[Congressional Record (Bound Edition), Volume 149 (2003), Part 12]
[Senate]
[Pages 16685-16709]
[From the U.S. Government Publishing Office, www.gpo.gov]




   PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT ACT OF 2003--Continued

  Mr. BAUCUS. Mr. President, will the Chair state the regular order?
  The PRESIDENT pro tempore. The pending amendment numbered 1060, as 
modified is the regular order.
  Mr. BAUCUS. Mr. President, is that the Nickles-Feinstein amendment?
  The PRESIDENT pro tempore. It is.
  Mr. BAUCUS. Mr. President, I move to table the Nickles-Feinstein 
amendment, and I ask for the yeas and nays.
  The PRESIDENT pro tempore. Is there a sufficient second?
  There is a sufficient second.
  The question is on agreeing to the motion. The clerk will call the 
roll.
  The legislative clerk called the roll.
  Mr. McCONNELL. I announce that the Senator from Oklahoma (Mr. Inhofe) 
is necessarily absent.
  Mr. REID. I announce that the Senator from Massachusetts (Mr. Kerry) 
and the Senator from Connecticut (Mr. Lieberman) are necessarily 
absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``yea.''
  The PRESIDENT pro tempore. Are there any other Senators in the 
Chamber desiring to vote?
  The result was announced--yeas 38, nays 59, as follows:

                      [Rollcall Vote No. 261 Leg.]

                                YEAS--38

     Akaka
     Baucus
     Bayh
     Bingaman
     Boxer
     Breaux
     Byrd
     Cantwell
     Clinton
     Corzine
     Daschle
     Dorgan
     Durbin
     Edwards
     Grassley

[[Page 16686]]


     Harkin
     Hollings
     Inouye
     Johnson
     Kennedy
     Lautenberg
     Leahy
     Levin
     Lincoln
     Mikulski
     Miller
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Specter
     Stabenow

                                NAYS--59

     Alexander
     Allard
     Allen
     Bennett
     Biden
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Carper
     Chafee
     Chambliss
     Cochran
     Coleman
     Collins
     Conrad
     Cornyn
     Craig
     Crapo
     Dayton
     DeWine
     Dodd
     Dole
     Domenici
     Ensign
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Graham (FL)
     Graham (SC)
     Gregg
     Hagel
     Hatch
     Hutchison
     Jeffords
     Kohl
     Kyl
     Landrieu
     Lott
     Lugar
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith
     Stevens
     Sununu
     Talent
     Thomas
     Voinovich
     Warner
     Wyden

                             NOT VOTING--3

     Inhofe
     Kerry
     Lieberman
  The motion was rejected.
  Mr. BAUCUS. Mr. President, I suggest the absence of a quorum.
  The PRESIDENT pro tempore. 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 PRESIDENT pro tempore. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, what is the business before the Senate?
  The PRESIDENT pro tempore. Amendment No. 1060, as modified.
  Mr. GRASSLEY. I urge adoption of the amendment.
  The PRESIDENT pro tempore. Is there further debate?
  Mr. BAUCUS. Mr. President, will the Chair identify the sponsors of 
that amendment?
  The PRESIDENT pro tempore. Senator Baucus for Senator Feinstein, 
amendment No. 1060, Part B premium, subtitle (d).
  Mr. BAUCUS. Mr. President, the Senate is ready to vote.
  The PRESIDENT pro tempore. The question is on agreeing to the 
amendment.
  The amendment (No. 1060), as modified, was rejected.
  Mr. BAUCUS. I move to reconsider the vote.
  Mr. REID. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDENT pro tempore. The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I have a unanimous consent request to 
correct a previous unanimous consent request. In a previous unanimous 
consent request, I referred to amendment No. 990 when I meant to refer 
to the previously adopted Murray amendment No. 961.
  I ask unanimous consent to make that change.
  I referred to the Kyl amendment No. 1128 when I meant to refer to Kyl 
amendment No. 1121.
  I also ask unanimous consent to make that change.
  The PRESIDENT pro tempore. Is there objection? Without objection, it 
is so ordered.
  Mr. BAUCUS. Mr. President, I suggest the absence of a quorum.
  The PRESIDENT pro tempore. 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 PRESIDENT pro tempore. Without objection, it is so ordered.


                           Amendment No. 1133

  Mr. GRASSLEY. Mr. President, I send an amendment to the desk.
  The PRESIDENT pro tempore. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Iowa [Mr. Grassley] proposes an amendment 
     numbered 1133.

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  (The amendment, No. 1133, is printed in today's Record under 
``Amendments Submitted.'')
  Mr. GRASSLEY. Mr. President, is there no discussion necessary on the 
amendment?
  The PRESIDENT pro tempore. Who seeks recognition?
  The Senator from Texas.
  Mrs. HUTCHISON. Mr. President, I would just like to say that we have 
help for our teaching hospitals in the managers' amendment. It is not 
much. But I am working with all of the managers, the ranking member as 
well as the chairman, to try to increase funding for teaching 
hospitals.
  I want to point out our teaching hospitals must have the support that 
is in this bill at a higher percentage if we are going to keep the 
young physicians trained and if our country will keep the greatest 
health care system in the world.
  I thank the managers for helping me put that in the managers' 
amendment.
  The PRESIDENT pro tempore. The Senator from Pennsylvania.
  Mr. SANTORUM. Mr. President, I oppose the managers' amendment because 
of an amendment that is in the managers' amendment, the Corzine 
amendment which provides three States the opportunity to basically opt 
out of the Medicare Program for prescription drugs and have an 
entitlement flow of funding going to the States for the States to 
develop their own stand-alone drug benefit. As a result of that, States 
like mine and two others will not have the advantage of an integrated 
drug benefit which I fought very strongly for on this floor and which I 
believe will also lead potentially to this unlimited entitlement flow 
of funds to the States because of the way this language is drafted, the 
potential for lots of mischief in respect to double dipping, inter-
government transfers, disproportionate share payments. We could be 
opening a virtual Pandora's box. Yes. For my States and two others. But 
I think, frankly, it is not good policy and does not do the kind of 
improvement of the overall Medicare program which my State should 
participate in as well as the other States represented here.
  There is no Federal oversight by the Secretary of Health and Human 
Services for this plan.
  There are a host of other problems with this amendment. It is my 
understanding that the managers gave a commitment that this amendment 
be included in the package. And so to honor the chairman's commitment, 
I will not object to this amendment nor call for a vote to strike the 
amendment. But I, unfortunately, will have to vote against this bill.
  The PRESIDENT pro tempore. Is there further debate?
  Mr. GRASSLEY. I ask unanimous consent that the amendment be agreed 
to.
  The PRESIDENT pro tempore. Is there objection? Without objection, it 
is so ordered.
  The amendment (No. 1133) was agreed to.


                      Amendments En Bloc Withdrawn

  Mr. GRASSLEY. Mr. President, I ask unanimous consent to withdraw the 
pending amendments.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  The amendments (Nos. 953, 958, 934, 964, 965, 980, 979, 973, 986, 
990, 977, 993, 962, 1004, 1019, 1020, 1021, 999, 954, 1037, 1039, 1051, 
1012, 1061, 1075, 1076, 1077, 1024, 1073, 1088, 1089, 1090, 1091, 1110, 
and 1041) were withdrawn.


                             Adult Day Care

  Mr. BUNNING. Mr. President, during consideration of this bill in the 
Finance Committee, I submitted language regarding adult day care which 
I and my staff were told by Finance Committee staff was acceptable and 
included in S. 1, the Prescription Drug and Medicare Improvement Act of 
2003, as part of the base bill to be considered on the Senate floor. I 
was very thankful for your consideration and approval of my language, 
Chairman Grassley.
  Mr. GRASSLEY. Yes, Senator Bunning, I remember your submitted 
language regarding Adult Day Care.
  Mr. BUNNING. After we voted to pass S. 1 out of the Finance 
Committee, I have since learned that the adult day care language 
accepted and made part of the bill is not the language I submitted at 
all, but instead it is language

[[Page 16687]]

based on a bill introduced by Senator Santorum related to the same 
issue.
  Mr. GRASSLEY. Yes, this is true, and I apologize for the inaccurate 
information and misunderstanding provided to you and your staff from 
the Finance Committee on this issue. The language included in the base 
bill instead is based on Senator Santorum's bill.
  Mr. BUNNING. While Senator Santorum's adult day care proposal and my 
adult day care language are different, they both share the same goal of 
providing services to those special and needy adults who require extra 
attention and care. However, I have some differences with Senator 
Santorum's proposal, and he has some differences with my proposed 
language.
  Mr. SANTORUM. Yes, we do share the same goal on this adult day care 
issue, and we do have some fundamental differences with one another's 
proposals and language on the matter.
  Mr. GRASSLEY. Yes, that is my understanding, as well.
  Mr. BUNNING. I am hopeful that once this bill gets to conference, we 
and our staffs can work out our differences on this adult day care 
issue and find a solution that is amenable to all of us. It is also my 
understanding the current version of the House of Representative's 
prescription drug benefit bill includes the adult day care language 
which is identical to my language.
  Mr. SANTORUM. I am willing to work on this matter further, and do 
agree that since the Senate's and House of Representative's versions on 
the adult day care language will be different, we will have to find a 
solution to our differences on this important issue.
  Mr. GRASSLEY. I will be happy to work with both of you and our staffs 
to rectify this problem. Adult day care is an important issue, and 
being that the Senate and House of Representatives will have different 
language on this issue, it must be conferenced in a way to ensure that 
all with interests in this matter, including interested provider and 
senior organizations, are involved and approving of the final adult day 
care language. I am looking forward to further working with both of you 
on this matter.
  Mr. BUNNING. Thank you, Mr. Chairman and Senator Santorum. I 
appreciate both your willingness to revisit this matter and your 
leadership on this important legislation for our seniors.


                            fee for service

  Mr. FRIST. Mr. President, I believe in assuring the ability of 
seniors who choose to do so to add their own funds on top of the 
government contribution in order to participate in private fee-for-
service plans under Medicare. I also believe that private fee-for-
service plans should be able to provide an unmanaged form of the 
subsidized prescription drug benefit.
  Accordingly, I am committed to ensuring that the bill reported from 
the conference committee that will consider S. 1 and H.R. 1 
incorporates the functional equivalent of those provisions in H.R. 1 
that permit private fee-for-service plans to provide the subsidized 
prescription drug benefit as an unmanaged benefit whose premium amount, 
just like the premium amount such plans charge for the core Medicare 
benefit under current law, is not subject to governmental review or 
approval.
  Mr. GRASSLEY. I agree.


                         repeal of therapy caps

  Mr. ENSIGN. Mr. President, I will withdraw my amendment to repeal the 
arbitrary beneficiary caps on therapy. However, I would urge my 
colleague from Iowa, the Chairman of the Finance Committee, to work in 
conference to find a way to delay this law. As you know, the 
beneficiary caps will have one of three results--beneficiaries will 
either: (1) pay 100 percent out-of-their own pocket once the caps are 
exceeded; (2) self-ration therapy care; or (3) forgo medically 
necessary care altogether. Mr. President, I recognize that the Chairman 
has been a voice to eliminate these caps and hope that a final Medicare 
bill further delays implementation of them.
  Mrs. LINCOLN. Mr. President, I would like the opportunity to join my 
colleague from Nevada to speak in support of repealing the caps on 
outpatient physical therapy, occupational therapy, and speech-language 
pathology.
  The current therapy cap discriminates against the most vulnerable of 
Medicare beneficiaries. While the majority of enrollees will not exceed 
an annual $1,590 limitation on rehabilitation services, approximately 
13 percent of seniors and individuals with disabilities covered by 
Medicare will be forced to pay for medically necessary services out of 
pocket.
  This is a particularly burdensome situation for beneficiaries living 
in rural communities. Most likely to be harmed are beneficiaries who 
have experienced a stroke or hip fracture or who have Parkinson's 
disease or other conditions that require extensive rehabilitation 
following injury or illness.
  I urge the Chairman and Ranking Member of the Finance Committee to 
work with me and my colleague, the Senator from Nevada, on repealing 
this cap or at least suspending it for 1 or 2 years. My colleague and I 
have sponsored legislation (S. 569) to permanently repeal this cap. Our 
bill has been cosponsored by 41 members of the Senate.
  Again, I appreciate the opportunity to join my colleagues from Nevada 
today. It is my sincere hope, Mr. President, that we will be able to 
address the issue of the burdensome $1,590 cap on outpatient therapy 
services.
  Mr. GRASSLEY. I thank both the Senator from Nevada and the Senator 
from Arkansas for their comments and for withdrawing the amendment. As 
you may know, I asked CMS Administrator Scully at the Finance Committee 
markup to further delay implementation of these beneficiary caps. 
Unfortunately, as a result of the Senate Budget Resolution constraints, 
I do not have Medicare dollars to repeal the beneficiary cap on therapy 
services. I agree that this arbitrary limit does not make sense and 
have sought to address this issue in the past. I will work in 
conference to enact a therapy cap moratorium and appreciate your hard 
work and passion on this issue.
  Mr. ENSIGN. I appreciate the Chairman's leadership on this issue and 
I thank my colleague for agreeing, at a minimum, to work toward another 
moratorium on implementation of the therapy cap. I would also like to 
thank the Senator from Arkansas for her words of support. Mr. 
President, I yield the floor.
  I ask unanimous consent that this full statement be included in the 
Record as if read.
  Mr. HATCH. Mr. President, I strongly support Senator Kyl's sense of 
the Senate resolution to S. 1. His resolution asks Congress to rectify 
problems with the formula that is used to update Medicare physician 
reimbursement.
  Due to flaws in this formula, payment rates for physicians and other 
practitioners are predicted to fall by 4.2 percent in 2004. This cut in 
physician compensation would be the fifth since 1991 including a 5.4 
percent decrease in 2002. According to Medicare's own conservative 
estimates, between the years 1991 and 2003, reductions for physicians 
and other health professionals resulted in Medicare physician 
reimbursement that equates to 14 percent below their actual practice 
costs. The 2004 reduction would decrease Utah physician income by $13 
million which translates to $3003 per physician in 2004. And this is in 
addition to the $9 million decrease in reimbursement that Utah 
physicians received in 2002. Furthermore, unless we correct this 
formula, it is estimated that more cuts will occur in 2005, 2006, and 
2007.
  The Medicare Payment Advisory Commission, MedPAC, has stated that 
these reimbursement reductions are the result of a problem with the 
Sustained Growth Rate that is used as part of the calculation to adjust 
rates each year. The SGR expenditure target is linked to gross domestic 
product. Therefore, the formula may decrease Medicare reimbursement for 
physicians and other practitioners when health care volume increases 
outstrip increases in the gross domestic product. The problem is 
magnified when gross domestic product decreases. Essentially, the 
formula penalizes physicians

[[Page 16688]]

for factors over which they have no control.
  It is true that as the population of our country ages, the volume of 
Medicare health care services consumed increases. However, physicians 
have no control over this and our Medicare system penalizes them 
because of it. As a result, some physicians no longer take new Medicare 
patients, some decline to participate in the Medicare program 
altogether, and young people are considering other professions.
  I would submit that as the baby-boomer generation ages and increasing 
numbers of Americans become Medicare beneficiaries, we need physicians 
and other health care providers more than ever. If anything, we should 
be rewarding our physicians, not penalizing them.
  An additional problem with the Sustained Growth Rate calculation is 
that it does not account for many changes in health care that improve 
quality but increase physician work also. The federal government 
actively promotes new coverage decisions, quality improvement 
activities and other initiatives that benefit patients but are not 
taken into account by the Sustained Growth Rate calculation.
  MedPAC's recommendation to Congress is that annual updates in 
physician payments should reflect increases in the Medicare Economic 
Index or MEI rather than the gross domestic product. Using the Medicare 
Economic Index would eliminate the penalty that physicians and other 
practitioners currently experience when the volume of health care 
services increases due to factors that they are unable to control.
  What we have before us is a flawed formula that is threatening the 
health of Americans and the future of our country. Congress has 
addressed this problem before, but it seems that we were only putting a 
bandage over the wound; we never cured the disease that caused it. The 
wound continues to fester and it will continue to do so until we cure 
the problem. And the cure, it seems, is to revise the formula.
  I for one, am tired of applying bandages to this wound. I believe 
that it is time to address this problem directly and definitively. I 
urge my colleagues to join with me in supporting this resolution and in 
working to correct this problem.
  Mr. FEINGOLD. Mr. President, I joined my colleague, the distinguished 
Senator from Oregon, Mr. Smith, in offering an amendment to promote 
better care for frail elderly and disabled. This amendment will allow 
the Secretary of the Department of Health and Human Services to 
designate health plans that disproportionately serve special needs 
beneficiaries as specialized Medicare Advantage plans.
  A number of States have successfully chosen to serve seniors and the 
disabled by combining Medicare and Medicaid services through a waiver 
approved by the Department of Health and Human Services that integrates 
services under Medicare and Medicaid capitated financing arrangements. 
These programs provide beneficiaries with a comprehensive benefit 
package that combines the services traditionally provided by Medicare, 
Medicaid, and home and community based waiver programs.
  In my home State of Wisconsin, the Wisconsin Partnership Program is 
one such success, a community-based program that has improved the 
quality, access, and cost-effectiveness of the care delivered to its 
beneficiaries. Perhaps most important to the beneficiaries, these 
programs help the disabled and the frail elderly remain in their own 
community, and avoid institutionalized care. Wisconsin is lucky to have 
four such programs across our State: Elder Care and Community Living 
Alliance of Dane County, Community Care for the Elderly of Milwaukee 
County, and Community Health Partnership Eau Claire, Dunn, and Chippewa 
Counties.
  In order to qualify for these programs, a person must be Medicaid-
eligible, have physical disabilities or frailties of aging, and require 
a level of care provided by nursing homes. Through programs such as the 
Wisconsin Partnership Program, these frail elderly and disabled 
beneficiaries are able to receive quality preventive care upfront, 
which allows more beneficiaries to stay in their communities and 
reduces the rate of hospitalization.
  In Wisconsin, about 26 percent of all Medicaid recipients age 65 or 
older are in nursing homes. This rate drops dramatically for those 
enrolled in the Wisconsin Partnership Program, where only 5.9 percent 
of recipients age 65 or older are in nursing homes.
  While the Wisconsin Partnership Program is a success, we must ensure 
that the Federal Government continues to support these State-based 
solutions to our long-term care needs and other specialty managed care 
programs that focus on frail, chronically ill seniors. Last year I 
introduced the Frail Elderly Act of 2002, which promoted specialty 
managed care programs and helped those already in existence to continue 
to operate. This amendment will work to accomplish both goals by 
providing a population-based designation that allows plans to be 
recognized for specialization in services for special needs 
beneficiaries. By establishing this specialized designation, we hope to 
be able to more easily move specialized plans from demonstration status 
to mainstream provider status, helping to promote a more effective way 
of caring for the frail elderly and disabled.
  Mr. President I also want to point out that this amendment does not 
change payments, does not change administrative rules, and therefore 
does not have a fiscal effect.
  Fundamental long-term care reform is vital to any health care reform 
that Congress may consider. As part of these reforms, we must support 
State and local efforts to encourage care for the most vulnerable 
populations. We must provide our seniors and disabled with real 
choices. They are entitled to the opportunity to continue to live in 
the homes and communities that they helped build and sustain. I urge my 
colleagues to support this amendment that will help provide a measure 
of support for the most frail elderly and disabled to allow them to 
stay in their own homes.
  Mr. President, I ask unanimous consent that two letters of support 
for this amendment, from the Community Health Partnership and Elder 
Care of Dane County be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


