Washington to act. So I am pleased 
we now stand on the brink of passing legislation that will provide 
every senior with the security of a comprehensive prescription drug 
benefit under the Medicare Program. That means we have the opportunity 
to pass this benefit this month and to have it on the President's desk 
in July.
  We have certainly come a long way since I started in this process 
with my colleague, Senator Wyden, almost 6 years ago, when we fired 
some of the opening shots in this legislative battle. We progressed 
from the $28 billion former President Clinton proposed for a 
prescription drug proposal to the $40 billion program that we 
established--Senator Wyden and I, in the Budget Committee as members of 
that committee, for a $40 billion reserve fund over 5 years--to finally 
enacting a reserve fund several years later, again, a reserve fund for 
more than $300 billion. Ultimately, we had the proposal last fall for 
$370 billion, and then the bipartisan bill that included that amount of 
money, and then, of course, the $400 billion that was proposed by the 
President this year.
  I remind my colleagues that is almost $200 billion more than the 
President originally initiated for a proposal just last year. So we 
have come a long way in this process over a 6-year period, from $28 
billion to $40 billion to $300 billion to $370 billion to $400 billion 
right now.
  There are those who argue they have not been included in the process 
that has brought us to the floor of the Senate this week, but I can say 
we have had extensive hearings in the Senate Finance Committee. I 
remind my colleagues, since 1999 the Finance Committee has held 30 
Medicare hearings with 8 focused specifically on the creation of a 
prescription drug benefit. Last year, we spent 2 weeks on the Senate 
floor considering 5 different initiatives. During the Finance 
Committee's consideration of this bill last week, the chairman allowed 
an extensive discussion of the issues and more than 136 amendments were 
filed.
  The bottom line is the policies in this consensus bill certainly were 
not achieved in a vacuum. They are the combination of 5 years of 
vetting and bipartisan bridge building. They are the direct descendants 
of last year's tripartisan bill that we spent 2 years developing, 
meeting every week. That was, again, Chairman Grassley, Senator Baucus, 
Senator Breaux, Senator Hatch, Senator Jeffords, and myself, and this 
ultimately resulted in an evolutionary process of numerous iterations 
of various legislative initiatives and provisions. It has been a 
healthy competition of ideas that has been forged into this piece of 
legislation today, recognizing it is virtually impossible in a 51-49 
Senate to design the largest domestic program, in nominal terms, ever 
created and to pass the most significant enhancement of the Medicare 
Program in its 38-year history with a ``my way or the highway'' 
approach.
  Concessions must be made. Thankfully, they have been made in arriving 
at this policy equilibrium that acknowledges, not only what is 
politically possible but, most critically, what is workable and 
meaningful and effective for America's seniors. The President made 
concessions, Republicans made concessions, Democrats made concessions, 
and then there were concessions made across the ideological spectrum in 
each of our respective parties. But, in the final analysis we also have 
acknowledged that if we want to pass a prescription drug benefit, then 
we have to achieve a consensus to ensure that seniors get this benefit 
this year and now.
  As a result, we maintained that there were certain principles that 
had to be adhered to in the development of this legislation. Certainly 
it maintained the four principles we established when we designed the 
original tripartisan plan.
  First of all, the benefit must be universal--that is the No. 1 
priority for seniors, ensuring that any new benefit is available in 
every region of the country regardless of whether you live in an urban 
area or a rural area--and that you could receive this benefit at the 
lowest monthly cost possible; that the benefit be targeted, with lower 
income seniors receiving the most assistance, with limited cost sharing 
and reduced or eliminated premiums; that the benefit be comprehensive, 
providing coverage for every therapeutic drug class and category from 
the generics to the most advanced innovative therapies, while at the 
same time providing seniors with a choice in plans; and that the 
benefit produce real savings.
  In this bill, an individual with an annual income of $15,000 per 
year, and drug expenditures of $7,000 per year, would save $6,000, an 
80-percent savings. A couple with an annual combined income of $30,000 
and combined drug expenses of $5,000 would save $1,385, a 28-percent 
saving.
  All of these principles are essentially the ones that we developed in 
the tripartisan plan and even before that, when, with my colleague 
Senator

[[Page 14971]]

Wyden, in the legislation we introduced back in 1998, after months of 
intensive research and outreach and negotiations, we became more 
convinced than ever, working across the political aisle and also 
understanding the policy dynamics and what undergirds the Medicare 
Program, we had to create a universal benefit under the Medicare 
Program with a subsidy to help lower income families pay for those 
premiums.
  Moreover, because we believe individuals should have the same ability 
Members of Congress and Federal employees enjoy to choose the coverage 
that best suits their needs, seniors would be able to select their 
coverage from a variety of offerings by private insurers.
  Then, as today, there are those who felt that any meaningful, 
reliable benefit should be a Government-run program. But we also 
learned from the debate last fall, when we considered various proposals 
across the political spectrum. We considered a Government-run 
prescription drug benefit program and we got various estimates from CBO 
that at the minimum it would cost from $600 billion to more than $1 
trillion by certain estimates. That is a problem because, when we have 
a performance-based program that doesn't have any risk involved in 
delivering that program, the costs go up.
  We also saw with that approach that the program would be sunsetted 
after 7 years, to mask the true costs, so that seniors wouldn't have 
the true benefit of that program after 7 years because we could not 
contain the costs with a Government-run program. Obviously, it would 
affect the future liabilities and the solvency of the Medicare Program, 
which we know is going to be a serious problem down the road when we 
have more seniors retire.
  So, finally, we decided that an approach of that kind ultimately 
would have significant restrictions. Last year's bill, when it embraced 
a Government-run program, not only did it sunset, but it also 
statutorily limited the number of drugs a senior could purchase within 
a therapeutic class to just two.
  So that is why we diverged from that road of going down the path of a 
Government-run program, so they can make sure seniors have options, and 
also so they can have the availability regardless of where they live in 
America. Our bill today puts no limit on drug coverage because seniors 
shouldn't be limited in their options for treatment, just as they also 
shouldn't be limited in their options for coverage. The fact is, the 
one-size-fits-all approach doesn't work when it comes to writing 
prescriptions. And it certainly won't work when it comes to 
prescription drug coverage either.
  The question is how to provide seniors with choice without 
undermining the integrity of the basic tenets of the Medicare Program. 
That was the major issue that confronted us in developing the 
tripartisan plan and certainly the proposal that is before us today. I 
believe the answer is to allow seniors to utilize the traditional and 
the familiar fee-for-service delivery method.
  Over the years, people have come to feel comfortable with this 
approach and with this model. There are those who have already been a 
part of this program, and those who will be retiring and may want to 
join a fee-for-service but at the same time be allowed access to other 
plans that are developed by private insurers which may be better able 
to tailor the differences to suit the varied needs of seniors today. 
This necessitated a give-and-take in this legislation.
  Specifically, some have criticized this plan for not having a defined 
benefit. But a defined benefit means all benefits will look alike, 
which brings us back to the one-size-fits-all approach. Rather, under 
this legislation, plans have the flexibility to offer the standard 
benefit as prescribed in the statute or to offer a benefit that is 
actuarially equivalent to the standard option.
  The guideline insures that all plans will have the same $275 
deductible, $3,700 in true out-of-pocket costs for stop-loss coverage, 
and the total value. But it allows plans to vary cost sharing 
requirements between the deductible and stop-loss to create options 
that are the most appealing to the beneficiaries in that particular 
region.
  In other words, with this legislation, the value of the benefits must 
be the same--not necessarily the benefits themselves. Again, it comes 
back to choice. Seniors will be able to choose. They can do so secure 
in the knowledge that those plans offered by private insurers include 
benchmark standards.
  This bill's requirements ensure that the overall quality of those 
standards is protected and preserved in the kind of coverage that will 
be delivered under this proposal.
  In order to satisfy the concerns of those who say that offering 
numerous private plans may be disrupting or confusing to seniors, the 
bill instructs the administrator for the Center for Medicare Choice to 
enter into 2-year contracts so seniors will not have to change plans 
every year if they are happy and content with the services they are 
receiving. This also should act as an enticement or inducement to 
private plans to participate because it provides them with the 
stability as well.
  Moreover, the new program builds off of strict consumer protection 
from current law under the Medicare+Choice Program that requires the 
administrator to approve marketing material and provide educational 
materials to help beneficiaries compare and contrast benefit options.
  Remember, the model we are using is the Federal Employees Health 
Benefits Program that serves Members of Congress as well as Federal 
employees. In fact, the average age of a Federal employee enrollee is 
61. Choice works for them. Yet we cannot lose sight of the fact that 
over 80 percent of current fees voice strong support for the program 
and may not want to change. They may not want to test the unproven.
  That is why we believed it was critical that this bill provide an 
equal drug benefit no matter which option a senior may select because 
more than 80 percent of seniors are now with the current Medicare fee-
for-service program. Because those new retirees in this next decade may 
be more accustomed to what would be delivered under a preferred 
provider network, we wanted to offer options and choices among the 
plans that seniors could select without undermining the integrity of 
the existing Medicare Program.
  I know some of my colleagues would have preferred to offer a 
differential benefit when it came to the prescription drug coverage. 
Depending on which program you enrolled in, they wanted a better 
benefit under the private plan as an incentive to participating in the 
privately created model, known as PPO.
  Again, we have no certainty as to how these plans will work. We 
obviously have a track record for the traditional fee-for-service 
program. We know how that program works. But we don't know how the 
privately delivered program will work in the final analysis. That is 
something we will learn about as time proceeds.
  CMS predicted, for example, that 43 percent of seniors would 
participate in private plans. But the Congressional Budget Office 
estimated that only 2 percent would participate in the private 
programs.
  What happens in the event private prescription drug benefit delivery 
plans don't flourish in a particular region as projected? We don't have 
the traditional fee-for-service program to fall back on. What then 
happens? We can't afford to go back to the days before the Medicare 
Program was created and instituted in 1965 because those were the days 
of patchwork coverage that varied widely, if it existed at all for 
seniors. Again, it depended on where you lived or if you had any kind 
of medical access or if you had health insurance, which in many cases 
seniors didn't. That is why we established the Medicare Program back in 
1965--so that we created evenness, fairness, and accessibility for all 
seniors--a platform of a level of care for seniors in this country 
regardless of where you lived in America, regardless of your income. 
That is why we felt and strongly believed that we needed to extend 
fairness to everyone. That was the spirit of the Medicare Program in 
the first place.

[[Page 14972]]

  Providing a differential or an equal prescription drug benefit is 
just one of the many sound compromises in this legislation, but at the 
same time it is consistent with embracing the universal principles of 
the Medicare Program.
  I know some have said we have already created a private delivery 
health option that is doomed to fail; and, that it would hinder the 
private market so that plans will never possibly participate in this 
program.
  In fact, we have worked very closely with insurance actuaries and 
firms that we hope to attract so that we understand how they make 
business decisions as well as how they deliver care under those plans 
and with whom they negotiated to develop those networks and those 
plans. With that knowledge, we have incorporated a number of mechanisms 
in this legislation before us today. Those mechanisms include risk 
corridors, reinsurance and premium stabilization accounts which are 
intended to build a stable, productive model that we believe will 
attract and keep companies in the programs. That is very important.
  We think these are the types of approaches and methodologies and 
procedures that will attract private insurers to participate in the 
programs on a regional basis.
  Furthermore, we are instituting new cost-sharing options such as 
combining the deductibles for Part A and Part B services--a copayment 
system that better resembles the private sector today.
  For example, under the Medicare Program, there are many copayments 
for preventive health care services. We happen to think that is in the 
wrong direction, that is the wrong emphasis. There are no copayments 
under this model for preventive screening. That is very critical. It is 
important to allow seniors to have access to those types of protective 
mechanisms that helps prevent more serious illnesses down the road.
  It also provides a catastrophic cap for medical services which 
currently is not included in the Medicare Program.
  Again, there are many upgrades and updated approaches to the private 
delivery model that do not exist in the traditional fee-for-service 
program.
  Again, people will have choices in making decisions as to whether 
this better works for them or whether they prefer the kinds of support 
and insurance included in the Medicare Program under the fee-for-
service as we know it today.
  Again, we are establishing a structure that better resembles options 
delivered in the private market in this newly created private plan to 
offer more choices to seniors and to determine which structure is more 
attractive for their needs.
  Again, in offering this option, I believe--and many of us believe--
that it was also important not to undermine the fee-for-service 
programs by instituting unproven choices. We do not know whether these 
privately created systems will work in every part of the country.
  We do not know who they will negotiate with in that region for 
providers so that seniors have access to a range of providers and 
specialists across the board which, obviously, is what the traditional 
fee-for-service program provides. So there is no way to guarantee that 
private companies will deliver services in all parts of the country.
  This concern is especially acute for those of us who represent rural 
States such as Maine, where no Medicare+Choice programs operate. We 
understand there have been many problems for many reasons as to why the 
Medicare+Choice Program does not work very well in many regions of the 
country. It works well in some but not in many parts of the country.
  So we learned from those lessons, and we developed a fallback 
proposal in this initiative that provides security to current Medicare 
beneficiaries or future beneficiaries that no matter where they live, 
we ensure that in regions where private plans choose not to participate 
the Government will contract with companies, like pharmacy benefit 
managers, to deliver the benefit.
  Some have criticized this option, saying it will remove incentives 
for plans to participate in risk-bearing models. This bridge is 
necessary to address Members' and beneficiaries' legitimate fears that 
they could be left out of the coverage. That is important because I 
think it is essential we have a guaranteed, seamless Government 
fallback. But the fallback we have designed in this legislation is one 
of last resort; it is not the one of first resort. It will not be 
triggered unless two private plans will not enter the market, and we 
limit the contract to 1 year because we must first do everything we can 
to see that private delivery systems have a chance to flourish in this 
program.
  To further entice private plans to enter the market, the 
administrator is allowed to reduce the risk that a plan bears to almost 
nothing. Again, the goal is to attract private plans into the market, 
to work with them to manage their risk, and to make it an attractive 
market to serve while, at the same time, offering seniors everywhere a 
guaranteed access to care that will exist under a private delivery 
system because access to care should not be segmented or guaranteed 
based on ZIP Code.
  In that light, another concern the committee took action to correct 
last week was the threat of large variations in the premium across 
regions. One of the basic tenets of the Medicare Program, undeniably, 
is to provide health care benefits to seniors and to persons with 
disabilities for the same price. Whether you are a senior living in 
Arizona or Portland, ME, you will pay for the same part B premium.
  We need to recognize how disparities in prescription drug benefits 
could lead to variations and instability for seniors enrolled in the 
private plans. Just consider the case of Medicare+Choice. This was an 
issue that was raised last week during the course of the debate on the 
markup in the Senate Finance Committee. The premiums in some regions of 
Florida, for example, in Medicare+Choice, are $16 a month while in 
Connecticut they may pay $99 a month.
  Just from a basic standpoint of fairness, do we really want to create 
such a system for seniors with their drug coverage? So we need to level 
the playing field. Obviously, I don't want seniors in Maine to wonder 
why they are paying a different price for their premium than their 
neighbors across the border in New Hampshire. How can we find out if 
private plans are superior to fee-for-service if there are wild 
fluctuations and disparities between plans and the traditional 
benefits? So that is why we have to determine, as we proceed with this 
program, how best to address that issue.
  Some have said we should stipulate the premium in this legislation in 
the statute and limit the level of variation. But according to CBO, 
that would result in higher costs and less efficiently run programs 
because plans would no longer have the incentive and the flexibility to 
craft benefit options that are the most appealing to seniors. As we 
have seen with other Government programs--whether it is job training 
and placement services--when Congress spells out the requirements, 
plans typically provide the minimum necessary and never aspire to a 
higher goal.
  The committee unanimously adopted an amendment Senator Lincoln and I 
offered that provides the Secretary of Health and Human Services the 
authority to adjust governmental payments to minimize any variation 
that may result in premiums across the regions due to variations for 
the standard coverage option under the new Medicare stand-alone 
prescription drug benefit. We also direct the General Accounting Office 
to study this issue once the program is operational to determine if 
wide variations actually materialize. I am confident these two actions 
will provide Congress with the information necessary to make informed 
decisions and will allow the Secretary to take corrective actions when 
necessary.
  I think this is an important issue. Obviously, this is a very new 
program. We are testing new theories, new operations that basically 
reflect the state of health care today with the technologies, with the 
methods, with the providers, with the type of specialties that exist 
because we want to be able

[[Page 14973]]

to give seniors access to a variety of choices across the spectrum, 
including their access to prescription drug coverage and how it can 
best be delivered to seniors.
  So we want to test the innovation, the creativity, and the 
marketplace as well. That is why it is so important to allow the 
flexibility to be incorporated in this legislation, but, at the same 
time, if it does not work in the way we hope or intend, we have given 
the Secretary the ability to make adjustments on those premiums because 
it is absolutely important that he has the authority to do so. That is 
why we included this in the legislation.
  We will also study the issue to determine what other actions in the 
future must be taken to ensure those kinds of wide variations and 
fluctuations do not occur.
  Finally, I want to turn to the last part of my discussion, which is 
the issue of the low-income subsidies, which I think is a remarkable 
aspect of this legislation.
  We have improved on the tripartisan plan. We learned a lot in our 
efforts, in our initiatives, over the last 2 years in terms of what is 
essential to establish a strong, low-income subsidy for our seniors 
under the Medicare program.
  First of all, we raised the eligibility criteria to 160 percent of 
poverty--which is $14,368 for an individual and $19,360 for a couple--
from 150 percent of poverty which we included in the tripartisan bill 
last year, and we used the eligibility criteria under the existing 
Medicare low-income assistance programs to create a seamless and simple 
process to target the most help with premiums, deductibles, and 
copayments to those nearly 9 million seniors with incomes below 
$12,123. The nearly 6 million seniors who receive health care coverage 
from both the Medicare and the Medicaid program--those known as dual 
eligibles--will continue to receive their drug coverage from the 
Medicare program. The States will receive additional assistance but 
this is intended to allow continuity of care and reduce confusion among 
the poorest and the most vulnerable.
  My home State of Maine stands as an example of the impact this bill 
will have on the 40 million individual Medicare beneficiaries. For 
example, in 2003, there are 19,000 seniors and disabled individuals in 
Maine who receive health care benefits from both the Medicare and the 
Medicaid programs, the so-called dual eligibles. An additional 17,700 
seniors qualify for the Qualified Medicare Benefit Program which serves 
people with incomes below 100 percent of poverty, and they will receive 
the greatest level of subsidy under the new Medicare prescription drug 
program. And 6,100 seniors are eligible for another program that serves 
people with incomes below 135 percent of the poverty level.
  In total, over 90,000 of the estimated 215,000 Medicare beneficiaries 
living in Maine will qualify for one of the low-income subsidy 
programs. That is almost half of Maine's senior and disabled 
population. Each will receive substantial assistance each year.
  Moreover, unlike the tripartisan legislation, this bill will provide 
assistance without an asset test to the remaining 8.5 million seniors 
with incomes under 160 percent of poverty regardless of their level of 
assets. Taken together, that is nearly half of all Medicare 
beneficiaries or 43 percent of the population. That is an important 
issue. That is a departure from the tripartisan plan last year because 
we did have another type of asset test that prevented 40 percent of 
low-income seniors from receiving coverage. It was a concern to all of 
us including that asset test, but we were trying to include a program 
under the $370 billion window that we had for financing this program. 
This year we used a more consistent methodology and programs that are 
already familiar to seniors across the country. It is fairer. We have 
basically eliminated the asset test for those individuals and couples 
under 160 percent of poverty level.
  We learned from discussions over the last 2 years that a great deal 
of concern existed that we were excluding a large number of people with 
very low income who, because of their assets totaling more than $4,000 
for an individual or $6,000 for a couple, would not be eligible for the 
subsidy. We removed that asset test and, therefore, now we have 17.5 
million seniors who will be eligible for low-income assistance. At the 
same time we ensure those under 160 percent of poverty will never be 
subject to a gap in coverage where they would be responsible for 100 
percent of the cost. All of us would have preferred to eliminate that 
gap in coverage. But CBO again stated it would cost, by their 
estimates, somewhere in the area of $200 billion in order to accomplish 
that goal. So we have to look at what is before us as a starting point, 
a very strong starting point.
  We have to consider that nearly 88 percent of all seniors, 35 million 
people of the Medicare beneficiaries, that is 35 million of the 41 
million Medicare beneficiaries, will spend under the $4,500 threshold 
of this so-called gap in coverage. That is before counting the 
supplemental coverage many have that may well keep even more seniors 
below that gap in coverage. Moreover, it may also be likely, as with 
the Federal Employees Benefit Program, that this bill will tailor the 
benefits and offer options that don't include a gap. We are not 
preventing private insurers or plans from including that gap. We 
provide them with an actuarial equivalent benefit, the same value for 
everyone. They could come up with a variety of plans, including 
eliminating that gap in coverage. But for the 12 percent of 
beneficiaries who have drug costs in excess of $4,500, and more 
specifically the 7 percent that spend more than $3,700 per year in out-
of-pocket costs, they will qualify for the program's catastrophic 
coverage where the Government pays 90 percent of the cost.
  This proposal counts toward the stop-loss coverage contributions made 
by the individual, a family member, Medicaid program, or the State 
pharmacy assistance programs which will further direct help to the 
lowest income seniors, those under 135 percent of poverty and those who 
have minimal assets.
  Finally, I know many across the political aisle are concerned about 
including employer contributions toward the computation of the $4,500 
cap. They point to the concern that some seniors will lose their 
employer health care coverage because this bill doesn't count employer 
contributions toward that catastrophic cap and that according to the 
Congressional Budget Office--again we had to use those determinations 
in order to design the type of program we could include in this 
legislation within the $400 billion--33 percent of seniors had 
employer-sponsored coverage in 2002. They estimate that approximately 
37 percent of this 33 percent population will lose their coverage by 
2013. That is approximately 4 million Medicare beneficiaries.
  Obviously, this is troubling. But it is important to note that the 
Congressional Budget Office could not really estimate how much of this 
loss would be attributable to passage of this legislation. That is 
because employers are already dropping health care coverage for their 
former employees at an alarming rate. As we have seen from so many of 
the estimates that have been submitted to the committee, from 1999 to 
2001, 7 percent of employers dropped retiree coverage. And from what we 
can determine, that trend is worsening, not improving.
  Given the limited amount of money available, I believe the most 
prudent path may be to make adjustments to encourage companies not to 
drop their coverage but not at the expense of seniors. Obviously the 
priority is to make sure we get the very best benefit possible for 
everyone in the Medicare program and to do it, to the extent that we 
can, within the $400 billion program.
  I must tell you as it stands, this legislation does include a number 
of provisions that are intended to help employers and encourage them to 
maintain retiree health care coverage.
  Employers can participate in this program in a number of cost-
effective ways. An employer can wrap their benefit package around the 
Medicare benefit which means that Medicare pays first, leaving the 
employer responsible