                                              Community Health

                                            Partnership, Inc.,

                                    Eau Claire, WI, June 26, 2003.
     Hon. Russell Feingold,
     U.S. Senate,
     Washington, DC.
       Dear Senator Feingold: I am writing to express my support 
     for the amendment you will be offering with Senator Gordon 
     Smith to create a designation for Medicare Advantage plans 
     that target special needs beneficiaries. Community Health 
     Partnership, Inc. (CHP) is one of four Wisconsin Partnership 
     Program demonstration sites that has developed innovative 
     models of care specifically for frail seniors and people with 
     physical disabilities that would benefit from a specialty 
     designation.
       The Wisconsin Partnership Program (WPP) is an integrated 
     program of acute and long-term care services designed to 
     improve access to needed care, reduce fragmentation of care 
     across providers and settings, and help people remain 
     independent in the community, while achieving cost savings. 
     The target populations for WPP include both elderly and 
     physically disabled individuals who meet nursing home level 
     of care criteria. CHP serves both populations in a 3 county, 
     rural area. Participants must be Medicaid eligible or dually 
     eligible for Medicare and Medicaid services. A hallmark of 
     this program is the use of an inter-disciplinary care team 
     comprised of a physician, nurse practitioner and social 
     worker that help coordinate beneficiaries' care across all 
     health care settings. The WPP also participates in the 
     Medicare/Medicaid Integration Program, a demonstration to 
     test strategies for integrating Medicare and Medicaid 
     services. The goal of this program is to create a seamless 
     system of care for beneficiaries and to reduce costs related 
     to duplication of services and administrative functions 
     across programs.
       Like a number of other specialty Medicare+Choice programs, 
     the WPP currently operates under demonstration authority, 
     which expires at the end of next year. And, like virtually 
     all Medicare demonstration programs, there is no mechanism 
     for transitioning from demonstration status into the 
     mainstream of Medicare. I understand that The Medicare 
     Prescription Drug and Reform Act of 2003 begins to address 
     this problem by establishing a special designation for 
     specialized Medicare Advantage plans that exclusively serve 
     special needs

[[Page 16689]]

     beneficiaries. Your amendment would allow the Secretary also 
     to designate as specialized Medicare Advantage plans those 
     that disproportionately serve special needs beneficiaries.
       The expansion of the specialized Medicare Advantage 
     designation would provide CHP and other WPP members 
     additional flexibility in expanding our unique program to 
     other beneficiary groups such as those who are eligible for 
     Medicare, but not Medicaid and ``pre-duals''--those who are 
     at risk of spending down to Medicaid based on health status 
     and/or income limitations. Targeting healthy beneficiaries 
     before they become frail or disabled would reduce long-run 
     Medicare and Medicaid costs by preventing or delaying health 
     care decline and the need for costly medical or long-term 
     care services. Your amendment also would offer CHP a 
     mechanism to serve non-special needs beneficiaries as a 
     strategy for expanding our membership under a mainstream 
     model or reducing our risk through a more representative 
     cross-section of Medicare beneficiaries in West Central 
     Wisconsin.
       Your compassion for seniors, disabled and other special 
     needs beneficiaries has been evident since you served as the 
     Chair of the Senate Aging Committee in the State of 
     Wisconsin. The amendment you are offering to the Senate 
     Medicare bill only provides further evidence that you 
     continue to be hard at work on behalf of Wisconsin's most 
     vulnerable populations. Thank you for all of your work on 
     behalf of Wisconsin's seniors.
           Sincerely,
                                                 Karen A. Bullock,
     CEO.
                                  ____



                                    Elder Care of Dane County,

                                       Madison, WI, June 24, 2003.
     Hon. Russell Feingold,
     U.S. Senate,
     Washington, DC
       Dear Senator Feingold: I am writing to express my support 
     for the amendment you will be offering with Senator Gordon 
     Smith to create a designation for Medicare Advantage plans 
     that target special needs beneficiaries. Elder Care of Dane 
     County is one of four Wisconsin Partnership Program 
     demonstration sites that has developed innovative models of 
     care specifically for frail seniors and people with physical 
     disabilities that would benefit from a specialty designation.
       The Wisconsin Partnership Program (WWP) is an integrated 
     program of acute and long-term care services designed to 
     improve access to needed care, reduce fragmentation of care 
     across providers and settings, and help people remain 
     independent in the community, while achieving cost savings. 
     The target populations for WWP include both elderly and 
     physically disabled individuals who meet nursing home level 
     of care criteria. Elder Care Partnership serves frail elderly 
     beneficiaries. Participants must be Medicaid eligible or 
     dually eligible for Medicare and Medicaid services. A 
     hallmark of this program is the use of an inter-disciplinary 
     care team comprised of a physician, nurse practitioner and 
     social worker that help coordinate beneficiaries' care across 
     all health care settings. The WWP also participates in the 
     Medicare/Medicaid Integration Program, a demonstration to 
     test strategies for integrating Medicare and Medicaid 
     services. The goal of this program is to create a seamless 
     system of care for beneficiaries and to reduce costs related 
     to duplication of services and administrative functions 
     across programs.
       Like a number of other speciality Medicare+Choice programs, 
     the WWP currently operates under demonstration authority, 
     which expires at the end of next year. And, like virtually 
     all Medicare demonstration programs, there is no mechanism 
     for transitioning from demonstration status into the 
     mainstream of Medicare. I understand that The Medicare 
     Prescription Drug and Reform Act of 2003 begins to address 
     this problem by establishing a special designation for 
     specialized Medicare Advantage plans that exclusively serve 
     special needs beneficiaries. Your amendment would allow the 
     Secretary also to designate as specialized Medicare Advantage 
     plans those that disproportionately serve special needs 
     beneficiaries.
       The expansion of the specialized Medicare Advantage 
     designation would provide Elder Care and other WWP members 
     additional flexibility in expanding our unique program to 
     other beneficiary groups such as those who are eligible for 
     Medicare, but not Medicaid and ``pre-duals''--those who are 
     at risk of spending down to Medicaid based on health status 
     and/or income limitations. Targeting healthy beneficiaries 
     before they become frail or disabled would reduce long-run 
     Medicare and Medicaid costs by preventing or delaying health 
     care decline and the need for costly medical or long-term 
     care services. Your amendment also would offer Elder Care a 
     mechanism to serve non-special needs beneficiaries as a 
     strategy for expanding our membership under a mainstream 
     model or reducing our risk through a more representative 
     cross-section of Medicare beneficiaries in Madison.
       Your compassion for seniors, disabled and other special 
     needs beneficiaries has been evident since you served as the 
     Chair of the Senate Aging Committee in the State of 
     Wisconsin. The amendment you are offering to the Senate 
     Medicare bill only provides further evidence that you 
     continue to be hard at work on behalf of Wisconsin's most 
     vulnerable populations. Thank you for all of your work on 
     behalf of Wisconsin's seniors.
           Sincerely,
                                                     Karen Musser,
                                                              CEO.

  Mr. HATCH. Mr. President, I rise to speak on the Gregg-Schumer 
amendment which was adopted last week. This amendment was based on a 
piece of legislation, S. 1225, the Greater Access to Affordable 
Pharmaceuticals Act of 2003, reported by the HELP Committee on June 
11th.
  I want to take this opportunity to explain why I cast the lone vote 
against this amendment. It is my hope that when my colleagues consider 
my explanation that they may be open to making additional changes to 
this very important amendment as the process moves forward.
  Let me start by commending Senators Gregg, Schumer, McCain, and 
Kennedy for their work in developing this provision which I believe is 
a significant improvement on legislation that was adopted by the Senate 
last Congress, S. 812.
  The Gregg-Schumer amendment relates to a complex and often admittedly 
confusing law I coauthored with my friend, Representative Henry Waxman 
of California in 1984 the Drug Price Competition and Patent Term 
Restoration Act.
  I chaired a hearing of the Senate Judiciary Committee in May of 2001 
that helped document some abuses that were occurring in the law. Since 
our last hearing on this issue, much has happened.
  Both the Federal Trade Commission and the Food and Drug 
Administration played a constructive role in attempting to end several 
mechanisms by which some research-based and generic drug firms were 
attempting to game the system put in place by the 1984 and subsequent 
court decisions to avoid competition in the marketplace.
  The FTC succeeded in achieving several widely-publicized consent 
decrees with a variety of offending firms under the existing antitrust 
statutes.
  In addition, the FTC conducted an exhaustive survey and study of how 
certain provisions of the 1984 Waxman-Hatch Act affected competition in 
the pharmaceutical industry.
  The FTC study contained two major recommendations. The first 
addressed the use of the statutory 30-month stay granted by the 1984 
law in situations where patents are challenged by generic competitors. 
The FTC recommended that the law:

       Permit only one automatic 30-month stay per drug product 
     per ANDA to resolve patent infringement disputes over patent 
     listed . . . prior to the filing date of the generic 
     applicant's ANDA.

  This was precisely the position that I suggested in testimony before 
the HELP Committee on May 8, 2002 and argued for last year during the 
Senate debate on the Edwards-Collins substitute amendment to the 
McCain-Schumer legislation.
  I would note that the 30-month stay provision in the McCain-Schumer 
bill last year, S. 812, and in the Edwards-Collins substitute, were 
both at variance with this central recommendation of the FTC report.
  The second major FTC recommendation responds to those situations in 
which R&D and generic firms were entering into agreements not to impede 
generic competition. The FTC recommended that Congress:

       Pass legislation to require brand-name and first generic 
     companies applicants to provide copies of certain agreements 
     to the Federal Trade Commission.

  Senator Leahy, working very closely with the FTC, developed 
legislation, the Drug Competition Act, S. 946, that squarely addressed 
this second recommendation.
  During the 107th Congress, I worked with Senator Leahy on refining 
that bill. I supported it in committee, and worked with him to pass it 
through the Senate late last year. I supported his efforts to have it 
attached to the Medicare vehicle earlier this week. I expect that the 
108th Congress will adopt this measure.
  The FTC study served an important purpose of cataloging the facts 
surrounding certain abuses of the 1984 act.

[[Page 16690]]

In formulating public policy, the facts should matter and a legislative 
or regulatory response should be tailored to fit the problem.
  Unfortunately, the timing of the issuance of the FTC study did not 
allow the report to get the attention it deserved by the Senate. The 
FTC report was published only one day before the Senate adopted S. 812, 
the Greater Access to Affordable Pharmaceuticals Act of 2003, last July 
31.
  The GAAP Act, developed by Senators McCain and Schumer, was 
substantially altered by the Edwards-Collins substitute, with the 
active involvement of Senator Kennedy.
  While there is no question my colleagues were motivated by their goal 
of making drugs more affordable for seniors and all Americans, and 
despite the fact that it garnered 78 votes in the Senate, there were 
significant shortcomings in the bill.
  Let me briefly review a few of the most troublesome provisions of the 
Edwards-Collins substitute to S. 812. The proposed legislation would 
have created for the first time a private right of action in the 
Federal Food, Drug, and Cosmetic Act. The last thing the already 
overburdened FDA staff needs is a bunch of trial lawyers bringing the 
agency to a screeching halt by second-guessing its judgment calls.
  The bill that passed last year would have resulted in the waiver of 
patent rights apparently against even third parties--if pioneer drug 
firms did not file its patents with the FDA and, if challenged by a 
generic drug applicant, pursue expensive litigation within tight time 
frames.
  In sharp contrast to the FTC recommendation, S. 812 basically made 
any patents listed with the FDA after a month from the date the pioneer 
drug application was approved by the FDA ineligible for the 30-month 
stay. In most cases, this is at least four years earlier than what I 
and the FTC recommended--freezing the Orange Book to patents listed 
before a generic drug application was filed.
  The American Intellectual Property Law Association opposed S. 812. 
The patent-dependent biotech industry worked against the bill. The 
Patent and Trademark Office found that ``S. 812 would forfeit 
unnecessarily the core right of patent holders--the right to exclude 
others from practicing the inventions for the entire patent term. After 
years of research and development and significant investment, the 
patent right is extinguished for the mere failure to satisfy an 
administrative task or respond in a timely manner.''
  Here is what the July 18, 2002 Statement of Administration Policy 
said about the Edwards-Collins-McCain-Schumer legislation:

     . . . the Administration opposes S. 812 in its current form 
     because it will not provide lower drug prices. S. 812 would 
     unnecessarily encourage litigation around the initial 
     approval of new drugs and would complicate the process of 
     filing and protecting patents on new drugs. The resulting 
     higher costs and delays in making new drugs available will 
     reduce access to new breakthrough drugs. Moreover, the new 
     cause of action is not necessary to address patent process 
     abuses. Clearly, the bill would benefit from consideration by 
     the Senate's experts on Hatch-Waxman law on the Judiciary 
     Committee, the proper committee of jurisdiction for this 
     bill.

  While S. 812 passed by a very wide margin, it was certainly not 
without its critics.
  Comes now S. 1225. This bill emerged from the HELP Committee. Once 
again, it is entitled the Greater Access to Affordable Pharmaceuticals 
Act. Once again, it is cosponsored by Senators McCain, Schumer, and 
Kennedy.
  Due in large part to the leadership of Chairman Gregg, there are 
significant changes in the bill compared with last year's legislation.
  While I have significant concerns over certain aspects of S. 1225 as 
adopted in its amended form on June 19, 2003, I must acknowledge 
Chairman Gregg and Majority Leader Frist for their roles in working 
with the cosponsors of last year's bill to make substantial 
improvements in the legislation.
  Likewise, I commend Senators Schumer, McCain and Kennedy for 
abandoning many of the troublesome features of a bill that garnered 78 
votes last Congress.
  I can only believe that the factual presentation, analysis, and 
recommendations contained in the FTC report and subsequent public 
notice and comment process surrounding the recently issued FDA final 
rule on patent listings and the application of the statutory 30-month 
stay both played a constructive role in helping to form the basis of 
the Gregg-Schumer legislation.
  It is appropriate to recognize the efforts of the Bush administration 
for tackling the problem of multiple, successive 30-months stays 
through rulemaking. Secretary Thompson, Commissioner McClellan, and FDA 
Chief Counsel Dan Troy, should be saluted for their roles in so 
promptly completing a rulemaking regarding patent listing that 
generally embraced the one-and-only-one 30-month stay policy 
recommended in the FTC Report. Chairman Muris and the FTC staff deserve 
credit for a report that helped shape a more carefully targeted policy 
response.
  There can be no doubt that this year's vehicle, S. 1225, is superior 
to S. 812. This new Gregg-Schumer bill, S. 1225, embraces exactly the 
type of one-and-only-one 30-month stay policy that I suggested to the 
HELP Committee last May, argued for on the floor last July, and was 
ultimately recommended by the FTC.
  The Gregg-Schumer legislation, S. 1225 in the form adopted by the 
Senate, also addresses some problems that the FDA rule perhaps did not 
resolve satisfactorily. As FDA Chief Counsel Dan Troy stated at the 
June 17th Judiciary Committee hearing:

       We tried as best we could to cut down on all opportunities 
     for gaming. We did not succeed in cutting down all 
     opportunities for gaming, because nothing, no legislation is 
     so good, no rule could be so good as to cut down all 
     opportunities for gaming, because there are unforeseen 
     circumstances and unintended consequences.

  I think Mr. Troy is correct about the nature of the inherent 
limitations of regulatory and legislative fixes for complex problems 
where there are powerful incentives to game the system to gain 
financial advantage. We need to keep this in mind as we analyze further 
the amendment the Senate adopted last week.
  As I stated at the June 17th hearing, it was unfortunate that the PTO 
was unable to present a witness. Admittedly, the invitation was issued 
on short notice. I have asked PTO for its formal comments on the Gregg-
Schumer amendment. I would also be interested in the PTOs comments on 
whatever language the House adopts. We would also be wise to hear from 
the Office of the United States Trade Representative if USTR finds that 
the legislation raises any concerns for international trade and 
intellectual property under the TRIPS provisions.
  It is my understanding that FDA and FTC staff provided a great deal 
of what is known as ``technical assistance'' on the Gregg-Schumer 
amendment, a good deal of it between the markup on June 11th and the 
time the amendment was offered on June 19th. I am not aware whether PTO 
or USTR were consulted.
  PTO and USTR should understand that this is a fast moving train, so 
they should be prepared to give us any comments they may have in short 
order. President Bush and the congressional leadership have made it 
plain that they expect the conference report on the Medicare bill to be 
completed as soon as possible.
  One special area of concern to me as Chairman of the Judiciary 
Committee is that one provision of the amendment overwhelmingly adopted 
by the Senate raises significant issues with respect to civil justice 
policy, including a constitutional concern. Specifically, proposed 
section 271(e)(5) of title 35, would make the failure of a patentee to 
file a patent infringement action within a specified time frame 
sufficient to establish ``an actual controversy'' for the purpose of 
establishing subject matter jurisdiction for a declaratory judgement 
action by a generic drug firm challenging a patent.
  Whether the Congress can, or should, by statute grant subject matter 
jurisdiction for a declaratory judgment based on the failure to bring a 
suit

[[Page 16691]]

raises some interesting questions, particularly in light of manner in 
which the U.S. Courts of Appeals, including the Federal Circuit, have 
developed and applied the ``reasonable apprehension'' test. At our June 
17th hearing, DOJ did not present the Judiciary Committee with its 
final opinion on the matter but Mr. Sheldon Bradshaw, Deputy Assistant 
Attorney General, Office of Legal Counsel, noted, ``that the actual 
case of controversy requirement is constitutionally compelled rather 
than statutorily required. And as a result, Congress can't simply 
create a case or controversy by statute but the plaintiffs must 
establish the constitutional requirement for bringing the case.'' The 
committee has received a spirited correspondence that takes differing 
views on the case or controversy provision of the Gregg-Schumer 
amendment.
  I have requested the Department of Justice for its formal views on 
this language. At this point, I think it premature to embrace this 
language. It is my understanding that the bill that the House will take 
up does not contain the controversial case or controversy language. I 
stand prepared to work with the sponsors of the amendment, DOJ and 
others on this important issue.
  Yet another improvement of S. 1225 over the bill adopted by the 
Senate last year relates to the manner in which the 180-day rule is 
addressed. In short, I am pleased that the policy embraced last year, 
the rolling exclusivity policy, was replaced in favor of a ``use it or 
lose it'' approach. I have long stated a preference for the consumer 
friendlier ``use it or lose it'' rule over the too open-ended rolling 
exclusivity.
  The Waxman-Hatch law provides an incentive for generic firms to 
challenge patents. To encourage generic competitors to pursue patent 
challenges in a vigorous fashion, the 1984 law provided 180 days of 
marketing exclusivity in situations where a generic drug firm could 
show the pioneer's patents were invalidated or not infringed. For many 
years it was thought, as intended, that this valuable 180-day period of 
exclusive marketing would be granted to the first generic firm to 
successfully invalidate or invent around the pioneer's patents.
  FDA regulations issued in 1994 required that the first generic 
applicant had to defend successfully against a patent claim made by a 
brand name company to receive the 180-day exclusivity. In a 1998 D.C. 
Circuit case, Mova v. Shalala, the court construed the plain language 
of the statute to strike down the successful defense requirement. As a 
result FDA now makes 180-day exclusivity decisions by applying the 
literal words of the statute. This results in a system that rewards 
first filers, not necessarily successful challengers.
  The Gregg-Schumer amendment retains the preference for first filers. 
I believe that re-instating the successful defense requirement may 
prove preferable than intentionally sanctioning a first filer regime.
  Frankly, I am uncertain of the policy justification for S. 1225's 
retention of granting the 180-day reward to the first filer rather than 
the first successful defendant. I believe that there is a lot to be 
said for giving the reward to the actual winner in court or the first 
not to be sued, not just the first one to enter the Parklawn Building 
with an application.
  The amendment places a high premium on being a first filer. At our 
hearing last week, FTC Chairman Muris characterized the rush to be a 
first filer as ``the shantytown problem of people in line to file.'' 
FDA Chief Counsel Troy described that ``. . . right now, there are 
sometimes limousines, sometimes vans, sometimes cars, sometimes even 
tents in the Metro North parking lot that come days, weeks, and in some 
cases even months in advance of a particular date. Why we should reward 
someone because they camp out longer in the parking lot is a good 
question?''
  I am concerned that the language that passed the Senate could allow 
some unintended and, in fact, counterproductive, results. Changes in 
current law with respect to the court decision and commercial marketing 
triggering mechanisms for the 180-day exclusivity provision demand 
careful attention and analysis. The amendment does not appear to adopt 
all the FTC recommendations in this area.
  Other questions should be raised. What if, for example, the generic 
applicant that successfully challenges the validity of the patent is 
not also a first filer? Why should such a non-first filing but 
successful invalidity challenger not be granted the 180 days 
exclusivity? Stated another way, why should the first filer--or in 
Chairman Muris' ``shantytown'' situation, a whole group of first-day, 
exclusivity-sharing, first-filers, gain while the actual successful 
challenger waits out the 180-days? I am not sure that such an outcome 
is fair or even rational. Moreover, such a system may not result in the 
most efficient or aggressive pursuit of patent challenges.
  One thing is for sure: You can expect a lot more first filers to 
appear at the door of the FDA building on the first day that successful 
drugs become eligible for patent challenges. As I pointed out at the 
Judiciary Committee hearing, some have already suggested that the first 
to file system might result in an increase in willful infringement 
cases. In fact, there was a decision last month by a Federal court in 
Chicago that ruled against a generic firm which filed a generic drug 
challenge before obtaining the opinion of outside counsel on either 
non-infringement or invalidity.
  Another type of potential problem could arise, and frankly I am not 
certain how it can be avoided, if a non-first filing generic drug 
challenger wins a court decision on grounds of non-infringement. Unless 
I am wrong in my understanding of the Gregg-Schumer amendment, a 
generic challenger that prevailed on a non-infringement theory would 
have to wait for the 180-days granted the first filer, or a group of 
first-day, first-filers, to expire before the non-infringing firm could 
enter the market. Such an outcome only hurts consumers by needlessly 
delaying introduction of the non-infringing generic product for 180 
days.
  Unlike a determination of patent invalidity, a finding of non-
infringement does not accrue to third parties. It is important to 
understand that there are two ways for a generic firm patent challenger 
to be awarded the 180-day exclusivity under the law. First, the generic 
challenger can show that the pioneer's patent is invalid. And second, 
the generic challenger can demonstrate that its product will not 
infringe a pioneer's patent.
  These are two very different theories. Al Engelberg, a highly 
successful and highly respected attorney engaged by generic drug firms 
to attack pioneer patents, has made the following observation about the 
difference between invalidity and non-infringement challenges:

       In cases involving an assertion of non-infringement, an 
     adjudication in favor of one challenger is of no immediate 
     benefit to any other challenger and does not lead to multi-
     source competition. Each case involving non-infringement is 
     decided on the specific facts related to that challenger's 
     product and provides no direct benefit to any other 
     challenger. In contrast, a judgment of patent invalidity or 
     enforceability creates an estoppel against any subsequent 
     attempt to enforce the patent against any party. The drafters 
     of the 180-day exclusivity provision failed to consider this 
     important distinction.

  As one of the drafters of the 1984 law, I must accept a measure of 
responsibility for this problem. It is not clear, however, that S. 1225 
has addressed this issue in a satisfactory fashion. The language 
adopted in the Gregg-Schumer amendment does not appear to solve the 
problem created by the 1998 Mova decision that effectively eliminated 
the successful defense requirement.
  Frankly, I think we need further thought on how best to address the 
implications of the distinction between invalidity and non-infringement 
claims in the context of Hatch-Waxman patent challenges and 180-day 
exclusivity awards. Specifically, I question the appropriateness of 
continuing to group together patent invalidity and patent non-
infringement challenges, particularly in light of the fact that the 
latter may in practice extend longer than the purported 180-day award. 
From what I

[[Page 16692]]

know now, there are strong arguments to prefer the reinstatement of the 
successful defense requirement over the establishment of a new system 
based on first filing.
  Let me close by once again commending Senators Gregg, Schumer, 
McCain, and Kennedy for all their hard work in reaching the compromise 
amendment that was so overwhelmingly adopted by the Senate. The Gregg-
Schumer amendment represents significant improvement over the 
legislation passed by the Senate last year. I am pleased that the 
amendment adopts the one-and-only-one 30-month stay policy that I, and 
the FTC, advocated last year.
  I am also pleased that the Senate has adopted Senator Leahy's Drug 
Competition Act, which also addressed a major recommendation of the 
FTC. I have worked with Senator Leahy to perfect and pass this measure.
  As a co-author of the 1984 Drug Price Competition and Patent Term 
Restoration Act, I support efforts to bring affordable and innovative 
drugs to the American public. While I support the spirit and much of 
the letter of the Gregg-Schumer amendment, for the reasons I have set 
forth, I was unable to fully support this measure at this time.
  Mr. BUNNING. Mr. President, during consideration of S. 1, an 
amendment was introduced by Senators Santorum and Schumer dealing with 
payments to the Medicare+Choice program. This amendment would have 
increased payments to the M+C plans over the next 2 years, to make sure 
they are still viable when the MedicareAdvantage program takes effect 
in 2006.
  I realize the amendment was withdrawn because of the lack of funding 
in the Senate bill, but it is still an important issue I would like to 
lend my support to.
  The Medicare+Choice program already provides a good prescription drug 
benefit to many seniors across the county, and gives these seniors 
another option to the Medicare fee-for-service program.
  Unfortunately, many Medicare+ Choice plans are pulling out of the 
program because their reimbursement levels are too low. This is leaving 
many seniors scrambling for a new Medicare+Choice plan or having to go 
back into fee-for-service Medicare which doesn't offer them the same 
types of benefits as their old M+C plan.
  In fact, it seems like every year, more and more Medicare+Choice 
plans leave the market.
  I am concerned if we do not provide these plans with enough funding 
over the next two years while the MedicareAdvantage program is being 
implemented, these M+C plans will continue to leave the program and 
more seniors will be left in the lurch.
  This isn't fair to our seniors.
  I had hoped we could provide some additional funding for the 
Medicare+Choice plans over the next 2 years so the plans currently in 
the program will remain and we might actually attract new plans to 
other areas that have not been served.
  In Kentucky, we have a limited number of Medicare+Choice plans. In 
fact, only seniors in certain counties in Northern Kentucky and around 
Louisville have access to these plans. With higher payments to 
Medicare+Choice plans, we might actually get some more plans to come 
into our state and cover more counties.
  We shouldn't give up on the Medicare+Choice plans, or the seniors 
enrolled in them. I hope this is an issue we can resolve during the 
conference with the House, and I commend Senators Santorum and Schumer 
for bringing this issue before the Senate.
  Mr. LEAHY. Mr. President, I am pleased that late last night the 
Senate again supported lowering drug prices and maintaining a fair 
generic drug approval process by adding the Drug Competition Act of the 
Prescription Drug and Medicare Improvement Act of 2003, S. 1. Last 
November, the Drug Competition Act passed the Senate by unanimous 
consent. On Monday, Senator Grassley and I, along with Senators 
Cantwell, Durbin, Feingold, Kohl, and Schumer, offered our bill as an 
amendment to the larger Medicare bill. I hope that in this Congress it 
is actually enacted into law as part of the larger effort to improve 
the health care of millions of Americans. Prescription drug prices are 
rapidly increasing, and they are a source of considerable concern to 
many Americans, especially senior citizens and families. Generic drug 
prices can be as much as 80 percent lower than the comparable brand-
name versions.
  While the Drug Competition Act is small in terms of length, it is 
large in terms of impact. It will ensure that law enforcement agencies 
can take quick and decisive action against companies that are driven 
more by greed than by good sense. It gives the Federal Trade Commission 
and the Justice Department access to information about secret deals 
between drug companies that keep generic drugs off the market. This is 
practice that hurts American families, particularly senior citizens, by 
denying them access to low-cost generic drugs, and further inflating 
medical costs.
  Last July, the Federal Trade Commission released to comprehensive 
report on barriers to the entry of generic drugs into the 
pharmaceutical marketplace. The FTC had two recommendations to improve 
the current situation and to close the loopholes in the law that allow 
drug manufacturers to manipulate the timing of generics' introduction 
to the market. One of those recommendations was simply to enact our 
bill, as the most effective solution to the problem of ``sweetheart'' 
deals between brand name and generic drug manufactures that keep 
generic drugs off the market, thus depriving consumers of the benefits 
of quality drugs at lower prices. Indeed, at a hearing just yesterday 
in the Judiciary Committee, Chairman Timothy Muris of the FTC praised 
the Drug Competition Act in his testimony and urged its passage. In 
short, this bill enjoys the unqualified endorsement of the current FTC, 
which follows on the support by the Clinton administration's FTC during 
the initial stages of our formulation of this bill. We can all have 
every confidence in the commonsense approach that our bill takes to 
ensuring that our law enforcement agencies have the information they 
need to take quick action, if necessary to protect consumers from drug 
companies that abuse the law.
  Under current law, the first generic manufacturer that gets 
permission to sell a generic drug before the patent on the brand-name 
drug expires, enjoys protection from competition for 180 days--a head 
start on other generic companies. That was a good idea, but the 
unfortunate loophole exploited by a few is that secret deals can be 
made that allow the manufacturer of the generic drug to claim the 180-
day grace period to block other generic drugs from entering the market, 
while at the same time, getting paid by the brand- name manufacturer 
not to sell the generic drug.
  Our legislation closes this loophole for those who want to cheat the 
public but keeps the system the same for companies engaged in true 
competition. I think it is important for Congress not to overreact and 
throw out the good with the bad. Most generic companies want to take 
advantage of this 180-day provision and deliver quality generic drugs 
at much lower cost for consumers. We should not eliminate the incentive 
for them. Instead, we should let the FTC and Justice look at every deal 
that could lead to abuse, so that only the deals that are consistent 
with the intent of that law will be allowed to stand. The Drug 
Competition Act accomplishes precisely that goal, and helps ensure 
effective and timely access to generic pharmaceuticals that can lower 
the cost of prescription drugs for seniors, for families, and for all 
of us.
  The effects of this amendment will only benefit the effort to bring 
quality health care at lower costs to more of our citizens. The Drug 
Competition Act enjoyed the unqualified support of the Senate last 
year, and I am pleased that my colleagues have recognized that it fits 
well within the framework of the Prescription Drug and Medicare 
Improvement Act of 2003. It is a good complement to the larger bill and 
does nothing to disrupt the bill's balance. I