[[Page 14974]]

only for the remaining cost. An employer can also directly pay their 
retiree's premium under traditional Medicare instead of offering a 
separate plan. And finally, under the new Medicare advantage option, 
they can bid to be their own plan and deliver the services to their 
retirees, which allows them to share the costs of the care with the 
Government.
  Finally, the Medicare Advantage Program provides the flexibility to 
allow employers to pay for enhancements added to the Medicare standard 
benefit. I supported these provisions because I believe they are fair 
and appropriate. But this issue remains a vexing challenge. What is the 
correct balance where we are not discouraging employers from offering 
coverage for their retirees yet not penalizing seniors who don't have 
the benefit of employer-sponsored coverage? That really is the problem. 
Any changes we make to offer incentives and encourage companies to 
continue their retiree coverage places seniors who don't have this type 
of coverage at a financial disadvantage. Obviously, that is not 
consistent with the tenets of the Medicare Program.
  I want to continue to work with the chairman, who has indicated his 
interest, to explore various ways to address the issue, along with 
Senator Baucus, because it is an issue we want to explore further so 
that we do not add to the costs of the program because employers 
dropped retiree coverage.
  In the final analysis, there will always be those who will question 
if this is the best policy. Others will be concerned about the prudence 
of committing the Government to such large future expenditures. I, for 
one, am confident we have struck the correct balance. The average 
senior will realize $1,200 in annual savings, and the lowest income 
will see even more assistance. I realize this proposal will not help 
every senior in the same manner. But that is also because seniors have 
wide variations in drug costs.
  What I do know is that the lowest incomes and those with the highest 
drug costs will realize substantial savings. During a time of growing 
deficits, this proposal is the best policy to meet the needs of this 
population as represented by the Congressional Budget Office estimates. 
This is an important issue because, again, it is getting back to the 
fairness and balance in the legislation and who will participate.
  The Congressional Budget Office estimates that over three-fourths of 
Medicare-eligible beneficiaries will enroll. That is an important 
projection for the future well-being of the Medicare Program because 
you are going to have a blend in the participation that can also 
provide the very best benefit to those who want to enroll in the 
program. But you can have a blend in the regions that are developed 
under the new Medicare Advantage option between urban and rural of 
those who are healthy and those who are sicker. I think those types of 
blends will be a marked departure from the Medicare+Choice program.
  We create much larger regions. There will be approximately 10 regions 
in the country. It is estimated by the director of the CMS that we 
could possibly have from six to eight plans participating in each 
region in the country, giving a breadth of choices to those who 
participate in the program. Overall, we should have high participation 
in the drug benefit program.
  So this bill undoubtedly will be one of the most significant pieces 
of legislation that we can pass this decade, and beyond. We can make 
history today if we set aside our partisan differences. The time is 
right, the policies are right, and a prescription drug benefit is 
certainly the right thing to do for America's seniors. Passing this 
legislation will be a tangible verification of society's commitment to 
providing for those who have walked the path before us.
  We can win this, Mr. President. We have tried before and failed. But 
I think the time has come for us to do what is right for America's 
seniors. Let us help them, help the Medicare Program to travel this 
last mile, and bring the Medicare Program into the 21st century.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Enzi). The Senator from Iowa is 
recognized.
  Mr. GRASSLEY. Mr. President, I thank the Senator from Maine for her 
very fine statement. More important, a thank-you to her is warranted 
because of the long hours of work she has put into this subject of 
Medicare and prescription drugs. The strengthening and improvement of 
Medicare and a prescription drug program has been something the Senator 
from Maine has worked on for a long time. So I not only compliment her 
on her statement today, but I thank her for the work she has done in 
putting together the product that is before us. Even more so than the 
product that is before us, I acknowledge the work she was part of 
during the years 2001 and 2002 as part of the tripartisan group of 
Senators, including Senators Breaux, Jeffords, Hatch, Senator Snowe, 
and this Senator from Iowa, because it was the months of work during 
the spring of 2001 through the summer of 2001, and then picking up 
again in the spring of 2002, until we brought a bill to the floor 1 
year ago now to discuss. The success of that work then laid the 
foundation for what we can do right now. That involved hours and hours 
of work for individual Members of the Senate, and more work yet for the 
staffs of each of those Members. So I thank her for putting in the time 
in 2001 and 2002, which did not yield a successful product at that 
point but very much made it possible for us early in the year 2003 to 
be before the Senate. Again, I thank the Senator from Maine for that 
foundational work.
  I think the next speaker will be the Senator from Louisiana, Senator 
Breaux. While the Senator from Maine and I might be able to say we were 
part of the foundation of the bill that is before us, Senator Breaux 
was in the trenches digging the footing for that foundation years 
before we got involved, because he was a member of what was called the 
Commission on Medicare, later called the Breaux Commission. Because of 
his work--even before our work on the tripartisan bill--I acknowledge 
the extra effort the Senator from Louisiana has brought to this point. 
So I thank him and, for a second time, I thank the Senator from Maine.
  The PRESIDING OFFICER. The Senator from Louisiana is recognized.
  Mr. BREAUX. Mr. President, let me first express my appreciation for 
the very kind remarks of the chairman of the Senate Finance Committee. 
I think it is only appropriate to acknowledge that had it not been for 
his perseverance and determination, we would not be here today. He set 
a very tough timeline on the Senate for considering this bill. He took 
it through the appropriate hearing channels in the Senate Finance 
Committee to bring it to this point. We had extensive staff briefings 
and discussions among Republican staff and Democratic staff. We had a 
markup that many people said was really very pleasant. We had 
differences of opinion, but everybody had an opportunity to be heard. I 
credit creating that atmosphere to the leadership of the Senator from 
Iowa. We have had situations during the year--the tax bill is one of 
them--where we did not follow that process. As a result, perhaps the 
product was not as good as it should have been.
  In this case, I think the Senate Finance Committee, in particular, 
rose to the challenge, and under the leadership of both Senator 
Grassley and our colleague Max Baucus on our side, we were able to 
create a cohesive group of men and women who were dedicated to 
producing a product in a bipartisan fashion. That is exactly what 
happened with a 16-5 vote on a Medicare reform and prescription drug 
bill, which would not have been possible had it not been for his strong 
leadership.
  To the Senator from Maine, I offer my congratulations for her 
involvement, dedication, and her willingness to step outside the 
traditional boundaries and take some chances politically, as well as 
substantively, in order to help produce a product which, in the end, 
ultimately will be something of which we can all be very proud.
  I think all of us realize the time has come that it is necessary for 
us to step

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out of the traditional boundaries that may put us at risk with some 
constituents we all represent in order to produce a better product for 
those very constituents who may say don't go there; but for those who 
had the courage to go there, we now have a product of which we can 
justifiably be proud. The Senator from Maine has been a major player in 
all of these efforts. We appreciate that very much.
  Mr. President, let me take some time, from my perspective, to try to 
present where we are with regard to the Medicare reform and 
prescription drug bill. It was in 1965--38 years ago now--that the 
Congress of the United States did something that had never been done. 
The Congress and President Lyndon Johnson at that time made a 
fundamental decision that older Americans were going to receive health 
care benefits, and that the Federal Government had an obligation to 
help provide those benefits. As a result of that commitment, the 1965 
Medicare Act was adopted.
  Ever since then, for 38 years, seniors knew when they reached the age 
of 65, they would have access to a Government-run health care program. 
That health care program was principally designed to do what medical 
science said was necessary back in 1965. It provided hospital insurance 
coverage for seniors who went to the hospital, and it provided doctor 
coverage for seniors who had to see a doctor.
  In 1965, those were the two fundamental ways in which people received 
health care in the United States. You went to see your doctor and, if 
you were sick enough, the doctor put you in the hospital. So for the 
very first time we said to senior citizens, 65 or older, when you reach 
that age, you are going to be part of a Government-run insurance 
program on your behalf.
  For a long period of time it was a state of the art, as far as health 
care was concerned, with regard to our Nation's seniors. It has really 
worked. It has sort of been the envy of many parts of the world because 
many countries did not have the quality health care we had for our 
Nation's seniors. That, as I say, was back in 1965, and today is today.
  While health care has changed dramatically, while science has 
improved incredibly so, the program that was designed in 1965 is still 
pretty much the same program that seniors look to in order to receive 
their health care.
  It has been a good program, but it is not nearly as good as it should 
be nor nearly as good as we can make it. That is why we are here today: 
To create a better program, to build on what was the best in 1965, to 
create the best in the year 2003.
  Medical science has advanced dramatically. The health care delivery 
system that brings about that health care for our seniors has not 
advanced very much at all. It is still what I call frozen in the 1960s.
  Some have argued: All you have to do is put more money into the 
program and it will work fine. I suggest just putting more money into a 
1965 model program is like putting more gasoline in a 1965 model 
automobile. It is going to still run like an old car no matter how much 
gas you put into it.
  No matter how much money we put into the Medicare Program that was 
built in 1965, it is still going to run and operate as a 1965 model. 
Today, in this body, and this period of time before the Fourth of July, 
hopefully we will have an opportunity to do something that is as 
important as what was done in 1965 when the Congress made that 
fundamental decision to provide health care for seniors.
  With what we have before us, we can create a 21st century program 
which takes the best in science and the best in medical care and puts 
it into a quality delivery system.
  It is interesting to note when I talk about why the current system is 
deficient, one of the most important issues I bring to mind is the fact 
that the Medicare Program today only covers about 47 percent of an 
average senior citizen's health care costs they experience every year. 
That means 53 percent is covered by the Federal Government, but it also 
means 47 percent is not covered.
  Where do seniors go for the 47 percent of their health needs that are 
not covered in this 1965 model program? If they are poor enough, they 
also get Medicaid, or if they look for help from their children or 
their grandchildren, that makes up part of the difference. Or if they 
are fortunate enough to have enough funds, they can buy extra 
insurance, called the Medigap Insurance Program, to cover the 47 
percent of their health care costs Medicare does not cover.
  No one I can think of in the private sector--certainly including 
Members of Congress--has a health insurance program that does not cover 
47 percent of their health expenses. No one would want to go out and 
buy a health insurance program that did not cover on average 47 percent 
of their needs. It would be a terrible buy. You want something that 
covers as much as possible, and Medicare does not do that.
  People are forced to buy the extra insurance or become so poor that 
they qualify for the Medicaid Program or have their children or 
grandchildren or perhaps just their friends help them with their 
Medicare costs that the program does not pick up.
  In addition, one of the most important fundamental advances in health 
care is the advent of the prescription drug program that has saved 
lives and allowed people to live better lives. The correct and proper 
use of pharmaceuticals today can keep people out of hospitals or it can 
make their hospital stay shorter. It can treat diseases that are 
prevalent today and make our lives better and our families more 
comfortable. Yet pharmaceuticals are not even covered by Medicare 
unless you happen to be in the hospital and physicians give you the 
pharmaceuticals in the hospital. Once you leave the hospital, the 
Medicare Program does not cover the pharmaceuticals.
  It is a perverse incentive to stay in the hospital longer so you get 
your drugs paid for, when really you ought to use drugs to get out of 
the hospital sooner or to not have to go there at all.
  The Medicare Program is full of deficiencies. It does not cover 
eyeglasses. It does not cover pharmaceuticals. It does not cover many 
of the preventive health care measures we should cover. In addition, 
the Medicare Program does not do something that today is one of the 
most important functions we can do in health care, and that is 
preventive medicine.
  We talk about how high health costs are in this country today, and 
one of the principal reasons is because people generally do not go to 
the doctor until they are sick. In reality, they ought to be going to 
the doctor when they are well to find out what they should be doing in 
terms of preventive care to make sure that whatever they are prone to 
have later in life is pushed back as far as possible or perhaps even 
eliminated. Preventive care can do that, but the Medicare Program does 
little, if any, preventive care, and it should not be like that.
  In fact, private health care systems work very hard to create 
preventive health care measures to keep the cost of health care down, 
to get people to live healthier lives now so their health care costs 
later are less or perhaps even eliminated. Medicare does not do that.
  The one thing Medicare does not do very well is to bring about 
innovation. We have to have an act of Congress to do many functions 
that the private sector can do automatically. The Medicare Program 
requires an act of Congress, as I have cited many times before, to try 
to bring about new innovative ways of delivering medicine.
  We actually had people come to our office and say: We need an act of 
Congress because we now have a medicine that can be orally administered 
instead of intravenously injected, but Medicare does not pay for it 
unless it is intravenously injected. So we need an act of Congress to 
allow Medicare to pay for something that can be orally administered in 
the form of a tablet. That is not how medicine should work in the 21st 
century.
  We have before us a medical program for our Nation's seniors that was 
state of the art in 1965. It has been a wonderful program. It has been 
a program that has saved lives and a program

[[Page 14976]]

that has made people's lives much better, but it is a program that is 
frozen in the 1960s.
  We have today the opportunity to create a modern 21st century health 
care delivery program that looks out over the country and decides what 
is the best way of delivering health care; how can we make it work 
better. That is the proposal before us.
  When I had the great privilege of chairing the Medicare Commission in 
1998, we had numerous witnesses give us their suggestions. We had the 
time to listen to the theory about what we ought to do with the 
Medicare Program. To a large extent, the groups that came before the 
commission fell into two different groups. The first group said: The 
Federal Government should do everything in this area, the Federal 
Government should run the program from top to bottom, and the private 
sector should not be involved at all because we cannot trust the 
private sector, which has a profit motive as their main goal, to be 
involved in delivering health care to our Nation's seniors. That camp, 
therefore, said the Federal Government should do everything.
  On the other hand, a second group of folks who came before the 
committee took the position: The Federal Government should not do 
anything in delivering health care. We should turn the entire program 
over to the private sector, and the private sector ought to run the 
program, deliver the health care benefits, because they can bring about 
competition, they can bring about innovation, and the Federal 
Government cannot do that. So the Federal Government should not be 
involved at all.
  We had a fundamental difference between the two camps that said the 
Federal Government should do everything and those who said the Federal 
Government should do nothing at all. The beauty of what we have today 
is that we attempt to combine the best of what the Federal Government 
can do with the best of what the private sector can do into a single 
delivery system and present that to our Nation's seniors as a vast 
improvement.
  For me, it was never an either/or choice. It was never let the 
Federal Government do everything or require them to do nothing at all, 
but, rather, to bring the two sides together. I think by doing what we 
did is why today we see so much bipartisan support for this concept.
  There were many of my Republican colleagues who had a preference for 
letting the private sector do it all and many of my Democratic 
colleagues said, no, the Federal Government should do it. But when we 
have combined the best of what both can do, we have created a system 
whereby I think we will have bipartisan support with a very large 
number of Members being able to vote for this on final passage. That in 
itself is a great victory.
  Many people thought it would never be possible. Had we taken the 
position of one or the other, it probably would have been a very 
divided vote. On the other hand, by combining the best of what both 
sides could do, we have, in fact, created a better system, both from a 
fundamental standpoint of good government, and we have also created a 
political proposition with which both sides can feel comfortable.
  What we have attempted to do--and I tried to take hundreds of pages 
of legislative language and put it all on one chart which in itself is 
a pretty difficult job--but what we have done, as my chart indicates, 
is to say that the beneficiary, of course, being our older Americans 
eligible for Medicare, starting in January, because we cannot get this 
thing started overnight, every Medicare beneficiary will be able to get 
some help and assistance on their prescription drugs under the current 
program; every beneficiary will start with a basic discount card 
available to all Medicare beneficiaries where they will be able to take 
that medical beneficiary card that is a product of the Federal Medicare 
Program to their drugstore, or to wherever they happen to purchase 
their pharmaceutical drugs, and get a basic discount which is estimated 
to be somewhere around 20 or 25 percent on the drugs that they have to 
pay for that have been prescribed to them by their medical doctor. That 
would be available to all Medicare beneficiaries starting in January.
  Also, starting in January there will be a special assistance to low-
income beneficiaries who would receive approximately a $600 subsidy in 
addition to the discount card. So we are saying all beneficiaries would 
get the discount card. They could go to the drugstore, get their 
pharmaceuticals filled, but if they are a low-income beneficiary they 
would also receive an additional subsidy of approximately $600.
  It is really interesting to note, when we talk about drugs for 
seniors--and the fact is that most seniors on average have 
approximately a little over $2,000 a year in prescription drug costs. 
It is projected to go up to a little over $3,000 by the year 2006 when 
the big program kicks in. That is what the average senior has to pay 
for drugs. Many of them currently are low-income seniors and Medicaid 
pays for all of those drugs, or many of them have bought Medigap 
insurance which covers those drugs. Many of them, like my father, have 
a drug plan from a former employer, so they cover their drugs.
  A substantial number of seniors right now have some coverage for 
prescription drugs, but it is not under the Medicare Program. It is by 
buying extra private insurance, it is by being fortunate enough to have 
a plan from their former employer that pays for their drugs, or many of 
them receive it from the Medicaid Program if they are a low-income 
beneficiary. That is certainly not good enough. Medicare should cover 
it.
  So immediately starting in 2004 through 2006, under our plan, every 
Medicare beneficiary would get the basic discount card, plus low-income 
beneficiaries would get extra assistance.
  Beginning in the year 2006--and I know my distinguished Democratic 
leader was talking about that is a long time, and 24 months is a long 
period of time, but we have to do it right. We have to set this new 
program up on a national basis. Beginning in the year 2006, every 
Medicare recipient would be able to stay right where they are today if 
they like their current Medicare Program.
  I have given some of the good things it has done, and I have also 
tried to point out where it is deficient. There are a lot of 
deficiencies. If a senior is happy with the traditional Medicare 
Program, they can stay right in the traditional fee-for-service program 
that we call the Medicare Program. They can stay in this program as 
long as they would like it. And, yes, for the first time beginning in 
that year 2006, they would also be able to stay in the traditional 
Medicare Program and get prescription drugs because we would establish 
a stand-alone drug program for everybody who stays in traditional 
Medicare.
  That stand-alone drug program would not be a Government-run and 
Government-micromanaged plan. For the first time, it would use a 
private delivery system for seniors to be able to receive 
pharmaceuticals they would receive as a Medicare beneficiary. Just like 
I get my pharmaceuticals covered under my Government health plan, 
seniors would have a private delivery system. This is not turning the 
seniors over to the mercy of the private sector. This is still a 
Government-regulated program in the sense that the Medicare officials 
and HHS would be responsible for making sure this stand-alone drug 
program for seniors is run properly; that the companies that are 
offering the plans have the financial ability to offer those drugs.
  They would utilize what we call pharmacy benefit managers to 
construct programs. Insurance companies would come in and offer the 
seniors a pharmaceutical stand-alone drug plan. The companies would 
utilize the pharmacy benefit managers to try to get the best possible 
deal they could get from the pharmaceutical manufacturers. They could 
utilize formularies; they could utilize a blend where it is possible to 
choose between brand name and generic drugs. They would be able to get 
the best possible financial deal that they could offer to the seniors 
in a drug program.
  Like I said, it would combine the best of what Government can do, 
which