[[Page 16693]]

sincerely hope that this commonsense legislation is a part of any final 
agreement with the House on the larger Medicare prescription drug bill.
  (At the request of Mr. Daschle, the following statement was ordered 
to be printed in the Record.)
 Mr. KERRY. Mr. President, I wish to express my enthusiastic 
support for the amendment Senators Schumer and Santorum offered to 
increase funding for the Medicare+Choice Program in 2004 and 2005. This 
amendment addresses a critically important issue that has far-reaching 
implications affecting the health care benefits of millions of low-
income and minority seniors. I am pleased to be a cosponsor of this 
amendment to ensure that this urgently needed funding increase is 
included in the Medicare bill.
  I believe we must take bold action to address the fact that Congress 
has not provided adequate funding for the health care of Medicare 
beneficiaries who select HMOs and other private sector health plans. In 
many parts of Massachusetts, and in other parts of the country, funding 
for Medicare+Choice plans has been limited to annual increases of only 
2 percent in most years since 1998. These increases are inadequate at a 
time when health care costs are rising by 8 to 10 percent annually. 
This level of inadequate funding is unfair to the 170,000 Medicare 
beneficiaries in Massachusetts who have selected private health plan 
options. I am a strong supporter of the wonderful health plans we have 
in Massachusetts--Harvard, Tufts, Blue Cross/Blue Shield, and Fallon 
Community Health Plan. We must step up to the plate to help these 
plans--nonprofit plans in my State--in their time of need.
  The Schumer-Santorum-Kerry amend
ment takes important steps to address this problem. By providing 
funding now to stabilize existing private health plan options for 
Medicare beneficiaries, we can help ensure that the proposed Medicare 
Advantage Program will be successful in the future. Our amendment lays 
the groundwork for successful long-term efforts to provide 
beneficiaries with high-quality health care choices.
  As the Senate continues to debate changes in Medicare, it is 
important for us to remember that, for more than 4.5 million Medicare 
beneficiaries across America, Medicare+Choice is an essential program 
that provides high-quality, comprehensive, affordable coverage that is 
not always available, or affordable under the Medicare fee-for-service 
program. These seniors and disabled Americans have voluntarily chosen 
to receive their health coverage through Medicare HMOs and other 
private sector plans because they recognize the value they offer.
  Seniors in Massachusetts have come to rely on the high-quality health 
care they receive through their Medicare+Choice plans. Prescription 
drugs coverage, disease management services, physician exams, vision 
benefits, and hearing aids are examples of the additional benefits that 
are routinely offered by their Medicare+ Choice plans.
  These additional benefits are valued by all seniors, but they are 
particularly important to low-income seniors who cannot afford other 
Medicare supplementary plans that might provide them such benefits but 
at a greater cost.
  As the Medicare debate moves forward, it is important for Congress to 
remember that Medicare+Choice serves as a vital safety net for many of 
our Nation's most vulnerable seniors. For millions of beneficiaries who 
cannot afford to purchase a Medigap policy, Medicare+Choice is their 
only hope for obtaining comprehensive health coverage.
  The Schumer-Santorum-Kerry amend
ment focuses on protecting this important option for seniors who have 
nowhere else to turn for the quality health coverage they need. I urge 
my colleagues to support the additional funding that is urgently needed 
to strengthen the Medicare+Choice Program for seniors. This should be 
among our highest priorities in this year's Medicare debate.
  Mr. CARPER. Mr. President, when I ran for the U.S. Senate, I promised 
Delawareans that I would work in a bipartisan fashion to provide a 
Medicare prescription drug benefit for our Nation's seniors. I pledged 
that I would seek consensus around what is right with competing 
Republican and Democratic plans. Along with my Democratic colleagues, I 
would support voluntary coverage that is available and affordable for 
all seniors. Along with my Republican colleagues, I would support 
choice and competition to constrain costs. And to the extent we found 
ourselves constrained by limited resources, I would seek to provide the 
greatest assistance to those with the greatest needs.
  The bill before us today achieves some of that vision. It is 
bipartisan. It will provide a benefit available to all seniors on a 
voluntary basis. It will harness market forces to strengthen the 
integrity of the Medicare Program for the future. And it will provide 
comprehensive health security to our most vulnerable, low-income 
seniors.
  Still, the bill we have before us today is not everything I would 
have hoped for. The overriding priority of the current majority here in 
Congress has been to make dramatic reductions in Federal revenues 
without corresponding reductions in Federal spending. As a result, 
there is insufficient money in the budget under which we are currently 
operating to provide the kind of comprehensive coverage that all 
seniors--not just low-income seniors--truly deserve. This is an 
unfortunate choice of priorities, I think, but it is the choice that 
this President and this Congress have made.
  Unfortunately, the consequences of the majority's misguided 
priorities are evident in this legislation. When Medicare was created, 
the idea was to provide seniors with health coverage that was similar 
to the coverage available to most working Americans through their 
employers. This is what seniors expect when we say that we are 
providing them with a Medicare prescription drug benefit. However, the 
majority has only set aside for this bill about half of what it would 
take, according to the Congressional Budget Office, to provide seniors 
a benefit comparable to standard employer-provided coverage. Thus, 
there is a very noticeable gap in this bill's coverage, reflective of a 
substantial hole in our Nation's budget.
  When seniors reach $4,500 in prescription drug costs, the coverage in 
this bill gives out. It does not kick back in until total spending 
reaches $5,800. It is widely acknowledged that this makes no sense. It 
makes no sense from an insurance perspective. It certainly is not 
reflective of the standard either in private employer-provided coverage 
or in the coverage provided to those of us who are fortunate enough to 
serve as Members of Congress. Nobody likes this gap in coverage. 
Nobody, so far as I can tell, defends it. However, because the root of 
problem is the majority's failure to set aside sufficient resources for 
this program, efforts to deal with the problem have only created new 
and potentially more serious difficulties.
  For example, the authors of this legislation have attempted to narrow 
the coverage gap by not allowing employer contributions to count 
towards the calculation of seniors' out-of-pocket spending in the gap. 
To see how this works, we need to understand how the coverage gap 
works. Once seniors reach $4,500 in total drug costs, they fall into 
the coverage gap. They then have to spend a certain amount of their own 
money--in the final bill reported out of the Finance Committee it is 
$1,300--before their coverage resumes, or they get out of the coverage 
gap.
  The effect of not allowing seniors to count payments made by their 
retiree health plans toward this out-of-pocket requirement is to ensure 
that seniors will remain in the gap longer and fewer will get out of 
it. This allows the level of spending at which the gap ends to be set 
at a lower level than would otherwise be possible for the same 
budgetary cost. The problem with this, however, is that it also 
provides an unintended incentive for employers to drop or scale back 
their retiree drug coverage.
  Thankfully, contributions from State prescription drug plans, like 
our Delaware Pharmacy Assistance Program, count toward the out-of-
pocket requirement, which should encourage

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States to ``stay in the game.'' Employers, though, are effectively 
barred from wrapping their coverage around Medicare in the way that 
would be most beneficial for their retirees, which would be by filing 
Medicare's coverage gap.
  In the course of our consideration of this legislation here on the 
floor of the Senate, I have urged my colleagues to address these 
shortcomings in the bill, even if that means reconsidering the 
majority's budget plan and the resource allocation for this program. I 
supported an amendment by Senator Boxer to eliminate the gap in 
coverage. And I cosponsored an amendment offered by Senator Rockefeller 
to allow employer-provided coverage to wrap around the Medicare benefit 
and thus to eliminate the incentive for employers to drop coverage for 
their retirees.
  The majority has made clear, however, that they are unwilling to 
reorder their priorities or to emplore the possibility of finding the 
necessary resources elsewhere in the budget to fix what they 
acknowledge are shortcomings in this legislation. Thus, the rest of us 
are left to choose between a prescription drug benefit that provides 
some, but not all, of the assistance that seniors deserve, or no 
prescription drug benefit at all.
  Congress has been debating this issue for more than a decade. In many 
ways, it has been debating the issue since Medicare was first created 
back in 1965. I ran for the Senate in part because I was frustrated at 
the inability or unwillingness of the parties in Washington to come 
together to do what they could to solve problems and get things done. I 
am unwilling to walk away from the table this year with nothing for 
Delaware's seniors. They have waited too long and the need is too 
great.
  In light of the budgetary priorities of the Republican majority, I am 
also very concerned about our future prospects. Should we let the 
present opportunity pass us by? I am concerned that if we do not act to 
get started with prescription drug coverage this year, even the limited 
resources that now remain may go out the door for other purposes--most 
likely another round of top-heavy, upper bracket tax cuts.
  This is a first step. It is a downpayment. Just as I pledged when I 
ran for the Senate to work in a bipartisan fashion to get results, I 
pledge today to continue to work to build on these results. I continue 
to believe that we should provide our seniors with quality coverage 
without caps or gaps. I will work to ensure that filling the gap of 
coverage that exists in the present bill is given greater priority in 
future budgets than it was in this year's Republican budget. I also 
believe that it is a mistake to shun rather than welcome employer 
efforts to wrap around the new Medicare benefit, and I will work to 
rectify that mistake as we move toward implementation of this program 
over the next few years.
  Mr. President, it is often said that politics is the art of the 
possible. The bounds of the possible are a bit narrower now than they 
need, thanks to our Republican friends. But, as the ranking member of 
the Budget Committee has said, this may be the best bill that could be 
written under the constraints of the Republican budget. For that 
reason, I commend the authors of this legislation--Chairman Grassley 
and Senator Baucus, among others--for their work. I urge my colleagues 
to support this compromise as an important, if limited, first step 
toward addressing what clearly is a pressing priority, not just for our 
elderly population, but for our Nation as a whole.
  Mr. JEFFORDS. Mr. President, as we debate the Prescription Drug and 
Medicare Improvement Plan of 2003, I would like to take a few minutes 
today to speak in support of the overall bill, but I would also like to 
highlight several provisions in the bill that are of particular 
importance to me and my State of Vermont.
  Over the last several days, we have focused much of our discussion on 
the aspects of this bill related to prescription drugs and the Medicare 
Advantage Program. These are clearly among the most important 
provisions of this bill and these issues warrant the attention and 
debate they are receiving. I especially appreciate the close 
relationship this bill has to last year's tripartisan effort--which 
effectively is the parent of the current bill Last year, my friends--
Senators Grassley, Snowe, Hatch, and Breaux--and I set out to design a 
bill that provided a prescription drug benefit along with other 
improvements, what we called ``enhancements,'' to the basic operations 
of the Medicare Program. The tripartisan bill was good legislation--
something all of its original cosponsors were very proud to work on 
together.
  This year, I am pleased to say that the Grassley-Baucus bill is even 
better than our effort from last year, and I commend Chairman Grassley 
and Ranking Member Baucus for their leadership and initiative in 
bringing it to the Senate floor.
  One of the most important reasons that the Prescription Drug and 
Medicare Improvement Act is stronger than the tripartisan plan from 
last year is because it includes provisions that begin to resolve 
longstanding inequities in payments to rural doctors, hospitals, and 
other provisions. This problem can be stated simply. Rural health care 
providers are paid less than providers in more densely populated areas 
for the same exact services. Earlier this year, I joined with my 
colleagues, Senators Hatch, Grassley, Lincoln, and Bingaman, in 
introducing the legislation that addressed geographic inequities for 
physician services by changes to the physician reimbursement formulas.
  As many of our colleagues are aware, Senator Grassley fought to 
include these rural provisions in the recent tax bill that was signed 
by the President. And although I strongly disagreed with enacting 
further tax cuts, I was doubly disappointed to see the rural health 
provisions stripped out in the conference with the House. These unfair 
geographic differences in reimbursement rates have gone on far too 
long, and I am especially pleased to see reimbursement issues for rural 
providers getting the attention they deserve--including the commitment 
from the President to my friend from Iowa pledging his support for 
rural health relief as part of the effort we have underway. I am, 
therefore, very pleased to see that these provisions are included in 
the chairman's mark and are now part of this bill.
  I am also glad that Chairman Grassley and Ranking Member Baucus have 
worked with me to address another inequity in the system. Critical 
access hospitals provide care in the most remote regions of my State of 
Vermont and all other rural States. These hospitals are small, yet 
serve as critical resources to their communities. The managers have 
agreed to include a provision in their amendment that will make a 
technical correction to current law, allowing hospitals like the Mt. 
Ascutney Hospital in Windsor, VT, to expand access to psychiatric and 
rehabilitative services to the most vulnerable citizens in that 
community.
  I would also like to speak today in support of a provision in this 
bill that establishes Medicare demonstration programs to improve health 
care quality. I heard my friend from Montana speak yesterday about 
quality and geographic disparities, and I know how committed he is to 
improving the quality of services delivered under Medicare. Earlier in 
this Congress, I was pleased that Senators Frist, Breaux, and Gregg 
joined me in introducing S. 1148, the Medicare Quality Improvement Act. 
I want to thank Chairman Grassley and Ranking Member Baucus for 
including this provision in this bill.
  I became concerned about the issue of health care quality after 
reading the work of Dr. Jack Wennberg of Dartmouth, which has shown 
that higher levels of Medicare spending do not lead to better health 
outcomes. Let me repeat this finding. Higher levels of Medicine 
spending do not lead to better health outcomes. Instead, spending tends 
to vary by region--generally reflecting the availability of physicians 
and hospitals--rather than the health or needs of the population.
  I have followed Dr. Wennberg's work for a very long time. One of his 
early

[[Page 16695]]

studies looked at rates of surgical procedures at Vermont hospitals. He 
found that communities in Vermont that had many more medical procedures 
were not necessarily healthier. I saw how this result led Vermont 
health care providers to join with the business community in achieving 
high quality, supportable outcomes. I also saw how our State government 
used this effort to improve health care across our State. Today, I am 
happy to say that Vermonters enjoy some of the highest quality health 
care in the United States, at a cost that is among the lowest in the 
country.
  As we prepare to vote for the bill before us, I think it is 
critically important for us to consider some of the lessons learned 
from Vermont. Some of my colleagues have expressed concern about the 
costs of the bill before us. Others have expressed concern that the 
bill does not go far enough. The quality demonstration program in this 
bill will give us some of the answers we need to these funding 
questions.
  The need for these demonstrations is critical. RAND Health published 
a study today in the New England Journal of Medicine that describes the 
problems with overuse and underuse of needed medical care services in 
the United States. The RAND study will make it clear that every 
American is at risk--not only for failing to receive needed medical 
care, but also for receiving care that is not needed and may even be 
harmful. This is a problem that belongs to each and every one of us, 
and we must find ways to fix it.
  The legislation before us closes a significant gap in the health 
benefit package available to our Nation's seniors. However, providing 
coverage for health care services is not enough. We must do a better 
job of ensuring that people are getting the care they need, and also 
that they need the care they get.
  In closing, I would like to urge my colleagues from both sides of the 
aisle to support this bill as we move forward. This bill will establish 
a drug benefit that is universal, comprehensive, affordable, and 
sustainable. This bill restores necessary and long-needed fairness to 
our physicians and providers in rural areas. And, the bill will improve 
the quality of care offered under Medicare.
  Mr. DORGAN. Mr. President, over the last 2 weeks the Senate has 
debated the most significant changes to the Medicare Program since it 
was created in 1965. Today, we passed this legislation by a 76 to 21 
vote, and I would like to take a few minutes to explain why I supported 
this bill.
  This bill will, for the first time, provide the option of modest 
prescription drug coverage for nearly 39 million Medicare 
beneficiaries, including about 103,000 beneficiaries in North Dakota. 
It is also intended to give Medicare beneficiaries more choices of 
health plans. And it takes significant steps towards equalizing the 
Medicare payments that rural health care providers receive, compared to 
their urban counterparts.
  There is no question that, if Medicare were being created today, it 
would include prescription drug coverage. Prescription medicines are a 
vital part of modern medicine. Last year alone, pharmaceutical 
companies introduced 26 new prescription medicines into the 
marketplace. But these advancements in medicine mean little if 
Americans cannot afford to access them. That is especially true for 
senior citizens who have reached their declining income years.
  For years now, Congress has been debating proposals to add a 
prescription drug benefit to Medicare. Unfortunately, however, in past 
years we have not been able to reach agreement on just how to do this. 
With each passing year, older Americans continue to struggle to pay for 
their medicine. In North Dakota, about 48,000 Medicare beneficiaries 
have no prescription drug coverage, and many more have limited drug 
coverage. I hear from North Dakota seniors regularly who tell me that 
they have to choose between taking the medicines their doctor 
prescribed for them and other necessities such as food and heat.
  These older North Dakotans say that they want and need Medicare drug 
coverage, and they want and need it now. If Congress doesn't enact 
legislation this year, chances are that several more years will go by 
before there is another serious opportunity to consider this issue. In 
other words, we could pass the legislation before the Senate today or 
we could do nothing for yet another year. In my judgment, doing nothing 
is not an option.
  The prescription drug benefit in this bill is not as helpful to 
seniors as I would like or as generous as I think Medicare 
beneficiaries deserve--but it is a start.
  Frankly, I think our budget priorities have been wrong. If I had my 
way, Congress would have reduced the size of the tax cuts for the very 
wealthy and instead set aside more money for improving and modernizing 
Medicare. During the Senate's debate earlier this year on the budget, I 
offered an amendment to set aside a total of $620 billion over the next 
10 years for a Medicare prescription drug benefit. This is the amount 
of funding I felt was needed to provide a more generous and reliable 
benefit. Unfortunately, the majority in the Senate rejected my 
amendment, so we are limited to a package of just $400 billion over 10 
years. When you consider that Medicare beneficiaries are projected to 
spend $1.8 trillion on prescription drugs over the next 10 years, it is 
impossible to develop a robust benefit within the $400 billion budget 
constraint, in my judgment.
  The benefit provided for in this legislation is better than that 
which President Bush proposed in several key respects. Most 
importantly, this bill will not force seniors to leave the traditional 
Medicare Program--and the doctors they depend on--in order to get the 
prescription drug coverage they also need. I could not support a bill 
that coerces seniors out of the traditional Medicare Program that 
virtually all of North Dakota's Medicare beneficiaries rely on.
  In addition, this bill provides extra assistance above the basic drug 
benefit for those older or disabled beneficiaries who have low incomes 
or very high drug expenses. Medicare beneficiaries with incomes below 
about $14,400 for individuals and $19,400 for couples--about 40 percent 
of North Dakota's beneficiaries--would qualify for extra assistance. 
And those with the highest drug costs--totaling more than about 
$5,800--would qualify for the catastrophic drug coverage. About 7 
percent of North Dakota Medicare beneficiaries would reach this 
threshold.
  Despite these improvements over the President's proposal, there are 
other concerns that I worked to address during the Senate's debate. In 
some instances, we were able to make changes to address these concerns, 
and in other cases, those efforts were rejected. In those instances 
where concerns still exist, I intend to continue working to fix them in 
conference with the House of Representatives.
  For instance, as I have already mentioned, I am concerned that this 
coverage is not as generous as it should be, and in fact, there are 
some holes in the coverage. Under this benefit, seniors will have to 
reach a $275 deductible before their Medicare drug coverage starts. In 
addition, seniors whose drug expenses reach $4,500 will have to pay 100 
percent of their drug costs between $4,501 and $5,800. Then, when their 
drug spending reaches $5,800, the catastrophic drug coverage will kick 
in and Medicare will pay 90 percent of their drug expenses after that. 
This means that there could be periods--in some cases as much as 3 
months--when Medicare beneficiaries will have paid a premium for drug 
coverage but will be getting no benefit.
  That makes no sense to me. No other insurance plans that I am aware 
of include such gaps in coverage. I supported various amendments on the 
Senate floor to close these coverage gaps or at least ensure that 
seniors don't have to pay premiums for the periods when they aren't 
receiving coverage. Regrettably, however, those efforts were rejected.
  I am also concerned that rural Medicare beneficiaries may not receive 
a benefit that is as stable or as generous as other beneficiaries 
receive. This bill envisions that seniors will basically have two 
options for receiving drug

[[Page 16696]]

coverage. First, this bill creates a new Medicare Advantage Program 
through which beneficiaries could choose to get their drug coverage, as 
well as the rest of their medical care, through an HMO or a PPO. 
Frankly, however, I am very skeptical that HMOs or PPOs will want to 
serve rural areas, and even if they do, I don't think most North Dakota 
beneficiaries will want to leave the traditional Medicare Program.
  Those seniors who want to remain in the traditional Medicare Program 
will be able to do so and get their prescription drug coverage through 
private ``drug only'' insurance plans. Budget experts estimate that 
Medicare beneficiaries who sign up for these drug-only plans will pay 
an average monthly premium of about $35. However, this is only an 
estimate, and the actual premium that seniors pay could vary 
substantially from area to area. That is already the case in the 
current Medicare HMO program--for instance, a Medicare HMO with drug 
coverage currently charges $99 per month in Connecticut and only $16 a 
month in Florida. I am worried that it would be rural seniors who would 
pay the highest premiums, even though they paid the same Medicare 
payroll taxes as other beneficiaries.
  To address this concern, I supported an amendment by Senator Daschle 
that would have limited the variation in premiums to only 10 percent 
above the national average, no matter where beneficiaries live. In 
other words, insurance companies could charge beneficiaries a lower 
premium but they couldn't charge them more than 10 percent above the 
national average. Unfortunately, however, Senator Daschle's amendment 
was rejected.
  In areas where there are not at least two private drug-only plans 
offered to Medicare beneficiaries in any given year, Medicare would 
step in and ensure that there is a ``fallback'' plan available. This is 
a vital guarantee for beneficiaries in rural States like North Dakota 
where I believe it is unlikely that there will be two stable drug-only 
plans available. But even with this fallback plan, seniors could still 
be bounced back and forth between different plans, depending on how 
private plans move in and out of an area.
  I supported an amendment that would have addressed this concern by 
allowing all Medicare beneficiaries to choose the fallback option, no 
matter how many private plans are available where they live. When that 
amendment failed, I cosponsored an amendment with Senator Conrad that 
would at least allow seniors who have the fallback option to remain in 
that plan for 2 years, not just 1 year. That amendment was also 
rejected.
  Even though this bill doesn't require Medicare beneficiaries to leave 
traditional Medicare, I know there are some concerns that Medicare 
beneficiaries will be getting their drug coverage through private 
plans. I, too, would strongly have preferred that all seniors be able 
to choose from a Medicare-administered benefit.
  However, let me say this if I felt that by structuring the drug 
coverage the way it is in this bill, we were undermining the entire 
underlying Medicare Program, I would not support it. Medicare has been 
a wonderful success, and in our efforts to modernize it, we should 
exercise extreme caution not to undermine it. However, virtually all of 
the major Medicare prescription drug proposals would have used a 
private entity in some way to provide the drug benefit. Indeed, the 
traditional Medicare Program currently contracts with private insurance 
companies to pay the millions of Medicare claims that come in each 
year. Furthermore, the Congressional Budget Office estimates that only 
1 to 2 percent more beneficiaries will choose the new Medicare 
Advantage option, so it seems clear that the vast majority of seniors 
will continue to rely on the traditional Medicare Program for the bulk 
of their medical care.
  One area where we had some success in improving the bill during the 
Senate's debate is in the area of reducing drug costs. This bill relies 
largely on private insurance companies to negotiate lower drug prices. 
However, we have seen from prior experience that insurance companies 
have not been able to keep drug spending from increasing by nearly 
double digits every year 9.7 percent in 2002, 17 percent in 2001, 18.8 
percent in 2000, and 16 percent in 1999.
  To help put downward pressure on drug prices, I offered an amendment 
that was passed by the Senate by a 62-to-28 vote to allow for the 
reimportation of lower-priced, FDA-approved medicines from Canada. As 
many North Dakotans know first hand, the same FDA-approved prescription 
drug that costs $1 in the United States costs only 62 cents in Canada, 
even though it is the exact same drug, in the same bottle, made by the 
same manufacturer.
  It is not my intention with this amendment to require Americans to go 
to Canada in order to get lower drug prices. Rather, by allowing U.S. 
licensed pharmacists and drug distributors to do the importing for 
them, Americans can stay at home, and by breaking the monopoly that the 
drug companies currently have on drug pricing in this country, we will 
force a repricing of drugs here in the United States.
  I also supported an amendment that will help to make more affordable 
generic drugs more readily available. Generic drugs are safe, 
effective, and lower priced alternatives to heavily advertised brand-
name prescription drugs. Unfortunately, however, some of the big brand-
name drug companies use loopholes in the patent laws to keep generic 
drugs off the market for longer than intended. This amendment, which 
passed the Senate by a 94-to-1 vote, will close these loopholes and 
thereby speed consumers' access to generic medicines.
  I am also pleased that this bill improves Medicare's coverage of 
preventive services, especially by including a provision that I 
authored to provide for a cholesterol screening benefit for Medicare 
beneficiaries. I have felt for a long time that Medicare needs to do a 
better job of preventing disease, rather than just paying to treat it. 
In the case of cholesterol screening in particular, high cholesterol is 
one of the major, changeable risk factors for heart attacks, stroke and 
other cardiovascular diseases. Yet when Americans turn 65 and enter the 
Medicare Program, their coverage for cholesterol screening stops unless 
they already have cardiovascular disease. That makes no sense, and I am 
glad the Senate has taken steps to provide this coverage.
  Finally, I am very happy that this bill includes a range of 
provisions that will make Medicare reimbursement more fair and 
equitable for our rural hospitals, physicians, and other health care 
providers. It is simply not right that Medicare has historically 
reimbursed urban health care providers at a much higher rate than their 
urban counterparts. This inequity in Medicare reimbursement has very 
real consequences for hospitals and clinics in rural States like ours. 
They have to reduce services, have greater difficulty recruiting staff, 
are less able to make capital improvements, struggle to give their 
patients access to the latest innovations in medical care, and in same 
instances, they even have to close.
  I have been fighting for a long time to correct this inequity. In 
fact, some of the provisions in this bill are similar to legislation 
that I introduced in the Senate earlier this year, and I am glad they 
have been included in this bill.
  I know there will be some who feel that this bill should have been 
rejected by the Senate because it relies too heavily on private plans 
and others because it does not place enough emphasis on enrolling 
seniors in private plans. Others will feel that the Medicare benefit is 
not generous enough, and some feel its coverage is too liberal. I agree 
that this legislation isn't perfect--far from it, in fact. In the 
coming months and years, I will continue working to improve it. But it 
is a start in the right direction, and that is why I have supported it.
  The House of Representatives is also expected to pass its version of 
Medicare legislation this week. The House and the Senate will now need 
to have a conference committee to work out the differences between the 
two bills. I have some serious concerns about the

[[Page 16697]]

House-passed bill. I hope these concerns and the concerns that I have 
with the Senate bill can be resolved in the final bill, so that we can 
send a bill to the President for his signature this year.
  Mr. SARBANES. Mr. President, I rise today to speak on S. 1, the 
Prescription Drug and Medicare Improvement Act of 2003. I applaud my 
colleagues in working toward enactment of legislation to provide 
prescription drug coverage under Medicare. However, I am deeply 
concerned that the bill before us today would not ensure an affordable, 
guaranteed benefit that would cover seniors' outpatient prescription 
drug expenses.
  Under this legislation, the Secretary of the Department of Health and 
Human Services would temporarily issue prescription drug discount cards 
for seniors until the drug benefit begins in 2006. At that time, all 
Medicare beneficiaries would receive a standard prescription drug 
benefit whether they remained in traditional fee-for-service or in a 
private plan. For a $275 deductible and an estimated $35 per month, 50 
percent of a beneficiary's drug costs would be covered up to $4,500. A 
beneficiary would receive no coverage for drug costs between $4,501 and 
$5,800, though they are still responsible for paying the monthly 
premium during this coverage gap. Furthermore, any assistance provided 
by employer-sponsored plans or third parties on behalf of the 
beneficiary does not count toward the out-of-pocket costs. After drug 
expenses reach $5,801, the plan would cover 90% of drug expenses.
  The bill creates a new Medicare Advantage program, which would 
replace Medicare+Choice, and create a new agency, the Center for 
Medicare Choices, CMC, with authority parallel to the existing Centers 
for Medicare and Medicaid Services. The CMC would administer the 
Medicare Advantage program and the prescription drug plans. The drug 
plans would be administered through private plans, but when no private 
plans exist, the government would provide a fallback plan for seniors 
in fee-for-service. However, if a new private plan decides to enter an 
area, beneficiaries would again be forced to receive their coverage 
through that plan.
  If this sounds terribly confusing, it is. One hundred Senators and 
their staffs found it difficult to work through this bill and 
understand exactly how the benefit would work. Seniors who don't sign 
up as soon as they are eligible are subject to a penalty similar to the 
penalty imposed on those who delay enrollment in Part B. It is unfair 
to expect seniors and their families to work through this web to make 
an informed decision.
  The complexity of this drug plan is only one of numerous flaws with 
this bill. S. 1 does not provide a national fixed premium. The bill 
sets out an estimate of a $35 monthly premium, but there is no 
guarantee for seniors that they will not have to pay much more than 
that estimate.
  The bill has the serious potential to cause a number of retirees to 
lose existing employer-sponsored prescription drug coverage. CBO 
estimates that as many as 37 percent of Medicare beneficiaries would 
lose existing coverage. This is an unacceptable consequence of 
legislation that is supposed to make life easier for seniors. This 
serious deficiency is the number one concern of constituents who have 
called into my office about this bill.
  The bill before us leaves a large gap in coverage and forces seniors 
to continue premium coverage during that gap period. Seniors may have 
to face months without any assistance, waiting to reach the limit where 
catastrophic coverage begins. The seniors who fall into this coverage 
gap are among the most ill, with severe chronic conditions and 
prescription needs. It is difficult to support legislation that would 
cease coverage for prescription drugs for seniors at the very time when 
it is needed most.
  Finally, because this proposal relies on private plans to deliver the 
drug benefit, seniors could be forced to shift from plan-to-plan, year-
to-year as they did when Medicare+Choice HMOs pulled out of the 
Medicare program a few years ago. In my own State of Maryland, 
insurance companies left the Medicare program, abandoning more than 
100,000 seniors.
  This legislation makes our Nation's seniors the subject of an 
experiment to which none of us should be willing to subject our parents 
and grandparents. We don't know what the benefit is under this bill. We 
don't know how much it will cost. We don't know how private plans will 
participate and make a profit. We don't know how many seniors would 
lose existing coverage. What we know is we are prepared to spend 
approximately $400 billion over 10 years to create an inadequate drug 
benefit, a new bureaucracy, and subsidies for private insurance 
companies.
  With modest additional resources, we could have closed the coverage 
gaps in this bill. Amendments offered by my colleagues to provide 
stability for seniors, move up the start date of the drug benefit, 
eliminate beneficiary premiums during the coverage gap period, and 
improve a variety of shortcomings have been defeated. We have lost so 
many opportunities to make this bill something all Medicare 
beneficiaries can support. I am hopeful that in the future we can 
improve upon this and create a system that is easier for seniors to 
understand, more affordable, and more reliable than what is offered 
today.
  I want to highlight one amendment that would have provided Medicare 
beneficiaries with a substantial, reliable and straightforward 
prescription drug benefit. I cosponsored and voted for this amendment 
offered by my colleague from Illinois, Senator Durbin. His alternative 
would have provided a Medicare-delivered drug benefit that allows the 
Secretary of HHS to employ negotiating strategies used by the VA and 
other government entities to bring down drug prices. Under Senator 
Durbin's plan, seniors would have no deductible, pay only 30 percent of 
costs until reaching the catastrophic limit, and face no coverage gap. 
In addition, employer contributions would count toward out-of-pocket 
limits so there would be much less risk of employers dropping retiree 
coverage. This was the proposal we should be working from today, but 
unfortunately the Durbin alternative was defeated by a vote of 56 to 
39.
  Those opposed to providing a richer benefit argue we don't have the 
money. The selective amnesia of these so-called fiscal conservatives is 
baffling. Not too long ago, this body passed a tax cut that primarily 
benefited the wealthiest Americans. Where was their sense of fiscal 
responsibility then? As my colleagues Senators Durbin and Harkin noted 
yesterday, this is about priorities. I'm sure others have raised this 
very good point as well. We can risk greater budget deficits to give 
huge tax cuts to Americans who are already prospering, but we cannot 
provide the necessary resources for millions of Medicare beneficiaries 
to get an affordable, reliable drug benefit that they can understand?
  I have long been a strong supporter of providing older Americans and 
disabled individuals who rely on Medicare an affordable, comprehensive, 
reliable and voluntary prescription drug benefit. However, I want to 
ensure we do so in a way that does not worsen the situation in which 
many seniors find themselves as they face rapidly rising drug costs. As 
we consider proposals to expand our Nation's major health entitlement 
programs, it is appropriate to follow a guiding principle in the 
practice of medicine--do no harm. Our seniors deserve a drug benefit 
that is a real improvement, not a complex experiment that may cause 
more trouble than it's worth. We must not enact a law intended to help 
that might eventually harm millions. The American people deserve 
better.
  Mrs. BOXER. Mr. President, for over 35 years, Medicare has been a 
savior for our senior citizens. It has helped pay their doctor bills, 
their hospital bills, and their home health bills.
  But it has not paid for their prescription drug bills, and millions 
of seniors across the country have been waiting a long time for the day 
when prescription drug coverage is offered through Medicare. That day 
is getting closer.

[[Page 16698]]