[[Page 14977]]

would be to make sure it is being run properly, with the best the 
private sector could do, which is bring about competition and tough 
negotiation with the pharmaceutical companies and manufacturers in 
order to present to the senior the best possible product. The Federal 
Government would still be involved in overseeing it but not 
micromanaging it.
  For the first time they will also have another option they do not 
have now. Beginning in 2006, every senior could stay in traditional 
Medicare just like it is, but at their choice they would also have an 
opportunity to go into a new program called Medicare Advantage. 
Medicare Advantage would, in fact, be a combination Federal/private 
sector program which would deliver to every Medicare recipient who 
wants to join an integrated health plan, which would provide them 
hospital coverage, doctor coverage, and prescription drug coverage. 
They would also utilize the private sector delivery system for all of 
those areas, not just the drugs that they would get under traditional 
Medicare.
  To a great extent, their plan would be based on what we have as 
Federal employees under the Federal Employees Health Benefits Plan, 
where the Federal Government, through the Office of Personnel 
Management, sets up a benefit plan for all of us in that plan and the 
Federal Government would set the standards as to what has to be met, 
what has to be provided, and then private insurance companies would 
come in and offer that coverage like they do for all of us as Federal 
employees.
  Every year we would get a book, and the book shows us what is 
available, and we have to pick and choose. We pick the plan that is 
best for ourselves and our families. That is, in essence, what we are 
talking about in the new Medicare Advantage. Preferred provider 
organizations such as those in the Federal system would come in and 
offer different plans and different options to our Nation's seniors.
  We want to have some standards but we also want to have enough 
variations so people have a choice to pick the plan best for them.
  Our drug plan has a $275 deductible, a 50 percent copayment, and an 
approximately $35 premium. I happen to believe some variation is 
important in order for people to have a choice. Some plans may offer a 
higher deductible or should be able to offer that. We are working 
ultimately on trying to make sure there is some flexibility yet also 
some definitiveness about what, in fact, it is going to cost. That is 
important. We have achieved that appropriate and proper balance.
  Beginning in 2006, seniors will have choices of staying in 
traditional Medicare if they want. No one will force them into picking 
anything else. Younger seniors, people not quite 65, moving into the 
new program will be used to utilizing the new delivery system and will 
be comfortable with it. AARP, which represents the largest number of 
senior citizens in this country, has taken polls of their members and 
has found men and women between 55 and 65 years of age prefer these 
options and choices and feel comfortable with preferred provider 
organizations which more and more citizens in this country are in.
  Preferred providers are just that: a selection of preferred doctors 
and hospitals that can deliver these services. If you want to go 
outside of that system, you can go outside of that system, but it may 
cost you a little bit more.
  By creating these preferred provider organizations you can negotiate 
financial deals with them that help reduce costs and help reduce 
prices. There are a lot of people in the country that want us to reduce 
prices, reduce costs, but don't want us to do anything to bring about 
lower costs and better prices. They say they want cheaper drugs but do 
not want restrictions on how much and what type and where they can get 
them. We cannot do both. The same with doctors and hospitals.
  If you try to reduce prices, you have to get doctors and hospitals to 
negotiate the best price. By doing that, you may restrict to some 
degree where you might go to get those medical services. You can always 
go outside the system, but you may have to pay more for that choice 
outside the preferred provider system.
  I want to address the point some made: we have tried this experiment 
with health maintenance organizations, HMOs, and they have not worked. 
One of the reasons they have not worked is the way Congress constructed 
them and the way we reimbursed them has not been very good at all, 
causing a lot to move out. Some HMOs are doing well in some areas and 
some HMOs have gone bust in other counties.
  What we are talking about is not doing this new system on a county-
by-county basis. That was one of the big problems why HMOs did not 
work. What this bill does is create 10 geographic regions in the 
country. The preferred providers will come in and offer their services 
in a region. By creating a region, you create not just a rural area--
whether it is Wyoming, Montana, or North or South Dakota, where a lot 
of our colleagues have expressed concern this would not work--we have 
created geographic regions in the country that will combine more urban 
areas with more rural areas so you get a better blend, a better mix. 
They will be required to provide those services in the entire 
geographic region, which gives people who provide these services a 
better opportunity to try and make sure it will work. In rural 
counties, they all pulled out because there were not enough people to 
make it work. We have created 10 geographic regions around the country 
to make it much more likely this new system will, in fact, work and 
work very well.
  There will be a lot more debate and a lot more amendments. Our 
colleagues in the other body are also moving forward with this type of 
legislation today and for the next couple of weeks. I am ultimately 
comfortable that we will, in fact, be able to pass a program in this 
Congress and hopefully complete it before the 4th of July recess that 
will create a new Medicare Program for our Nation's seniors which will 
provide prescription drugs but also will provide a better delivery 
system, one that is balanced, one that combines the best of what 
government can do with the best of what the private sector can do. We 
have accomplished that.
  Can this be improved? Of course. There is nothing we do that cannot 
be improved. We are restricted to some degree by the fact we do not 
have as much money as I think is truly needed and necessary in order to 
create a program that is one that is even better than the one I have 
described. The facts are, we have $400 billion in the budget. If we had 
$500 or $600 billion or even $800 billion we could create a program 
that is much better than the one we have created. But there will be 
time to improve. We will have the opportunity to make this an even 
better program in the future. Obviously, we have to take the first 
step. This is truly the first step in 38 years that we have had the 
opportunity to take, which will bring to our Nation's seniors a better 
program we can always work to improve as time guess on.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. BREAUX. I ask unanimous consent that the order for the quorum 
call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BREAUX. I ask unanimous consent the time during this quorum call 
be equally charged.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BREAUX. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I am happy we are here today on what I

[[Page 14978]]

think is the first day of maybe 2 weeks of work in the Senate to pass a 
bill many Members thought would pass last summer but got tied up in 
some election year political maneuvering in the Senate and did not 
happen.
  We have an opportunity this year--because this bill has broad 
bipartisan support based on the vote of 15-6 out of our committee, such 
a vote gives an opportunity to bring this issue to fruition--to present 
a bill to the President of the United States yet this summer.
  Last Thursday, the Finance Committee did report out a breakthrough 
bill that would make prescription drug coverage a reality for 40 
million Medicare beneficiaries. The committee approval was of a 
sweeping package of new comprehensive prescription drug benefits and 
other program improvements that makes very good sense but also keeps 
good our commitment to our seniors.
  Since 1965, seniors have had drug insurance without prescription 
drugs. We have had health insurance without prescription drugs. By 
passing our bill last Thursday, the Finance Committee made history and 
came one step closer to changing the fact that prescription drugs were 
never a part of the Medicare Program unless they were administered in a 
hospital situation.
  How did we get to the point we are today, where it looks as if we 
have broad bipartisan support for this legislation? This important 
breakthrough came because of the tireless work of our committee 
members, both Democrat and Republican, that has been going on over the 
last 5 years, going back to the time when Senator Breaux, who just 
spoke and deserves a lot of credit for bringing us this far--and also 
Senator Frist--led the way on prescription drugs before any of us were 
paying much attention or even listening. Then Senators Snowe, Hatch, 
and Jeffords carried the torch for 2 years, working with Senator Breaux 
and this Senator from Iowa on what we called then the tripartisan bill. 
It is tripartisan instead of bipartisan because Senator Jeffords 
officially, even though he sits with the Democrats, considers himself 
not a member of that party but an independent Member of the Senate.
  The tripartisan effort, of which I was a part, was something on which 
I was proud to work but, more importantly, not just as an end in itself 
but, in hindsight, now I can say it set the stage, the foundation work, 
for where we are today on a bill that is even better than the 
tripartisan bill.
  How do you get this far? The breakthrough came because of the 
President's unyielding commitment to getting something done for seniors 
once and for all. It takes more than just the Senate, it takes more 
than just the Senate and the House, it takes the President--all three--
to bring legislation to what we call law.
  This budget that the President put forth put real money on the table 
for prescription drugs--$400 billion over 10 years. So the Finance 
Committee wasted no time in taking advantage of that $400 billion that 
was in the budget for a specific proposal of prescription drugs and 
reporting out this good bill. I am glad about that; otherwise, we would 
not be here--without this budget leeway.
  The bill we passed out of committee last Thursday night is a 
balanced, bipartisan product that flowed from good faith, from fair 
dealing, and from a commitment to consensus across party lines. So it 
is my hope that this same spirit will prevail on the floor of the 
Senate during the debate on this bill. I have no reason to believe it 
will not. I believe the debate in our committee, by both Republicans 
and Democrats, was just the type of debate you ought to have but do not 
often see in committees, particularly on very sweeping legislation, 
which is what this bill happens to be.
  I intend to do everything I can to ensure a safe and successful 
passing of this legislation. To do that, I intend to work hard to keep 
the climate on the Senate floor as reasonable and most certainly 
bipartisan as it was in our Finance Committee through the course of 
last Thursday.
  Of course, legislation of this size and scope does not make everybody 
happy. You cannot expect that it would. This bill cannot and will not 
be all things to all people. I expect to hear from many Senators about 
provisions, whether they be large provisions or smaller, less 
significant provisions in the bill, with which Members might not be 
happy. Of course, in the process of legislating, I welcome those who 
want to tell me about those with which they are happy as well. 
Sometimes we tend more toward the negative than the positive. I think 
there is a lot about this legislation--most of this legislation--that 
is very positive.
  I pledge to work with all Senators in the days ahead to address 
concerns people have in the underlying bill. But I will keep my eyes on 
that larger prize, the promise we have expressed in so many elections, 
both Republican and Democrat, to modernize and strengthen Medicare, to 
move Medicare into the practice of medicine of the 21st century. One of 
the major steps in that move to improve Medicare is providing a 
prescription drug benefit.
  If we were writing a Medicare bill for the first time and we were 
doing that in the year 2003, it would not be like 1965 when 
prescription drugs were only 1 percent of the cost of medicine. Today 
it is a much larger part of the cost of medicine and is part of keeping 
people out of hospitals. Obviously, we would write prescription drugs 
in that 2003 brandnew Medicare bill if we were writing a brand-new 
bill.
  I am keeping my eye on that larger prize. That prize is passage of a 
comprehensive prescription drug benefit that will give immediate 
assistance, starting next January, 2004, and continuing as a permanent 
part of Medicare, to every citizen in America. If I were to generalize 
about a prescription drug benefit: First, it is voluntary. People don't 
have to buy into it if they don't want. It is very comprehensive and it 
is universal.
  The bill before us puts that prize in our path. The Prescription Drug 
and Medicare Improvement Act brings Medicare, then, into the 21st 
century. The bill provides affordable prescription drug coverage on a 
voluntary basis to every senior in America. The coverage is stable. It 
is predictable. It is secure. Most important, the value of the coverage 
does not vary based on where you live and whether you have decided to 
join a private health plan. For Iowans and others in rural America who 
have too often been left behind by most Medicare private health plans, 
this is an important accomplishment that I insisted be in our bill when 
delivered to the Senate floor.
  Overall, we rely on the best of the private sector to deliver drug 
coverage, supported by the best of the public sector to secure consumer 
protections and important patient rights. This combination of public 
and private resources is what stabilizes the benefit and helps keep the 
costs down.
  Keeping costs down is essential because what I hear from the seniors 
in Iowa is not about a specific program, it is: Why are prescription 
drug costs so high? To them, so unreasonable. Keeping drug costs down 
is essential, not just for seniors but for the program as a whole.
  Across this bill we have targeted our resources very carefully, 
giving additional help to our lowest income seniors. Consistent with a 
policy of targeted policymaking, we have worked hard to keep existing 
sources of prescription drug coverage viable. Our goal, ever since we 
started on the tripartisan proposal 2 years ago, was not to replace 
private dollars with public dollars. This bill accomplishes that by 
keeping Medicare State pharmacy assistance programs and retiree health 
benefits strong. Surely any change of this magnitude will have some 
ripple effect on other sources of coverage.
  Regarding company-based benefits, our bill gives employers more 
flexibility than ever to participate fully in the new drug benefit.
  We all know about the pressures employers face in maintaining health 
care coverage under mounting cost pressures. Decisions about scaling 
back coverage or even a company dropping it altogether are bound to be 
made regardless of whether we pass this bill. In the days ahead, we 
will work to encourage employer participation in the

[[Page 14979]]

new drug benefit. But I am confident the balanced policy before us is a 
good place to start.
  I would like to speak about our fee-for-service improvements in this 
bill designated as S. 1.
  There is a very important aspect of this bill. It is called the 
Medicare Improvement Act for a reason. Beyond just prescription drugs, 
our bill is a milestone accomplishment for improving traditional 
Medicare, especially Medicare being delivered to rural America.
  Included in our bill is the best rural improvement and Medicare 
equity package that the Senate has ever seen. I insisted on including 
it in the committee mark because the most important Medicare reforms 
involved fixing outdated and bureaucratic formulas that penalize rural 
States. This package passed the Senate 86 to 12 last month on the jobs 
and growth package. But it was tabled in conference between the House 
and the Senate.
  I hope that vote is very strongly regarded today by the Senate so 
that we don't even have to deal with this discussion on the floor of 
the Senate as we did then on the tax bill.
  Because this rural health package, or Medicare equity package--
whatever you want to call it--was dropped in conference, the President 
wrote a letter shortly thereafter endorsing these same provisions. I am 
pleased to include them here today with his support.
  At this point, I ask unanimous consent to have printed in the Record 
the President's letter.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                              The White House,

                                         Washington, May 22, 2003.
     Senator Charles Grassley,
     Committee on Finance,
     U.S. Senate, Washington, DC.
       Dear Chairman Grassley: I want to congratulate you on 
     Senate passage of the jobs and growth bill, and also on the 
     passage of your amendment to that bill which increased 
     federal assistance to rural providers through the Medicare 
     program.
       When we met in the Oval Office in early April, we discussed 
     our concerns that rural Medicare providers need additional 
     help, and we committed to addressing their problems. We 
     agreed on the need to address issues faced by rural 
     hospitals, skilled nursing facilities, home health agencies, 
     and physicians.
       You demonstrated your commitment by passing your amendment 
     last week with tremendous bipartisan support, and by pushing 
     hard for it in the conference negotiations on the jobs and 
     growth bill.
       I will support the increased Medicare funding for rural 
     providers contained in your amendment as a part of a bill 
     that implements our shared goal for Medicare reform.
           Sincerely,
                                                   George W. Bush.

  Mr. GRASSLEY. Mr. President, I thought I would read at least the last 
paragraph by President George Bush.

       I will support the increased Medicare funding for rural 
     providers contained in your amendment--

  Meaning the Grassley amendment--

     as a part of a bill that implements our shared goal for 
     Medicare reform.

  What the President is talking about in this letter is just exactly 
what we have before the Senate--the same amendment included in this 
prescription drug bill on rural equity that passed the Senate 86 to 12 
a month ago.
  We have the prescription drug bill and the Medicare reform bill 
before us. These two are married up at a point that the President's 
letter refers to.
  I want people to know that including this is something I discussed 
with the President on at least two occasions before his May 22 letter 
to me. One time in early December when the President asked me to come 
to the White House to discuss early on the process for moving this 
legislation along, I had an opportunity to remind him at that 
particular point about the speech he gave in August 2002 in Davenport, 
IA, during a political event at which he appeared for Congressman 
Nussle of Iowa. The President rightly complimented Congressman Nussle 
for leading efforts in the other body to help rural equity. I reminded 
the President that the short reference he gave in his otherwise long 
speech was used by Congressman Nussle in his TV ads in eastern Iowa 
during last fall's election. I wanted the President to be reminded that 
all Iowa heard him--not just a few Republicans at the Nussle campaign 
event in August--but all Iowans heard him throughout the fall campaign 
with parts of his speech being reproduced on this campaign ad.
  I also had an opportunity early in April to talk to the President 
when the President once again visited with me about provisions of the 
prescription drug bill. He makes reference to that in the second 
paragraph of the letter. He said:

       When we met in the Oval Office in early April, we discussed 
     our concerns that rural Medicare providers needed additional 
     help, and we committed to addressing their problems. We 
     agreed on the need to address issues faced by rural 
     hospitals, skilled nursing facilities, home health agencies, 
     and physicians.

  The President is well aware of his communicating this directly to the 
people of Iowa even before I had my discussions with the President on 
these issues. I am glad the President is committed to fulfilling his 
statement to the people of Iowa that he made last summer.
  This rural health care safety net is otherwise coming apart. That is 
why this rural equity issue is so important. The bill before the Senate 
begins to mend it. The hospitals and home health agencies in rural 
America lose money on every Medicare patient they see. Rural physicians 
are penalized by bureaucratic formulas that reduce payments below those 
of their urban counterparts for the very same service. Our bill takes 
historic steps toward correcting geographic disparities that penalize 
rural health care providers. I will summarize some of these.
  On hospitals, we eliminate the disparity between large urban 
hospitals and small urban hospitals, as well as rural hospitals, by 
equalizing the inpatient-based payment. The hospitals in my State and 
other rural areas are paid 1.06 percent less on every discharge. That 
is a $14 million loss every year just for my State. It is time to make 
this change permanent.
  We also revised the labor share of the wage index in the inpatient 
hospitals. The wage index calculation kills our hospitals in rural 
areas. They have to compete with larger hospitals in bigger cities for 
the same small pool of nurses and physicians. But because of the 
inequities in the wage index, they aren't able to offer the kinds of 
salaries and benefits that attract health care workers in cities.
  Our bill begins adjusting the labor-related share downward to correct 
these inequities. We strengthen and improve the Critical Access 
Hospital Program which has been so successful in keeping open the doors 
of some of our most remote hospitals.
  I think in my State of Iowa, almost a third of our hospitals have 
changed to what we call ``critical access hospitals.''
  Also, in this bill, we create a low-volume adjustment for those 
critical access hospitals and for other rural hospitals that aren't 
able to qualify for the Critical Access Hospital Program.
  These hospital corrections are not partisan rhetoric. They are 
supported by the nonpartisan Medicare Payment Advisory Commission, by 
the Center for Medicare Systems Administrator--and he did that in a 
recent letter to the House Ways and Means Committee--and also by 31 
bipartisan members of the Senate Rural Health Caucus.
  For doctors, our bill removes a penalty which Medicare imposes on 
those who choose to practice in rural States. Medicare adjusts payments 
to doctors downward based on just where they live. We believe the value 
of the physician service is the same regardless of where that doctor 
may live. Medicare doesn't recognize that. Our bill begins to change 
that.
  Our bill also provides assistance to other rural health care 
providers such as ambulance services, and home health agencies which 
millions of seniors in rural areas rely on every day.
  Providers in rural States such as Iowa practice some of the lowest 
cost, highest quality medicine in the country. This is widely 
understood by researchers, academics, and citizens of those States, but 
it surely isn't recognized by Medicare. Medicare, instead, rewards 
providers in high-cost, inefficient States with bigger payments that 
have the perverse effect of

[[Page 14980]]

incentivizing overutilization of services and, in the end, giving poor 
quality.
  These policies are paid for, not by taking resources away from the 
prescription drug package or by taking money away from those high-cost 
States but by other modifications to the Medicare Program that makes 
just plain, good policy sense.
  These rural health care provisions are a fair and balanced approach 
to improving equity in rural America. My colleagues on the Finance 
Committee--a lot of them from these same rural States--recognize that. 
And I think on this vote we had a month ago I can say that the full 
Senate recognizes that.
  I would speak last about the Medicare Advantage or the preferred 
provider organization parts of our legislation. Because beyond 
prescription drugs, and beyond the issue of rural health care, our bill 
goes to great lengths to make better benefits and more choices 
available for our seniors. In fact, one of the things that has been a 
focal point of this legislation over the 2 or more years we have 
adopted it has been to give seniors the right to choose.
  Mr. President, I see that you are rapping the gavel. Can you tell me 
what that is all about?
  The PRESIDING OFFICER. The Senator's time has expired. The time until 
12:30 is equally divided.
  Mr. GRASSLEY. Could I ask, since there are not other people here, 
maybe for 3 more minutes?
  Mr. BREAUX. Mr. President, I would respond, Senator Dorgan wants 15 
minutes, and then that is it.
  Mr. GRASSLEY. I will put the rest of my statement in the Record.
  Mr. BREAUX. It may work out. How much time do we have, I ask the 
Chair?
  The PRESIDING OFFICER. Thirty-seven and a half minutes.
  Mr. BREAUX. That is fine. Go ahead.
  Mr. GRASSLEY. Well, the Senator from North Dakota is here.
  Mr. BREAUX. I say to the Senator from North Dakota, the Senator wants 
to complete his statement.
  Mr. GRASSLEY. Two more minutes?
  Mr. BREAUX. Two more minutes.
  The PRESIDING OFFICER. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, we want to give seniors the right to 
choose in as many areas as we can. That is why I use the word 
``voluntary.'' And that is why I use the phrase ``the right to choose 
what they might consider better Medicare programs than traditional.''
  Our bill specifically authorizes provider organizations to 
participate in Medicare. The idea is these kinds of lightly managed 
care plans more closely resemble the kinds of plans that we choose for 
the Federal Government and which close to 50 percent of working 
Americans have today but only 13 percent of the people in Medicare have 
that today.
  Preferred provider organizations have the advantage of offering the 
same benefit of traditional Medicare, including prescription drugs, but 
on an integrated, coordinated basis. This bill creates new 
opportunities for chronic disease management and access to innovative 
new therapies.
  PPOs might not be right for everyone. We are going to let seniors 
make that choice. Our bill sets up a playing field for preferred 
provider organizations to compete for beneficiaries. We believe PPOs 
can be competitive and offer stronger, more enhanced benefits.
  In the days ahead, I will be working with colleagues on both sides of 
the aisle to ensure that we set up the right system, one that is truly 
competitive and viable for these preferred provider organizations. No 
senior has to choose this new program. Our prevailing policy has been, 
and always will be, one that lets seniors keep what they have if they 
like it with no changes. All the seniors, regardless of whether they 
choose a PPO or not, can still get prescription drugs.
  We have 2 long weeks ahead of us. My commitment is to stay here until 
the lights go out to ensure that we pass a balanced bipartisan bill.
  I thank my colleagues on the Senate Finance Committee for their fine 
work to get us this far.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. BREAUX. Mr. President, I yield 15 minutes to the distinguished 
Senator from North Dakota.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, before Senator Grassley leaves the floor, 
I want to tell him that one piece of this legislation that I think is 
particularly important are the provisions dealing with Medicare 
reimbursement for rural hospitals and other rural health care 
providers. I know he talked about how this Senate has dealt with this 
concern before, and we have. In fact, we had a very strong vote on it. 
But at this point, significant legislation has not been signed into 
law.
  The fact is, his constituents in Iowa and mine in North Dakota pay 
the same payroll tax out of our paychecks as everybody else in the 
country, except we do not get the same reimbursement for much of what 
our providers do. And the result is, some very important health care 
facilities in smaller rural States, in smaller communities, are 
struggling and having an awfully difficult time making it because the 
provider reimbursement system is not fair.
  I want to compliment my colleague from Iowa and others who have 
worked on this. I have been pleased to work on it some, but his 
leadership is very important in this area. That is one piece of this 
legislation to which I think we need to pay some attention. I will be 
pleased when the President signs a bill that includes these provisions, 
and so will many of our rural health care providers who have waited a 
long while for it.
  Having said that, let me make a couple of comments about the broader 
piece of legislation and why we are here.
  I think Medicare has been an excellent program for this country. 
Prior to the creation of the Medicare program, over one-half of the 
senior citizens in America had no health insurance coverage. They 
reached their retirement years--having worked all their lives, in most 
cases--and discovered that when they were in their sixties, seventies, 
and eighties there was not a traffic jam of insurance agents or 
insurance companies wanting to see if they could fully cover their 
health insurance needs once they have reached 70 and 80 years of age.
  What they discovered was that at that age the cost of a health 
insurance policy was almost prohibitive. The result, back in the early 
1960s, is that over half of the senior citizens in our country had no 
health insurance coverage at all. So the Congress passed a Medicare 
program, which has been a remarkably successful program.
  The Medicare program has meant that now 99 percent of America's 
senior citizens are covered under Medicare. They do not have to live 
with the fear of not having some basic health care coverage when they 
reach retirement age. When they reach their declining income years, 
Medicare is there.
  It has been there, and will be there. It has been a remarkably 
successful program.
  Some say: But there have been financing problems with Medicare. Yes, 
that is true, and they are all borne of success. By that I mean people 
are living longer and better lives. As a result of that, there have 
been some financing issues and some financing difficulties with 
Medicare. We would not have any financing issues at all if we just went 
back to the old life expectancy, but people are living longer, better, 
more productive lives. The result is that we continue to talk about how 
we finance Medicare.
  An example of that: My brother was telling me about a friend of his a 
while back who, at age 89, bought a new car. She, at 89 years old, 
bought a new car. He said she financed it with a 5-year loan. I guess 
that is optimism. But what a wonderful thing, an 89-year-old person 
buying a new car and getting a 5-year loan.
  There was a story in the North Dakota papers some long while ago 
about a man who was 99 years old and still farming. They had a picture 
of this old 99-year-old codger. He was getting on