  I am supporting--and the Senate will soon pass--a Medicare 
prescription drug benefit.
  Let me tell you why this is important. In California, four million 
people are enrolled in Medicare. Every day, far too many of them are 
forced into the difficult choice of paying for their prescriptions or 
putting food on the table.
  I want to tell you a few of their stories.
  I recently heard from a California woman who told me she struggles to 
survive on $950 a month income. She cannot, she says, afford all of her 
prescription drugs. She is, unfortunately, all too typical.
  A constituent from San Marcos, CA told me that her annual costs for 
prescription drugs this year will top $10,000.
  Another constituent from Indio, CA told me that she has made five 
trips to Mexico over the last several years to purchase her 
prescriptions. She drives all day long to Mexico in order to purchase 
affordable heart medication. She wanted me to remind my colleagues that 
``thousands of seniors are forced to do this.''
  A retired physician from Marina Del Rey told me that a pill he takes 
for his heart disease has gone up 600 percent from $15 per month to 
$85.
  These seniors--all of our seniors--need and deserve to have Medicare 
help pay for their prescription drugs. We need to end this situation 
where seniors are cutting their pills in half or forgoing their 
medications altogether or skipping meals in order to pay for their 
prescription drugs. That is unacceptable.
  Today, we are making a prescription drug benefit a part of Medicare. 
And that is why I am supporting this bill--because, at long last, it 
puts a Medicare prescription drug benefit on the books.
  But, this bill is wanting. It has problems. And I have voted for 
amendment after amendment to fix those problems.
  I offered an amendment to close the benefit shutdown. Under this 
bill, even when seniors have paid and continue to pay premiums, 
Medicare stops covering prescription drugs, forcing seniors to pay the 
entire cost. When that failed, I offered an amendment to ensure that 
seniors with cancer would never have their benefit stopped.
  I supported an amendment by Senator Stabenow to ensure that all 
seniors could get prescription drug coverage from Medicare itself--the 
tried and proven system--rather than from a private insurance company.
  I supported an amendment by Senator Graham to stop charging seniors 
premiums when they are not getting any benefits.
  I supported an amendment by Senator Lautenberg to start this benefit 
next year not 2 and a half years from now.
  I supported an amendment by Senator Dodd to encourage employers not 
to drop their retiree health coverage so seniors who have good coverage 
can keep it. And the Levin amendment, which I also supported, would 
have ensured that if employers did drop such coverage, Medicare would 
be there to provide prescription drugs.
  I supported an amendment by Senator Dorgan to reduce the premiums 
that beneficiaries must pay each month. And I supported an amendment by 
Senator Daschle to limit the disparities in premiums so that seniors in 
different parts of the country are not paying different premiums for 
the same benefit.
  These amendments would have made the Medicare drug benefit a better 
drug benefit for seniors. Unfortunately, none of them passed.
  But we should not--and I will not--stop trying to make it the best 
benefit it can be.
  The good news is that Medicare will soon, for the first time ever, 
cover prescription drugs. The better news will be when we fix the 
problems with this bill and improve the coverage for our seniors. I 
look forward to the day when enough of my colleagues will join me in 
that effort.
  Finally, let me say that I hope the conference report on this bill--
the final version of the bill before it goes to the President--does not 
come back to the Senate in a way that would provide even less help to 
seniors or in a way that would undermine the entire Medicare program.
  Ms. MIKULSKI. Mr. President, senior citizens are facing a crisis--a 
crisis in affording health care and a crisis in affording prescription 
drugs.
  I have been in communities all over Maryland. Listening to seniors 
who are desperate. Listening to their families in the diners--who want 
to help their parents, yet face stresses of their own. Listening to the 
employers in the boardrooms--who want to help their retirees, but can 
no longer afford to.
  Here is what they tell me. They say: We need a prescription drug 
benefit in Medicare. We need a safety net for seniors and families. 
Congress must enact a Medicare prescription drug benefit, and must do 
it now.
  I absolutely agree. It is time Congress made Medicare prescription 
drug coverage a national priority.
  For so many years, Congress has talked about prescription drugs and 
Medicare. Talk, talk, talk. You can't talk yourself out of high 
cholesterol; you need Lipitor. You can't talk your way out of diabetes; 
you need insulin.
  The problem with the Senate is--when all gets said and done--more 
gets said than gets done. Finally--the Congress is acting.
  Here are my principles. These principles are the yardstick by which I 
measure any proposal.
  The benefit must be for seniors, not for insurance companies. That 
means the cornerstone must be Medicare. This bill does that. It does 
not force seniors to give up the Medicare they love to get the drugs 
they need.
  It must help the majority of Marylanders. I work for Marylanders. So 
I did the numbers--570,000 Marylanders are on Medicare. According to 
Johns Hopkins, 68 percent of these seniors would benefit from this 
legislation. That means 394,000 would benefit from this bill.
  It must be voluntary. And the answer is, yes, this bill is voluntary. 
No one should be coerced or forced into a private program or forced to 
give up coverage they currently have.
  It must be affordable. I am not so sure. I am concerned about the 
significant deductible--$275 a year and the hefty premiums--almost $400 
a year. It also has a coverage gap. Once you spend $4,500 a year--you 
get no help until you spend $5,800. This will cost too much. That is 
why I supported the Durbin amendment, which would have provided a 
better benefit at less cost to seniors.
  It must be accessible. It must be available to all seniors, 
regardless of where they live. This bill does that.
  It must be meaningful. It must cover the kind of drugs your doctor 
says you need, not what an insurance executive thinks you should get. 
This bill does that by creating a medical necessity override. This 
means your doctor has the final say on which drugs you get, not an 
insurance company. I feel pretty good about that.
  I tried to improve the bill. I voted for amendments to improve the 
bill. For example: For the Durbin substitute which would have created a 
stronger, more comprehensive benefit at a lower cost to seniors.
  For an amendment to get rid of the coverage gap. This would guarantee 
that seniors would have continuous coverage for their prescription drug 
costs.
  For an amendment to provide seniors with a guaranteed prescription 
plan that is under Medicare. This would allow seniors to stay in a 
prescription drug plan that is operated by Medicare and not have to 
move in and out of private plans and a Medicare fallback plan that is 
only available when the private plans leave the market.
  For amendments to protect the benefits of retirees who already have 
drug coverage. These amendments would help employers to continue to be 
able to offer quality health care to their retirees.
  For an amendment to implement the drug benefit next year--instead of 
waiting until 2006 to start these benefits.
  I am sorry all these amendments failed on party line votes.
  This legislation is a beginning. It is something we can build on. 
What it

[[Page 16699]]

comes down to for me is--will it help the majority of seniors in 
Maryland? The answer is, yes; it will help over 394,000 people. For 
people who spend at least $1,110 a year on prescription drugs--it will 
help. For someone who is facing a catastrophic disease like cancer and 
has very high drug costs--it will help. So I will vote for this bill. 
It is not the bill I want. Yet we can't let the perfect be the enemy of 
the good. We can't do nothing--as seniors struggle to pay for the drugs 
they need.
  But let me be very clear, this is as far as I will go. If this bill 
comes back from conference and it is a benefit for insurance 
companies--say goodbye to my vote. If it increases costs for seniors, 
say goodbye to my vote. If it cuts benefits, say goodbye to my vote.
  So I will vote for this legislation tonight because I don't want to 
say goodbye to this opportunity to provide a Medicare prescription drug 
benefit for seniors.
  Mr. HOLLINGS. Mr. President, I rise today in opposition to the 
Prescription Drug and Medicare Improvement Act of 2003.
  The Senate has spent the last 2 weeks debating how to help our 
Nation's senior citizens afford their prescription drugs. The Kaiser 
Family Foundation estimates that average annual out-of-pocket drug 
spending for Medicare beneficiaries grew from $644 3 years ago to $999 
this year and will reach $1,454 by the time this bill takes effect in 
2006. As a result, 25 percent of seniors without drug coverage declined 
to fill a prescription and 27 percent of seniors without drug coverage 
skipped doses to make their prescriptions last longer. This is 
unacceptable. These citizens deserve affordable, comprehensive, and 
reliable drug coverage. Unfortunately, the legislation now before us 
fails to provide sufficient coverage.
  From the outset this proposal will confuse seniors. Enrollees in 
private plans better not get too comfortable because their plans could 
be gone in 2 years if the HMOs find them unprofitable just like they 
have with Medicare+Choice in my state of South Carolina. The same goes 
for enrollees in fallback plans. They will be kicked out of their plan 
in as early as a year if enough private plans enter their area. This 
volatile system could force seniors to move in between three separate 
plans, with three separate formularies, in 3 years. This bill should 
create a sense of stability in the system and reduce the confusion over 
coverage. That is why I supported first the Stabenow amendment and then 
the Lincoln-Conrad amendment, which would have extended the 
availability of fallback plans to ensure that seniors will have access 
to stable drug coverage.
  Senior citizens will need to hire an accountant just to comprehend 
the benefits available to them under this legislation. Once seniors 
select their Medicare drug plan, they will have to maneuver a maze of 
premiums, deductibles and copayments for benefits that contain huge 
gaps in coverage. On top of their premiums, which will vary from region 
to region and plan to plan, seniors will get no help for the first $275 
of their drug costs, pay half of costs from $276 to $4,500, pay all the 
costs from $4,501 to at least $5,813, and then pay a tenth of costs 
above $5,288. With a breakeven point of $1,115, many healthier Medicare 
beneficiaries will opt not to participate. With a coverage gap of 
$1,302, many of the sickest patients will still have to continue paying 
premiums even though they may have to resort to rationing their care 
until they can spend their way out of the ``doughnut.''
  Once again, the Senate defeated a number of amendments that I 
supported that would have brought much needed simplicity and fairness 
to the bill including the Boxer amendment, which would have closed the 
coverage gap for all seniors, and the Daschle amendment, which would 
have limited the regional variation among premiums to 110 percent of 
the national average. Finally, we chose to provide $13 billion in new 
subsidies to PPOs and HMOs instead of using that money to reduce 
premiums or fill in the coverage gap for cancer or Alzheimer's 
patients. All in all, the bill provides Medicare beneficiaries with a 
benefit valued at about $1,000 less than the drug coverage available to 
Federal employees.
  This is a plan only Washington could dream up. It should come as no 
surprise that the authors of this convoluted mess and their friends in 
the White House have decided to wait until after the 2004 election 
before allowing Medicare beneficiaries to see what they are in for.
  I should also note that this Nation is more than $6.6 trillion in 
debt. This bill is part of budget resolution and economic plan that 
will run up an average deficit of $600 billion a year for the next 10 
years. Make no mistake about it, we will borrow every red cent to pay 
for this program. And what do we get in return? Massive subsidies for 
HMOs, spotty drug coverage for senior citizens, and a lack of attention 
to the factors driving the rapid increase of health care costs in this 
country. If we are going to borrow from future generations to pay for 
this benefit, we should get it right.
  Now that we have disposed of all amendments and final passage appears 
imminent, I have concluded taxpayers and Medicare beneficiaries would 
be better served if we go back to the drawing board. We should come 
back with a proposal with affordable premiums and cost sharing 
requirements with no gaps in coverage that is administered in a manner 
that gives seniors the same sense of security they receive under the 
current Medicare program. I have heard many of my colleagues say this 
is an important first step and it is important that we get something on 
the books. Nonsense. Thirty months will pass before the first 
beneficiary receives coverage. That was enough time to draft and ratify 
the Constitution. It was enough time to complete the Manhattan Project. 
Thirty months should be more than enough time for us to create a real, 
meaningful prescription drug benefit for our senior citizens.
  I hope this body will have the wisdom to vote no and do this right.
  Mr. FEINGOLD. Mr. President, I will vote for passage of the Medicare 
prescription drug bill that has been debated over the past several 
weeks.
  I do so, however, with great reservations about many of the 
provisions in the bill.
  I am voting for this measure for two principal reasons.
  First, I believe that we owe our seniors a Medicare prescription drug 
benefit. I believe such a benefit is long overdue for our Nation's 
seniors. For years we have promised them we would give them the crucial 
help they need with their skyrocketing prescription drug costs. And I 
believe that it is finally time to deliver on that promise.
  It has taken Congress too many years to act on this pressing need. We 
have been debating for years about the best way to provide this 
benefit, and I am afraid that if we do not take the opportunity in 
front of us today, it will take us even longer to provide seniors the 
help they deserve. Our seniors cannot wait any longer.
  The costs of prescription drugs are soaring, and the financial toll 
they take on our seniors means that too often seniors must choose 
between eating and taking the medication that will help them live 
productive, healthy lives. Our seniors should not have to make that 
choice. They contributed to the Medicare system over their lifetimes. 
That system, which is supposed to provide health care to all seniors, 
needs to be able to help them obtain the prescription drugs they need 
to preserve their health.
  The second reason I am voting for this benefit is that it takes a big 
step in addressing what I see as one of the biggest flaws of the 
current Medicare system--the geographic inequities within the Medicare 
reimbursement system. We need to end Medicare's continued 
discrimination against Wisconsin's seniors. As I have previously 
discussed on this floor, Wisconsin seniors already receive the short 
end of the stick when it comes to Medicare. Wisconsinites pay the same 
payroll taxes to Medicare as all American workers do, but receive fewer 
benefits in return. Instead, Wisconsinites' Medicare dollars are used 
to subsidize higher reimbursements in other parts of the country.

[[Page 16700]]

  Wisconsin Medicare beneficiaries receive on average $4,318 in 
Medicare benefits per year, the eighth lowest in the country. By 
contrast, beneficiaries in the State with the greatest per capita 
reimbursement receive $7,209. This distribution of Medicare dollars 
among the 50 States is grossly unfair to Wisconsin. I thank the 
leadership of the Finance Committee for including provisions to begin 
to address this inequity in this prescription drug bill. But I know 
that we still have more to do to reverse the Medicare discrimination 
against States like Wisconsin.
  I am pleased that key provisions have been accepted that greatly 
improve this bill. The Senate adopted the Gregg-Schumer-McCain-Kennedy 
amendment, which I was proud to cosponsor and support, which will bring 
more competition to the prescription drug market by preventing 
pharmaceutical companies from blocking generic drugs from entering the 
market. This amendment is one of the only provisions that will help to 
bring cost savings to seniors.
  By adopting Senator Dorgan's amendment relating to the reimportation 
of prescription drugs from Canada, the Senate will help seniors obtain 
affordable prescription drugs. This legislation helps both consumers 
who buy prescription drugs and businesses which sell them. I supported 
this provision, both in its earlier legislative form and in this 
amendment, because it is the right thing to do. Our seniors and other 
Americans in need of affordable prescription drugs deserve no less.
  I also supported Senator Enzi's amendment, which passed 
overwhelmingly, that will make sure that community pharmacies, like the 
ones in my home State of Wisconsin, can still operate within this new 
prescription drug program. Smaller pharmacies will be protected from 
being shut out by larger pharmacies through this amendment, and that 
means helping seniors to access the prescription drugs they need in 
their own communities.
  I also worked with Senator Allard on an amendment to provide 
regulatory relief for home health care providers that the Senate 
adopted. Our amendment enables home health care providers to spend more 
time with patients and less time on paperwork. This is particularly 
important at a time when some home health care providers are leaving 
the home health industry because of burdensome paperwork requirements.
  And I am pleased that an amendment I offered to bring some clarity to 
the Medicare Program for our seniors was adopted. The Medicare Program 
is already full of bureaucratic red tape, often creating barriers for 
seniors looking for basic information about their health care options. 
This prescription drug benefit is the biggest expansion of the Medicare 
Program since its inception in 1965. We are adding an entire new part 
to the program, and we need to help guide our seniors through it.
  My amendment is simple. It establishes a Medicare Beneficiary 
Advocate Office within the Department of Health and Human Services, 
with the sole function of providing clear information to all Medicare 
beneficiaries. The office will serve as a one-stop information source 
on all of Medicare for our seniors.
  This new office will provide a toll-free phone number, a regularly 
updated Web site and regional publications that will give our seniors 
all of the information they need to make informed health care 
decisions.
  That is the good news. But as I said earlier, I have many 
reservations about this bill. This is not the bill I would have 
proposed.
  This bill does not go far enough to deliver on our promise to give 
seniors a meaningful prescription drug benefit. It fails to provide any 
assistance after a senior's prescription drug costs total $3,450, until 
they spend another $1,850 on prescription drugs, or $5,300 total. And 
it adds insult to injury by making beneficiaries continue to pay a 
premium even during the time they receive no benefit.
  I am also troubled that this bill does not provide clear, uniform 
benefits and premiums for all seniors. Many aspects of the benefits 
provided in the bill remain uncertain, and will continue to remain 
uncertain after the plan goes into effect. Under this bill, the 
premiums are not defined. The premiums for the Medicare prescription 
drug plan will be dictated by the private insurers who will offer the 
plans. The only thing we know for sure is that the Congressional Budget 
Office estimates that the national average for premiums will be $35. 
However, those premiums may vary dramatically. Just look at Medicare 
HMO premiums. Medicare HMO premiums in Connecticut are $99, but in 
Florida they are only $16.
  Who will offer the plans is also uncertain. There is no guarantee 
that plans will be offered in regions where there may not be enough 
profit. History again shows us that private companies do not always 
find rural and smaller urban areas profitable enough to move in. All 
too often, private companies that do move into less desirable Medicare 
markets end up deciding to leave the region, leaving Medicare 
beneficiaries scrambling to figure out where they will turn for 
coverage.
  Furthermore, my understanding is that this plan only offers a 
guaranteed Medicare-administered plan, or ``fallback plan,'' if there 
are less than two private plans in a region. This means that, if only 
one private plan offers a prescription drug benefit in the region that 
includes Almena, WI, a Medicare beneficiary living in Almena may 
instead choose the Medicare-administered fallback plan. While on the 
fallback plan, my Almena constituent would become familiar with the 
medications that are included in their formulary and the cost of their 
premiums. If a second private plan subsequently decides to move into 
that region, my understanding is that my constituent will be dropped 
from the Medicare fallback plan, and forced to join one of the private 
plans even if those plans have higher premiums, or do not include their 
prescriptions in their formularies.
  Further, my Almena constituent can be forced to leave the plan that 
he or she has come to know, if that plan leaves the region. This leads 
to instability and uncertainty for seniors.
  Benefits are also uncertain under this proposal. Again, benefit 
packages will be determined by the private insurers who offer the 
plans. And we can assume, from experience with the Medicare+Choice 
Program, that the benefits will vary widely. I am concerned about what 
this may mean for States like my home State of Wisconsin, States that 
have had a difficult time attracting and keeping private Medicare 
plans. Some Medicare prescription drug plans may be able to offer more 
brand name drugs at a lower cost to beneficiaries, while others in less 
profitable areas may limit the amount of brand name drugs they can 
offer at affordable rates.
  I fear that as with Medicare HMOs, Wisconsin seniors may be faced 
with little choice with Medicare prescription drug plans.
  And I am concerned that the uncertainty in this bill regarding 
monthly premiums, the possible differences in benefits packages and the 
stability of private plans that will deliver these benefits may lead to 
more inequity for Wisconsin seniors.
  I was disappointed that Senator Durbin's amendment, the MediSAVE Act, 
was not adopted in the Senate. Senator Durbin's amendment, which I 
strongly supported, would have fixed most of the errors that exist in 
this bill. The MediSAVE Act would have made this benefit one that would 
truly help all seniors with all of their prescription drug benefit. 
Senator Durbin's proposal offered a meaningful, enhanced prescription 
drug benefit that would have covered all seniors regardless of whether 
their prescription drug costs are high, low, or somewhere in between.
  The MediSAVE Act not only put forth cost controls so that taxpayers 
as well as seniors could save money, but it also would have given 
seniors certainty. Seniors would have known exactly what their premiums 
and benefits were and would have the certainty of knowing that a 
Medicare-administered prescription drug benefit would be available to 
them, no matter what private plans were offered to them. Most