[[Page 14981]]

his tractor. And the article talked about his son. His son was in the 
Army during the Second World War, and he came back and decided he would 
work with his dad until his dad retired. The son was about 74 years 
old, and his dad was 99 years old, and still farming. It did not work 
out the way the son thought. The story was about this 99-year-old still 
driving a tractor.
  I have often mentioned my uncle who is in his early eighties. I 
believe he is 81 or 82 years old now. He discovered in his early 
seventies that he was a runner. He ran faster than most people his age. 
He started entering the Senior Olympics. My uncle runs the 400 and the 
800 meter. He now has 43 gold medals. He has been running in California 
and Arizona and Minnesota. My aunt thinks he is about half goofy for an 
80-year-old.
  What a wonderful thing: An 89-year-old buying a car; a 99-year-old 
still farming; an 81-year-old running in the 400 and the 800 races in 
the Senior Olympics. People are living longer. That is a good thing.
  However, Medicare, as it was developed in the 1960s, is basically for 
acute care or hospital care. If you get sick, you go to a hospital, and 
they help you. The medical model has changed dramatically since then 
and so must Medicare. That is what brings us to the Senate floor. We 
recognize that the prescription drugs now available that keep people 
out of the hospital, that allow them to control some of their health 
conditions and continue to lead productive lives, were not available in 
the early 1960s when Medicare was developed.
  We come to the floor with a proposal that says: Over 30 years has 
elapsed since the writing of the Medicare program. It is now time to 
put a prescription drug benefit in the program.
  Let me describe what that means in my State. We have 103,000 people 
who are on Medicare in the State of North Dakota. North Dakota is a 
relatively small State in terms of its population. It is large 
geographically, 10 times the size of Massachusetts in land mass, but it 
has only 645,000 people. We have 103,000 on Medicare. The people who 
are on the Medicare program paid payroll taxes all of their working 
lives, beginning back in the mid 1960s, and that money is what provides 
the capability of their being able to access the Medicare program.
  Senior citizens, although they are 12 percent of America's 
population, consume one-third of all the prescription drugs in this 
country. It is probably pretty obvious to anyone who has been around 
senior citizens that they often take multiple prescription drugs. It is 
not unusual to talk to a senior citizen who takes 5 and in some cases 
10, 12, or more different prescription drugs every day. The fact is, 
many of them simply cannot afford to pay for these drugs. Many of them 
do not have prescription drug coverage through any kind of insurance 
plan. Because of that need, because so many of them can't afford their 
medicines, we propose giving Medicare beneficiaries a prescription drug 
benefit.
  A woman came up to me at the end of a town meeting in northern North 
Dakota one day. She was perhaps in her late 70s or early 80s. She 
grabbed me by the elbow and said: Mr. Senator, I want to talk to you a 
moment. My doctor tells me that I must take a range of prescription 
drugs to control diabetes and heart trouble. The problem is, I can't 
afford to take them and can't afford to buy them. Can you help me?
  As she began talking about it, her eyes welled up with tears. This 
woman, perhaps 80 years old, was stranded. The doctor said: You have 
serious health problems, diabetes, heart trouble, and more. Here is 
what you have to take. These prescription drugs will control your 
health issues.
  She said: I don't have the money.
  A widow, living on a small Social Security payment, she does not have 
the capability of going in to a pharmacy and paying the very high cost 
for prescription drugs.
  Let me say there are some things that have happened we should 
mention. I know the pharmaceutical industry sometimes takes a look at 
me and thinks I am always on the floor trying to put downward pressure 
on prescription drug prices. That is true. It is because I believe so 
strongly that we need to make sure that miracle drugs can provide 
miracles for those who need them. Miracle drugs cannot provide miracles 
for those who cannot afford them.
  I want to say this about the industry. First, a number of 
pharmaceutical industry companies have stepped up to the plate since we 
last debated this subject. They offer programs to provide some free 
medicine to low-income patients and medicine discount cards for 
Medicare beneficiaries who don't have drug coverage. In 2002, we are 
told, the American pharmaceutical companies provided free medicine to 
5.5 million patients. There are several programs of this type. Pfizer, 
Eli Lilly, and many others have these programs.
  We ought to recognize that is a good thing. We ought to say to them: 
Good job. Frankly, that is a positive step. But these programs are no 
substitute for offering a prescription drug benefit to all Medicare 
beneficiaries. The pharmaceutical companies, although I have 
significant disagreements with them about pricing issues, ought to be 
commended for stepping forward and providing some approaches to help 
those very low-income seniors who have no recourse, no other 
alternatives. They have helped 5.5 million patients in the United 
States. But that is not a substitute for offering this legislation to 
put a prescription drug benefit in the Medicare program.
  We are going to offer some amendments to the bill before us. I will 
offer an amendment or two. Some of my colleagues will offer amendments 
in the coming week and a half with the expectation that by the end of 
next week the Senate will finish its work on this bill. We will have 
passed legislation that for the first time since the early 1960s, when 
Medicare was created, will substantially improve the capability of 
Medicare to maintain the good health of senior citizens by adding a 
prescription drug benefit.
  There are some weaknesses in the legislation that came out of the 
Finance Committee. My hope is we can address them and improve them. The 
legislation that came out of committee has a coverage gap that is 
pretty difficult. We need to fix that. There are periods where, even 
though beneficiaries will be paying premiums, their purchases of 
prescription drugs will not be covered. Those periods are, of course, 
first with the deductible. For the first $275 in drug expenses there 
would be no coverage. And then in addition, when seniors reach $4,500 
in drug spending, their prescription drug coverage stops. Then 
catastrophic coverage will kick in when their drug spending reaches 
$5,800. During that $1,300 stretch between $4,500 and $5,800 in 
expenses, there will be no coverage at all. So senior citizens will be 
paying premiums during those months but have no coverage for the 
prescription drugs they are purchasing. That coverage gap needs to be 
fixed.
  The legislation has no defined benefit or premium. We need to fix 
that if we can. We don't know what kind of charges would be set by the 
insurance companies, what the actual premium would be, exactly how 
would they define the benefits, and would they change or differ from 
region to region. I am particularly concerned that rural Medicare 
beneficiaries, those in smaller States, will be charged higher premiums 
than urban beneficiaries. We need to be very careful about that. I hope 
we can address some of it in amendments.
  Reducing drug costs is another issue. Having just complimented the 
pharmaceutical industry, let me also say I believe we ought to pass the 
generic legislation that will tend to put some downward pressure on 
prescription drug expenditures. I also believe we ought to, as do some 
of my colleagues who have worked with me, have the global market system 
work for prescription drug consumers. The way the system could work, 
not just for Medicare but for all prescription drug consumers, is to 
allow those consumers to purchase the identical drug put in the same 
bottle made by the same manufacturing company from Canada, provided 
that you have a safe chain of custody. In Canada, the same medicines

[[Page 14982]]

that are available in the United States are sold for a fraction of the 
price.
  A pharmacist in Pembina, ND, is prohibited from going to Emerson, 
Canada 5 miles north and buying a prescription drug such as Tamoxifen 
for a fraction of the price. That pharmacist cannot now bring that 
Tamoxifen back and pass the savings along to a woman who has breast 
cancer in Pembina, ND.
  I frankly think they should be allowed to do that. That is another 
way by which we can put downward pressure on prescription drug prices.
  Well, those are some of the issues we are going to be dealing with 
this week.
  Again, my fervent hope is at the end of this process we will, with a 
bipartisan piece of legislation, get the best of what all have to offer 
in this Chamber. We so often see legislation come to the floor of the 
Senate that has a pretty significant partisan split, and we often end 
up getting the worst of what can be provided rather than the best.
  I hope in this legislation on the issue of prescription drugs and 
Medicare we all recognize a couple of points. One, it is long past time 
to do this. Were we to create the Medicare Program today, there is no 
question but that it would have a prescription drug benefit in it. Most 
of the lifesaving prescription drugs have become available since 
Medicare was originally written. That is No. 1. I think we are at that 
point where virtually everybody in this Chamber understands we ought to 
do this, and we ought to do it now.
  The second and most important issue is we ought to do it right. There 
is a right way and a wrong way to do this.
  First of all, the benefit ought to be reasonably simple, 
understandable, affordable, and provide significant benefits to the 
senior citizens of the country who need prescription drugs. That means 
simplifying this bill, trying to solve the coverage gap, and trying to 
put some downward pressure on prices.
  I yield the floor.
  Mr. BREAUX. Mr. President, I yield to the Senator from Vermont 10 
minutes.
  The PRESIDING OFFICER. The Senator from Vermont is recognized for 10 
minutes.
  Mr. JEFFORDS. Mr. President, it is not hyperbole to start by saying 
that we are engaging in a truly historic Medicare debate--one that has 
the potential to rival the 1965 creation of the Medicare Program. Over 
the next 2 weeks, we will have the opportunity to consider and enact 
the most significant Medicare modernization in 37 years. We have the 
chance to do more for the health care and well-being of our Nation's 
elderly than has been accomplished through any recent Medicare 
legislation.
  I commend Senator Grassley and Senator Baucus for their work in 
bringing this measure to the Senate floor.
  The Prescription Drug and Medicare Improvement Act is a landmark 
improvement to the Medicare Program and our colleagues deserve a great 
deal of credit for reaching this bipartisan agreement--I would say 
tripartisan.
  This is a large and complex bill--measuring over 600 pages. It is not 
at all unusual for a proposal of that size to have issues remaining and 
I know there are some of our colleagues for whom these issues need to 
be debated and addressed. So we should not be Pollyanna about the 
outcome. Work remains to be done.
  But I have been listening to our colleagues as they have come to the 
floor to discuss this bill and I am encouraged by the largely positive 
tone of their remarks. I am encouraged because this year I sense a 
cautious optimism among our colleagues that this Congress--this year--
we will be successful.
  As our colleagues know, I have been working on various efforts to 
modernize Medicare and to provide a prescription drug relief for our 
elders for many years. Most recently, I had the pleasure and honor to 
work with several of our colleagues on what came to be known as the 
tripartisan bill. I joined with Senator Grassley, Senator Breaux, 
Senator Snowe, and Senator Hatch in a 2-year effort at drafting a 
compromise measure that we felt could gain a majority of votes in the 
Senate.
  It was a true pleasure working with my friends in the tripartisan 
group and although we were not ultimately successful last year, I am 
convinced that much of our effort then has contributed to the bill we 
are debating now. So it is with a great deal of satisfaction that I am 
here to speak in favor of S. 1, the Grassley-Baucus, Prescription Drug 
and Medicare Improvement Act of 2003.
  S. 1 provides for a comprehensive, universal and affordable 
prescription drug benefit under Medicare. It also pioneers new 
arrangements with private sector-based health plans that promise to 
integrate traditional medical care with innovations in the areas of 
disease prevention and chronic disease management.
  The drug benefit, in particular though, meets four principles that 
have guided me throughout this effort. First, this program provides a 
universal benefit; it is available to all Medicare beneficiaries. While 
I believe it is critical to provide a benefit to the poor and those 
with catastrophic costs, all seniors, regardless of income, will 
benefit from this plan.
  Second, this program is comprehensive. Beneficiaries will have access 
to the best medicines, and will not be limited to only the cheapest 
ones for the sake of saving money.
  Third, this Medicare drug benefit is affordable--for both 
beneficiaries and the Government.
  Finally, for a drug benefit to be truly successful it must be 
sustainable. It will do little good to repeat the catastrophic failure 
of years past by beginning a program that we cannot carry on.
  This program, which combines seniors' contributions with a Government 
guarantee, will have the best chance of enduring into the future.
  I believe this bill meets these four standards. It is universal, 
comprehensive, affordable, and sustainable.
  Could it be improved? Probably. And that is why we will debate and 
possibly amend it this week. But this approach is a good compromise. It 
offers a respectable and responsible plan within the budget limitations 
we face. It is a good compromise. I support this bill and urge the 
Members here to support it as well.
  In closing, I also thank several of our other colleagues who 
contributed so much to this effort. I think again, that the work of our 
tripartisan group from last year did much to pave the way to today's 
bill--so I thank my colleagues for letting me join with them in seeking 
a tripartisan solution.
  Again, I thank Senators Grassley, my friend of over 28 years. We have 
worked on this issue and many others in the past. I think this will be 
one of our proudest achievements.
  Also, this bill would not have the balance that it does without the 
contributions of other members including Senators Baucus, Daschle, 
Graham, and Rockefeller of the Finance Committee and of Senator 
Kennedy's efforts to bridge the divides where they existed.
  As I close for today, I would like to mention that the measure we are 
debating this week contains many more significant provisions than just 
those related to prescription drugs. So I will look forward to 
returning to the Senate floor at a later time to discuss those 
provisions with our colleagues.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Mr. BREAUX. I yield the remaining time we have to the Senator from 
Michigan.
  The PRESIDING OFFICER. The Senator from Michigan is recognized for 12 
minutes.
  Ms. STABENOW. Mr. President, I thank my colleague from Louisiana, who 
I know has spent years focusing on the issue of health care and 
Medicare prescription drug coverage.
  First, while I present an opposing view in terms of some of what is 
discussed here, I share the commitment and desire of all of us to do 
what is right in terms of the seniors and those with disabilities who 
are on Medicare who have waited for too long for us to come together 
and act as a body, along with the President.
  I will start by commending my colleagues on both sides of the aisle 
who have been diligently working through a

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number of issues and a number of obstacles to come up with an approach 
they believe is the best approach or the most doable approach right now 
before the Congress. Certainly, Senator Grassley, Senator Baucus, 
Senator Breaux, Senator Jeffords, who just spoke, Senator Snowe, and 
many others have been involved in these discussions.
  As one who has spent a tremendous amount of time myself focusing on 
Medicare and the need for updating and strengthening Medicare to cover 
prescription drugs, I commend them for their desire and concern and 
hard work in coming to this point. I do not believe we are doing all we 
can do and should do as a country or as a Congress for our seniors 
under Medicare.
  I do believe Medicare has been a great American success story since 
1965. I agree that it needs to be modernized, and not just prescription 
drugs but I agree with the Secretary of Health and Human Services who 
focuses on prevention. I commend him for his efforts and agree with him 
that we need to modernize Medicare to focus more on prevention and 
other options that can streamline the system and make it more 
efficient.
  I do not believe, however, that we save dollars or create a more 
efficient system by turning over prescription drug coverage to private 
insurance companies. At the appropriate point, I will be offering an 
amendment that will give true choice to seniors by allowing them to 
choose a private sector option but to also be able to remain in 
traditional Medicare and get the help they need if that is their 
choice. If we are truly talking about choice, I believe the choice 
should be with the senior.
  This really is a question of whom we are designing the system for, 
whether we are designing it for the insurance companies, for the 
pharmaceutical companies, or for the people who are covered under this 
system. I am concerned that we can do a better job for our seniors if, 
in fact, we offer them a true range of choices.
  I find it interesting at a time when I am back home in Michigan 
talking to the big three automakers or small businesses or others who 
are struggling with insurance premiums in the private sector, the 
premiums are skyrocketing. The average small business has seen its 
health insurance premiums double in the last 5 years. The automakers 
and other manufacturers in my State have seen their premiums go up 20 
to 30 percent a year, forcing them to freeze pay increases for 
employees, asking them to pay a larger share of the cost, cutting 
salaries or, in some cases, people losing their jobs because their 
business cannot afford to maintain the skyrocketing premium increases 
in the private sector.
  Given that fact, I find it ironic that we are suggesting we would 
save dollars by going to a private for-profit insurance model where, in 
fact, the premiums have been rising two or three times faster than 
those under Medicare; that when we look at the administrative cost 
difference, it is less under Medicare. When we look at the current 
choices we have between Medicare+Choice, which is Medicare HMOs, or 
traditional Medicare, we hear that studies have shown that to provide 
the same service through the HMO, on average, costs 13.2 percent more 
than if it were provided through traditional Medicare.
  So I question, as we have precious few dollars to work with to be 
able to provide the services and the care for which our seniors are 
asking, the wisdom of moving to a model that is rising in cost faster 
than Medicare. I have not seen evidence where, in fact, it will provide 
the kind of competition to lower the prices, which we are all looking 
for from the private sector at this time. In fact, what I am hearing 
from the business community is they want us to partner more with them, 
the public sector and the private sector. Because we now have our 
global economy and businesses competing around the world and because we 
are the only employer-based health insurance system among the 
industrialized countries, they find themselves at a competitive 
disadvantage and are asking to partner with the private sector to both 
contain costs and be able to help them compete and continue to be able 
to provide insurance coverage.
  So in light of all of these discussions that are going on, we look at 
Medicare, which is the one piece of a health system that Congress in 
its wisdom back in 1965, along with the President, said we are going to 
make sure is available, universal, once one is 65 or if they are 
disabled, regardless of where they live; if they are in the Upper 
Peninsula of Michigan, Detroit, or in Benton Harbor, they know they 
will be able to have insurance coverage, be able to choose their own 
doctor, be able to get the care they need. They know what it costs. 
They can count on it. That is the miracle. That is the reason so many 
seniors overwhelmingly choose traditional Medicare rather than other 
private sector options.
  So we come to the difficult choice now of how to provide prescription 
drug coverage, and there is a difference of view certainly about 
whether we should strengthen traditional Medicare or provide 
incentives, encouragement, a carrot stick--whatever one wishes to call 
it--for those to go into managed care. I commend my colleagues for 
attempting to find that balance in the middle. I believe the balance 
really is not struck unless we make sure that traditional Medicare is 
part of that choice.
  I also am very concerned that we hear constantly that, in fact, we 
have a situation where we can only afford to go a part of the way. It 
is my understanding, when all is said and done, we are talking about 
providing most seniors--certainly middle-income seniors--with 20 or 25 
percent to help with their drug bill over time. I do commend the 
structure for low-income seniors, but overall we know we are not 
providing a comprehensive prescription drug benefit with the dollars 
involved. It is half of what it would take to provide the same coverage 
we have as Senators through Blue Cross and Blue Shield under the 
Federal employee health system. So we certainly are not providing what 
we, other Federal employees, receive for a comprehensive benefit.
  I have often heard, well, we cannot afford to do that. I feel it 
necessary to indicate for the record one more time why it is we are 
talking about a system that is not comprehensive, will end for several 
months of the year for seniors, will not provide them what they need, 
and is complicated and convoluted, I believe, and that is because of 
another set of policies that were debated in this Congress not long 
ago, coupled with what happened in 2001, and that is the question of 
making a determination, a value judgment, that it is a bigger priority 
to provide tax cuts for the wealthiest, the privileged few of our 
country, rather than helping the many of our seniors and the disabled 
to be able to put money in their pockets through prescription drug 
coverage.
  It is astounding to look at what that decision has done. We are told 
that the 2001 tax cuts made permanent and the other proposals passed 
over the next 75 years will, in fact, cost $14.2 trillion, where the 
projected Medicare and Social Security deficit combined--not just 
Medicare but Medicare and Social Security deficit--is $10 trillion.
  This has been a conscious choice to make a decision to spend dollars 
in one way to help a few people in our country rather than to keep the 
commitment of Social Security and Medicare that we have had for many 
decades in our country. The fact that we are talking about an 
inadequate benefit that ends, that leaves coverage gaps of 3 or 4 
months a year for our seniors, the fact that we are talking about an 
approach that does not do what they have asked us to do, is because of 
decisions made to take revenue and instead of investing it in health 
care for older Americans, instead of investing it in strengthening 
Social Security for the next generation, the decision was made to 
eliminate that revenue.
  By the way, that decision has resulted this year in the highest 
single-year deficit in the history of our country. Unfortunately, a 
hole has been dug. I fear it will continue to be dug deeper and deeper 
with the decisions that will be made.
  It is not too late to decide in this debate we will do it right--real 
choice, a

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real benefit--that we make decisions that are best for the majority of 
the people we represent. They are counting on us to do this right.

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