[[Page 16701]]

importantly, the MediSAVE Act provided the certainty that a senior 
would have assistance with their prescription drug costs year-round and 
would never be caught in the so-called ``donut hole'' of coverage that 
this bill provides.
  I am voting for this bill because something, some help for our 
seniors with their pressing prescription drug costs, is better than 
nothing. I will support this legislation with the intention of working 
with my colleagues over the next 2 years to improve this bill and 
finally deliver on our promise to give seniors a meaningful 
prescription drug benefit under Medicare.
  Mr. JEFFORDS. Mr. President, this bill is a landmark piece of 
legislation the most significant modernization of the Medicare Program 
since its inception in 1965. Its passage by the Senate is a major 
accomplishment on the path toward enacting a prescription drug benefit 
for our Nation's seniors. It is the result of years of bipartisan, I 
might even say tripartisan, effort and it puts in place many long-
sought changes. It has many significant features for the citizens of my 
home State of Vermont. It provides a sustainable, universal, and 
comprehensive prescription drug benefit. It guarantees access to 
traditional Medicare for all beneficiaries. It allows Medicare 
beneficiaries to participate, if they choose, in new systems of care 
that better reflect today's dynamic health care environment. The bill 
recognizes the high cost of providing quality care in rural settings 
and closes the reimbursement gap between rural providers and their 
urban counterparts. Finally, it contains a provision that will allow us 
to better understand how to provide quality health care--not care 
driven by using more and more resources, but instead one based on 
ensuring quality patient outcomes.
  Over the past 2 weeks, I have applauded the work of my colleagues who 
have labored over this bill. Today, I have the pleasure of 
congratulating them on their success and thanking them for their 
efforts.
  I have worked for more than 3 years with my good friends, Chairman 
Grassley and Senators Snowe, Breaux, and Hatch. In many meetings over 
many months, we delved into the details of what came to be called the 
Tripartisan Bill. This has been one of the finest experiences of my 
many years in Congress. I am very proud to have been a part of that 
group and that our efforts led the way to our success today.
  I especially want to salute the efforts of Senator Baucus and Senator 
Kennedy without whose hard work and commitment to working through an 
agreement we would not have accomplished this remarkable victory, and 
they deserve our accolades.
  A bill such as this is the result of great effort on the part of many 
different people who are not elected to this body, but upon whom we all 
rely. I would like to recognize the staff members who have worked so 
hard on this bill and deserve much of the credit for its successful 
passage.
  On Senator Grassley's staff: Ted Tottman, Linda Fishman, Colin 
Roskey, Mark Hayes, Jennifer Bell, and Leah Kegler, and on Senator 
Baucus' staff Jeff Forbes, Liz Fowler, Jon Blum, Pat Bousliman, Kate 
Kirschgraber, and Andrea Cohen deserve considerable recognition for 
their tireless efforts. Catherine Finley, Tom Geier, and Carolyn Holmes 
from my friend Senator Snowe's staff; Patricia DeLoatche and Trecia 
Knight of Senator Hatch's office; and most especially Senator Breaux's 
legislative director Sarah Walters deserve enormous credit for this 
bill. Finally, we would not be claiming a victory today if it were not 
for the contributions of Senator Kennedy's staff, especially, David 
Nexon and Michael Meyers.
  On my own staff, I particularly want to recognize the contributions 
of Paul Harrington during the last Congress, and most especially the 
work of Sean Donohue who took up that effort on the tripartisan bill 
and who has continued to see it through to today's success, with the 
recent assistance of Daniel Crimmins, our Robert Wood Johnson Health 
Policy Fellow. Each and all have worked tirelessly to gather the input, 
analyze the issues, and build a consensus toward achieving this final 
product.
  Mr. LEVIN. Mr. President, I support making a prescription drug 
benefit available to seniors. Most Members of the Senate do. However, 
there are honest disagreements about how to get it done and whether the 
bill before us will strengthen or weaken Medicare.
  My principles are simple. The benefit should be voluntary, 
guaranteed, universal, and affordable.
  Perhaps my greatest concern with the bill before us is the effect its 
passage is likely to have on retirees who currently have prescription 
drug coverage provided by their former employers. Many retirees 
currently enjoy good prescription drug coverage from their former 
employer. However, the Congressional Budget Office has indicated that 
if we adopt the legislation before us approximately 37 percent of 
retirees who are currently receiving prescription drug coverage from 
their former employers will lose that coverage. Specifically, on June 
12, the Director of the Congressional Budget Office, CBO, Mr. Douglas 
Holtz-Eakin, who previously served for 18 months as chief economist for 
President Bush's Council of Economic Advisers, testified at a Finance 
Committee markup that 37 percent of retirees would be dropped from 
their former employers coverage. At that same markup, the Administrator 
of HHS' Center of Medicare and Medicaid Services, CMS, Mr. Tom Scully, 
stated that for current retirees ``who have employer-sponsored 
insurance, our estimate is consistent with 37 percent having their 
coverage dropped.'' During the debate so far, amendments to strengthen 
incentives for employers to maintain their prescription drug coverage 
for their retirees have failed.
  Also very troubling is what I call the yo-yo effect. To participate 
in the proposed plan, a senior in any service area where two or more 
private plans are offered, no matter what the premium, would only have 
the option of purchasing private insurance. The reason is that only if 
there are not two private plans offered in the region is the so-called 
Medicare fallback plan available. So let's assume that there are two 
plans offered in 2006 in a particular service area and a senior opts 
in. Assume further that in 2008, one of the two insurance companies 
pulls out of the service area and the so-called Medicare fallback plan 
is then available. So the senior opts for the Medicare fallback plan. 
However, if two private plans become available a later time, say 2009, 
the Medicare fallback plan is no longer available to the senior and she 
would then be required to again enroll in one of the private plans to 
retain coverage. This yo-yo effect could be repeated forcing seniors to 
deal again and again with different programs with different costs and 
different benefits and lots of paperwork. This is totally unacceptable. 
Seniors want stability and continuity in their Medicare Program. They 
want a program on which they can trust and rely.
  In addition, the legislation we are considering has a large gap in 
the prescription drug coverage. Once a senior's total drug spending 
reaches $4,500 for the year, she will have to pay 100 percent of the 
cost of their prescriptions until her total drug spending reaches 
$5,800. This has come to be called the donut hole. This coverage gap 
will leave many seniors to pay the full cost of prescriptions at a time 
when they most need assistance. I know of no other insurance program 
that is so unfairly structured in that way. There is a gaping hole in 
coverage but no gap in the requirement to pay premiums. That obligation 
continues even during the period that benefits are halted.
  The bill before the Senate also has an unspecified premium that could 
fluctuate from service area to service area as well as from year to 
year. Premium amounts are left up to the insurance companies. I believe 
there should be a cap on those premiums. The effort to adopt one 
failed.
  Adding a prescription drug benefit to Medicare is one of the most 
important things Congress can do this or any other year. We spend more 
on prescription drugs than we do on hospital costs. Members of Congress 
have been

[[Page 16702]]

promising for years that we would pass a Medicare prescription drug 
benefit for seniors. The only way to assure that the benefit will be 
available reliably and without complications to our seniors is to make 
it a guaranteed part of Medicare. The bill before us falls short of 
that. We should at least do no harm. When CBO estimated 37 percent of 
seniors currently receiving a prescription drug benefit from their 
former employer are going to lose the benefit because of this 
legislation, that is real harm.
  I hope the major flaws of this bill are somehow corrected in 
conference so I can vote for a conference report. But I cannot vote for 
the version before us.
  Ms. COLLINS. Mr. President, I was pleased to join my colleagues, 
Senators Boxer, Coleman, Landrieu, Kohl and Murray in offering an 
amendment to authorize a Medicare demonstration project on pancreatic 
islet cell transplantation to help advance this tremendously important 
research that holds the promise of a cure for more than 1 million 
Americans with Type 1 or juvenile diabetes.
  As the founder and cochair of the Senate Diabetes Caucus, I have 
learned a great deal about this serious disease and the difficulties 
and heartbreak that it causes for so many Americans and their families 
as they await a cure. Earlier this week, I had the privilege of 
chairing a hearing featuring young delegates from the Juvenile Diabetes 
Research Foundation's Children's Congress who had traveled to 
Washington from every State in the country to tell Congress what it is 
like to have diabetes, just how serious it is, and how important it is 
that we find a cure.
  Diabetes is a devastating, lifelong condition that affects people of 
every age, race, and nationality. It is the leading cause of kidney 
failure, blindness in adults, and amputations not related to injury. 
Moreover, a study released by the American Diabetes Association earlier 
this year estimates that diabetes cost the Nation $132 billion last 
year and that health spending for people with diabetes is almost double 
what it would be if they did not have diabetes.
  The burden of diabetes is particularly heavy for people with juvenile 
diabetes. Juvenile diabetes is the second most common chronic disease 
affecting children. Moreover, it is one that they never outgrow.
  In individuals with juvenile diabetes, the body's immune system 
attacks the pancreas and destroys the islet cells that produce insulin. 
While the discovery of insulin was a landmark breakthrough in the 
treatment of people with diabetes, it is not a cure, and people with 
juvenile diabetes face the constant threat of developing life-
threatening complications as well as a drastic reduction in their 
quality of life.
  Thankfully, there is good news for people with diabetes. We have seen 
some tremendous breakthroughs in diabetes research in recent years, and 
I am convinced that diabetes is a disease that can be cured and will be 
cured.
  I am encouraged by the development of the Edmonton Protocol, an 
experimental treatment developed at the University of Alberta involving 
the transplantation of insulin-producing pancreatic islet cells, which 
has been hailed as the most important advance in diabetes research 
since the discovery of insulin in 1921. Of the 257 patients who have 
been treated using variations of the Edmonton Protocol, all have seen a 
reversal of their life-disabling hypoglycemia, and 80 percent have 
maintained normal glucose levels without insulin shots for more than 1 
year. Amazingly, many of the transplant recipients have even reported a 
reversal of some of their complications, such as improved vision and 
less pain from neuropathy.
  Earlier this year, I joined with my colleague from Washington, 
Senator Patty Murray, as well as my colleague and cochair of the Senate 
Diabetes Caucus, Senator John Breaux, in introducing the Pancreatic 
Islet Cell Transplantation Act of 2003, which will help to advance this 
significant research that holds the promise of a cure for the more than 
1 million Americans with juvenile diabetes. The amendment we are 
introducing today is based on one of the provisions of that bill, which 
currently has 43 Senate cosponsors.
  Diabetes is the most common cause of kidney failure, accounting for 
40 percent of new cases, and a significant percentage of individuals 
with Type 1 diabetes will experience kidney failure and become 
Medicare-eligible before they are 65. Medicare currently covers both 
kidney transplants and simultaneous pancreas-kidney transplants for 
these individuals. To help Medicare decide whether it should cover 
pancreatic islet cell transplants, the amendment authorizes a 5-year 
demonstration project to test the efficacy of pancreatic islet cell 
transplantation for individuals with Type 1 diabetes who are eligible 
for Medicare because they have end-stage renal disease, ESRD.
  The cost of this demonstration would not be high. The Health 
Strategies Consultancy LLC, a highly regarded independent health policy 
firm, estimates that the net Federal cost of the proposal would be 
about $6.2 million in 2004 and about $84 million over 10 years.
  The cost of the demonstration project is low because the number of 
islet cell transplants that could be performed is limited. Islet cells 
are extracted from a donated pancreas, and the number of pancreas 
donors is extremely small when compared to the number of Medicare 
beneficiaries who could benefit from islet cell transplants. In 2002, 
there were 1,875 pancreas donations, but there were over 27,000 
Medicare beneficiaries who have diabetes as the primary cause of their 
end-stage renal disease and who might potentially benefit from islet 
cell transplants.
  The Health Strategies' cost estimate does not include the financial 
benefits that would accrue to Medicare for the reduced medical care 
costs that would occur for beneficiaries who receive islet cell 
transplants and, as a result, suffer fewer diabetes-related 
complications such as kidney failure, heart disease, blindness and 
amputation. Since diabetes currently accounts for one out of every four 
Medicare dollars, I believe that this amendment actually holds much 
promise for reducing Medicare spending in the future.
  I understand this demonstration project has been included in the 
Medicare prescription drug legislation that is being considered by the 
House. I hope that the Senate demonstrates similar wisdom, and I urge 
all of my colleagues to support it.
  Mr. KOHL. Mr. President, I rise to oppose S. 1, the Prescription Drug 
and Medicare Improvement Act. This bill is good for drug companies, 
insurance companies, and people who make TV ads for politicians--but it 
is not good for Wisconsin seniors.
  I know that many of my colleagues will vote for this legislation and 
that it will pass the Senate. I know that many of my colleagues believe 
that this is a first step, if an imperfect one. I would like to agree 
with them. I would like to vote for a bipartisan compromise that 
delivers even a part of the drug benefit our seniors rightly demand. 
But this is not that bill. This is, instead, an empty promise of 
straightforward help for seniors struggling with crippling drug costs. 
When they figure out the details--when they see the costs--when they 
understand the limited benefit provided--when they work through the 
complicated formulas determining whether they ought to sign up--when 
they see the drug industry continue to raise their prices and reap 
record profits--they will--rightly, rightly--revolt.
  I warn my colleagues, this is no bird in the hand--it is a vulture. 
And I cannot support it.
  I cannot support a so-called benefit that asks many seniors, for 
months at a time, to pay premiums but receive absolutely no help with 
their drug costs. I cannot support a ``benefit'' that could cause up to 
37 percent of retirees to lose their retiree health plans, leaving 
their former employees worse off than before we passed this bill. And I 
cannot support a ``benefit'' which is denied to low-income seniors 
eligible for both Medicaid and Medicare. A ``benefit'' of no benefit 
for seniors above average drug costs, for seniors with decent retiree 
plans, for seniors who are poor.

[[Page 16703]]

  I also cannot support a plan that neither I nor anyone in this body 
can explain because its details depend on the vagaries of a private 
market that doesn't exist yet. Under this system, seniors could be 
forced into a different plan, pay a different premium, and have 
different medicines covered every year. Insurance companies can come in 
and out, leaving seniors lost and confused in a maze of paperwork and 
choices every year. And we know that for those insurance companies that 
do participate, premiums are sure to increase because there is no 
limitation on premiums in this law.
  I also cannot support a plan that relies so heavily on the private 
sector to offer something they have never been willing to offer before. 
Drug-only plans are virtually nonexistent in today's marketplace. And 
the Medicare+Choice experiment, which also uses private insurance 
companies, has not worked in Wisconsin and in many other States. I 
cannot support a plan that has to pay insurance companies huge 
subsidies in order to offer a drug benefit. Not only is there no 
guarantee that they will participate; but precious Medicare dollars 
that could be used to pay directly for medicines are wasted, funneled 
to a drug industry that, last I checked, was not in need of a Federal 
handout. Even worse, this plan does not take advantage of the potential 
for controlling drug costs by utilizing the purchasing power of the 
millions of Medicare beneficiaries.
  I do want to point out that aside from the Medicare drug benefit, 
there are several provisions that I strongly support in this bill. I am 
very pleased that the bill includes long-needed reforms that will 
finally take a strong step toward fixing the distorted Medicare system 
we have today--a system that penalizes Wisconsin health care providers 
by paying them less than other States, and a system that penalizes 
Wisconsin seniors by offering them fewer benefits than seniors in other 
States enjoy. Not only is this unfair for people in the Medicare 
system; it also increases costs for Wisconsin businesses, employees, 
and families, who pay higher costs to make up the Medicare shortfall. 
The bill before us changes many of Medicare's payment systems, 
especially for rural areas, and goes a long way toward making Medicare 
fair for seniors and providers, no matter where they live.
  I am also pleased that the bill includes provisions to make generic 
drugs more available to all Americans. It will close loopholes in our 
current law that keep generics off the market and keep drug prices too 
high for too long. The CBO estimates that this provision will save 
Americans $60 billion over 10 years.
  I hope, but don't expect, that these two important provisions will 
survive the upcoming conference with the House of Representatives. And 
while I continue to hope that the conference will come back with a 
better Medicare drug benefit, I regret that it is unlikely to be the 
case. The House bill is in many ways even worse than the Senate bill 
before us.
  Mr. President, I regret that none of the amendments that I supported 
during this debate prevailed. These amendments would have greatly 
improved this bill and provided a real prescription drug benefit to 
seniors--a benefit we could all have been proud of. Instead, this bill 
is an empty promise to seniors and the disabled on Medicare. This is 
not the kind of plan they have been asking for or have a right to 
expect. We could and should have done better. But at minimum, we could 
and should be able to hold our work here to the standard set in the 
Hippocratic Oath: do no harm. And we have failed.
  I yield the floor.
  Ms. COLLINS. Mr. President, I want to thank the chairman of the 
Finance Committee for including provisions in S. 1 that will provide a 
measure of relief to rural health care providers, and in particular to 
home health agencies serving patients in rural areas. I am concerned, 
however, that the underlying bill does not go quite far enough and have 
filed an amendment with Senator Bond to increase the rural add-on 
payment for home health agencies to 10 percent. This was the amount of 
the payment prior to its expiration on April 1, and I believe it is the 
amount that is necessary to ensure that Medicare patients in rural 
areas continue to have access to the home health services that they 
need.
  Home health has become an increasingly important part of our health 
care system. The kinds of highly skilled--and often technically 
complex--services that our Nation's home health agencies provide have 
enabled millions of our most frail and vulnerable older persons to 
avoid hospitals and nursing homes and stay just where they want to be--
in the comfort and security of their own homes.
  Surveys have shown that the delivery of home health services in rural 
areas can be as much as 12 to 15 percent more costly because of the 
extra travel time required to cover long distances between patients, 
higher transportation expenses, and other factors. Because of the 
longer travel times, rural caregivers are unable to make as many visits 
in a day as their urban counterparts. Saundra Scott-Adams, the 
executive director of the Visiting Nurses of Aroostook in Aroostook 
County, ME, where I am from, tells me her agency covers 6,600 square 
miles with a population of only 72,000. Her costs are understandably 
much higher than the average agency due to the long distances her staff 
must drive to see clients. And, her staff is not able to see as many 
patients.
  Agencies in rural areas are also frequently smaller than their urban 
counterparts, which means that their relative costs are higher due to 
smaller scale operations. Smaller agencies with fewer patients and 
fewer visits mean that fixed costs, particularly those associated with 
meeting regulatory requirements, are spread over a smaller number of 
patients and visits, increasing overall per-patient and per-visit 
costs.
  Moreover, in many rural areas, home health agencies are the primary 
caregivers for homebound beneficiaries with limited access to 
transportation. These rural patients often require more time and care 
than their urban counterparts, and are understandably more expensive 
for agencies to serve. If the rural add-on payment is not reinstated, 
agencies may be forced to make decisions not to accept rural patients 
with greater care needs, and access will suffer further.
  The loss of the rural add-on has already caused many agencies to 
reduce their service areas. Some are eliminating services altogether in 
remote areas. There are some counties in Montana, for example, that 
have no home health services. And agencies in my home State of Maine 
have had to eliminate delivery of services to some of our outlying 
islands.
  If the 10 percent rural add-on payment is not restored, it will only 
put more pressure on rural home health agencies that are already 
operating on very narrow margins and could force more of these agencies 
to close. Many home health agencies operating in rural areas are the 
only home health providers in a vast geographic area. If any of these 
agencies are forced to close, the Medicare patients in that region will 
lose complete access to home care.
  There is strong support in the Senate for restoring the rural add-on. 
Earlier this month, 55 Senators joined me in sending a letter to the 
chair and ranking member of the senate Finance Committee urging that 
they extend the 10 percent rural add-on for home health agencies, and I 
ask unanimous consent that this letter be printed in the Record.
  The chairman of the Finance Committee and his staff have been working 
with us to try to accommodate my amendment, and I am very appreciative 
of their efforts. I am hopeful that we will be able to work this out so 
that we will be able to ensure that Medicare patients in rural areas 
continue to have access to the home health services that they need.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:


[[Page 16704]]




                                                  U.S. Senate,

                                     Washington, DC, June 5, 2003.
     Hon. Charles E. Grassley, Chairman,
     Hon. Max Baucus, Ranking Member,
     Senate Committee on Finance, Dirksen Senate Office Building, 
         Washington, DC.
       Dear Senators Grassley and Baucus: Home health has become 
     an increasingly important part of our health care system. The 
     kinds of highly skilled and often technically complex 
     services that our nation's home health agencies provide have 
     enabled millions of our most frail and vulnerable older 
     persons to avoid hospitals and nursing homes and stay just 
     where they want to be--in the comfort and security of their 
     own homes.
       By the late 1990s, home health was the fastest growing 
     component of Medicare spending. The rapid growth in home 
     health spending understandably prompted the Congress and the 
     Administration--as part of the Balanced Budget Act of 1997--
     to initiate changes that were intended to slow this growth in 
     spending and make the program more cost-effective and 
     efficient. These measures however, produced cuts in home 
     health spending far beyond what Congress intended. Home 
     health spending dropped to $10 billion in FY 2002, nearly 
     half the 1997 amount, and it is clear that the savings goals 
     set for home health in the Balanced Budget Act have not only 
     been met, but far surpassed.
       According to the Congressional Budget Office (CBO), the 
     post-Balanced Budget Act reductions in home health spending 
     totaled more than $72 billion between fiscal years 1998 and 
     2002. This is over four times the $16 billion that the CBO 
     originally estimated for that time period and is a clear 
     indication that the Medicare home health cutbacks have been 
     far deeper than Congress intended.
       As a consequence of these cutbacks, over 3,400 home health 
     agencies nationwide have either closed or stopped serving 
     Medicare beneficiaries. Moreover, the number of Medicare 
     patients receiving home health care nationwide has dropped by 
     1.3 million--more than one-third. Which points to the central 
     and most critical issue--cuts of this magnitude simply cannot 
     be sustained without ultimately affecting patient care.
       On October 1, 2002, home health agencies received an 
     additional across-the-board cut in Medicare home health 
     payments, and the Centers for Medicare & Medicaid Services 
     has dramatically reduced projections for home health spending 
     under the Medicare program over the next ten years. We are 
     concerned that any further cuts in payments for home health 
     services simply cannot be sustained without affecting patient 
     care, particularly for those Medicare beneficiaries with 
     complex care requirements.
       As you begin consideration of a Medicare modernization 
     package, we urge that you avoid any further cuts in payments 
     for home health services and preserve the full market basket 
     update for payments for home health services for 2004. In 
     addition, we urge that you extend the 10 percent add-on 
     payment for home health services in rural areas that expired 
     on April 1, 2003. Surveys have shown that the delivery of 
     home health services in rural areas can be as much as 12 to 
     15 percent more costly because of the extra travel time 
     required to cover long distances between patients, higher 
     transportation expenses, and other factors. Extension of this 
     add-on payment will therefore help to ensure that Medicare 
     patients in rural areas continue to have access to the home 
     health services they need.
       Thank you for your consideration, and we look forward to 
     working with you to ensure that elderly and disabled 
     Americans continue to have access to quality home health 
     services.
           Sincerely,
         Susan M. Collins; Christopher S. Bond; Wayne Allard; 
           Gordon Smith; Robert F. Bennett; Richard Lugar; Jack 
           Reed; Russell D. Feingold; Patty Murray; John W. 
           Warner; James Talent; Carl Levin.
         Charles Schumer; Chuck Hagel; Barbara Mikulski; Jon 
           Corzine; Tim Johnson; Patrick Leahy; Herb Kohl; Mary 
           Landrieu; Evan Bayh; Dianne Feinstein; Hillary Rodham 
           Clinton; Maria Cantwell; Frank Lautenberg; Ron Wyden; 
           John Kerry; Ben Nelson; Debbie Stabenow; Mark Dayton; 
           Ben Nighthorse Campbell; Mike DeWine.
         Arlen Specter; George Voinovich; James Jeffords; Bill 
           Nelson; Saxby Chambliss; Conrad Burns; Christopher 
           Dodd; Joseph Lieberman; Blanche L. Lincoln; Larry 
           Craig; Paul Sarbanes; Lincoln Chafee; Mike Crapo; 
           Richard Durbin; Barbara Boxer.
         Tom Harkin; Pat Roberts; Jim Bunning; Ted Kennedy; Sam 
           Brownback; Byron Dorgan; Thad Cochran; and Richard 
           Shelby.

  Mr. DODD. Mr. President, I rise today to speak in support of S. 1, 
the Prescription Drug and Medicare Improvement Act of 2003. However, I 
do so with great trepidation. While I intend to vote for the bill that 
is presently before the Senate, I believe that drastic changes are 
still necessary to make the benefit created by this legislation one 
that meets the needs of our senior citizens.
  I am also deeply concerned that Members on the other side of the 
aisle--as well as those in the House of Representatives, and the 
administration--will attempt to move this bill in a destructive 
direction during conference. Let me reiterate what I said in an earlier 
statement on this issue: we must not approve any Medicare reform 
measure that would force seniors to join private plans in order to 
receive a more generous prescription drug benefit. Such a measure would 
signal an end to the Medicare Program as we know it and should be 
rejected out of hand. I urge my colleagues to protect the Medicare that 
our seniors have come to rely on, and I urge the President not to sign 
any bill that privatizes Medicare. If such changes are made, I will not 
hesitate to oppose the conference report.
  Given these concerns, it is reasonable to ask why I am supporting 
this bill. The answer is quite simple--seniors in my home State of 
Connecticut and across the country have been waiting far too long for a 
prescription drug benefit under Medicare. And it is time that we in 
Congress heard them.
  Over the past month I had the opportunity to convene a series of 
forums on senior health care in Connecticut in an attempt to frame the 
scope of this debate. At these forums I heard from my constituents on 
many matters regarding their health care. But the present lack of 
coverage for prescription drugs under the Medicare program was by far 
the issue raised most often.
  At these forums I heard from seniors who literally could not afford 
to fill prescriptions called for by their doctors. I heard from elderly 
Medicare beneficiaries forced to choose between purchasing groceries or 
filling their prescriptions. I heard from seniors who were forced to 
skip dosages of their medicines in an attempt to stretch their limited 
supplies of needed medicines. I heard from Medicare beneficiaries 
requiring more than 10 prescribed medicines a day unable to afford even 
half of these prescriptions. Clearly, what I heard from hundreds of 
Connecticut's more than 500,000 Medicare beneficiaries is their grave 
concern over the present lack of a prescription drug benefit under the 
Medicare Program.
  I believe that the legislation about to be approved by this body 
offers an answer to those concerns. It is not the most complete answer, 
but it is a start--based on which we can improve in the future. It is a 
start because it will make so many seniors better off than they are 
today. And that should be our ultimate goal as legislators--to make 
people's lives better. Often this must be done incrementally, in steps. 
This bill is a positive first step.
  What do I mean when I say that it will make people better off? In 
Connecticut, one-third of all Medicare beneficiaries have incomes below 
160 percent of poverty. For many of these seniors, drug costs can be 
crippling. They are forced to choose between putting food on the table, 
and buying the medicines that they need to live healthy lives. With the 
passage of this bill, these seniors will no longer have to make this 
choice. The new Medicare prescription drug benefit will cover most, if 
not all, of their drug costs. I congratulate Senator Grassley and 
Senator Baucus, and other members of the Senate Finance Committee for 
including in this bill such a generous benefit for those low-income 
seniors.
  This legislation is not as clear cut for those seniors who have 
incomes above 160 percent of poverty. However, I believe that the 
majority will be helped by passage of this bill. The break even for 
this benefit--the point where an individual is better off with the 
benefit rather than just paying for all prescription drugs our of their 
own pocket--is about $1,100 in total annual drug costs. The average 
Medicare beneficiary spends approximately $2,300 on prescription 
medicines today. That number will undoubtedly be higher when this new 
benefit goes into effect in 2006. With the benefit created by this 
bill, that average beneficiary will realize nearly $600 in savings. The 
savings will be even greater for the 11 percent of beneficiaries who 
spend more than $5,000 per year on prescription drugs.

[[Page 16705]]

These are the seniors facing the most sever health problems, and most 
in need of financial assistance. That is what this bill provides--even 
if it is not to the extent that many of us would have liked.
  I am voting for this bill because so many seniors in Connecticut and 
throughout the country stand to benefit. However, no bill is perfect 
and S. 1 clearly still leaves much room for improvement even as it 
moves toward final Senate passage. I am particularly disheartened that, 
despite numerous attempts over the past 2 weeks, we have failed to 
address concerns over the present bill's lack of adequate provisions to 
ensure that those companies presently providing their retirees with 
prescription drug coverage receive adequate Federal support for their 
laudable efforts. While the creation of a prescription drug benefit 
under the Medicare program is laudable, it should not come at the price 
of displacing the employer-based benefits that so many seniors have 
come to rely on.
  Additionally, I remain concerned that the gap in coverage in the 
present bill, the so-called donut hole, will leave many Medicare 
beneficiaries facing high prescription drug costs with no assistance at 
the very time when it is most needed. Over the past 2 weeks, I have 
both offered and supported amendments designed to provide assistance to 
those with prescription drug costs within the hole, especially those 
with lower incomes who can least afford any gap in coverage, that have 
failed to win support by the Senate. Failure to close this gap, in my 
view, constitutes a glaring failure, one that I hope can be reversed as 
this bill moves into conference.
  I also am concerned that S. 1 fails to adequately protect Medicare 
beneficiaries form the very understandable confusion and uncertainty 
that may surround them just as they begin to navigate the intricacies 
of a brand-new program. Specifically, if enacted the underlying bill 
will require Medicare beneficiaries choosing a prescription drug plan 
to stay with that plan for a minimum of 1 year. With the enactment of 
such broad and weeping changes to the Medicare program, I am fearful 
that many Medicare beneficiaries will face great uncertainty trying to 
find the best plan to meet their particular needs. For this reason, I 
offered an amendment to S. 1 that would have simply granted Medicare 
beneficiaries navigating this new benefit for the very first time the 
ability to switch plans as they seek to determine which plan fits their 
particular health care needs in the first 2 years of the bill's 
benefit. Unfortunately, this amendment was not agreed to and I remain 
concerned that without its protections, senior Medicare beneficiaries 
will be unfairly locked into plans that do not meet their needs.
  Mr. President, I am pleased that S. 1 represents a significant 
departure from previous plans supported by the administration that 
would have required Medicare beneficiaries to leave the traditional 
fee-for-service Medicare Program in order to receive coverage for their 
prescribed medicines. Such a move would be unconscionable as 89 percent 
of all Medicare beneficiaries today are in the traditional program. To 
force these beneficiaries to leave their present system of coverage, 
and most likely the doctor that they have come to know and trust, would 
not only create great disruption, it would also for the first time 
since the program's inception create a tiered benefit system under 
Medicare that would more greatly reward those who choose to join a 
private preferred provider organization, PPO, or health maintenance 
organization, HMO.
  And while I am pleased that the bill before us soundly rejects a 
tiered benefit system, I am deeply concerned that the plan presently 
taking shape in the House of Representatives appears to rely on such a 
flawed plan. As I said earlier, such a measure should be soundly 
rejected.
  So it is with great caution that we come to the final moments of 
debate on this important issue. Medicare's nearly 41 million 
beneficiaries clearly need assistance in affording their needed 
medicines. The result of our efforts over the past 2 weeks, and more 
important, the result of the coming conference committee on this 
legislation will greatly determine to what extent we assist our 
Nation's Medicare beneficiaries to afford their needed medicines.
  Clearly, a great opportunity is presently before us. As the 
underlying bill moves to conference committee. I look forward to 
working with my colleagues to ensure that we seize this opportunity by 
strengthening the underlying bill. With passage of the bill presently 
before us, we now face a choice. We can insist on the good start that 
we have made here with passage of S. 1, and work to strengthen its 
provisions. Or, conversely, we can accede to the House legislation that 
in my view unfairly jeopardizes the traditional Medicare Program by 
tilting the system in favor of risky privatization schemes and against 
seniors.
  I ask my colleagues to join with me in working to ensure that any 
Medicare prescription drug legislation passed by this Congress is at 
least as strong as the bill we are about to vote on. A tilt toward the 
House-drafted language would signify not a strengthening of Medicare, 
but rather a weakening of this vital program's foundation and must be 
avoided at all costs.
  Nearly 38 years ago on July 9, 1965, this body passed the legislation 
creating the Federal Medicare Program sending it to a conference 
committee with the House. On that day, President Lyndon Baines Johnson 
remarked, ``This is a great day for older Americans. And it is a great 
day for America. For we have proved, once again, that the vitality of 
our democracy can shape the oldest of our values to the needs and 
obligations of today.'' Nearly four decades later, we are on the cusp 
of a similar challenge. Let us move Medicare toward the future without 
threatening its proven ability to provide for the health and well being 
of this Nation's senior citizens.
  Mr. COLEMAN. Mr. President, I am proud to mark this extraordinary day 
by coming to the floor of the Senate to celebrate the imminent passage 
of a prescription drug benefit for Medicare. This is a triumph not for 
a party or a President, but for America's seniors and their families. 
This is an incredibly hopeful day for all Americans who long for a 
national government that can get things done for people.
  Thirty-eight years ago Congress voted to create a health care program 
that would be the primary source of health insurance for this Nation's 
seniors. Most people would agree that this program has served us well 
for almost four decades. However, the practice of medicine has changed. 
Drug therapies, medical devices, and human genome research all hold 
great hope for breaking through physical limitations that hinder many 
seniors' ability to enjoy the later years of life.
  The question we now ask is what level of care are we going to provide 
our seniors and is the current system equipped to provide the type of 
care our seniors need and deserve.
  The benefits provided under Medicare, considered generous at its 
inception in 1965, pale in comparison to those enjoyed by Federal 
employees and most workers in the private sector today. A recent report 
submitted by the Joint Economic Committee found that Medicare has the 
least generous benefit package among leading forms of insurance. 
Medicare covers 56 percent of total health care expenses, while typical 
employment-based health insurance covers 70 percent.
  Seniors need prescription drug coverage. Seniors need better access 
to preventative care and disease management. Seniors need more choices 
in their health care options than they have today. Without updating, it 
may take years to add this kind of care to the current program--after 
all, it has taken over 30 years to add a prescription drug benefit.
  The Prescription Drug and Medicare Improvement bill is a step toward 
meeting the needs of this Nation's seniors.
  This bill provides a solid drug benefit that will provide assistance 
to every senior struggling to pay for prescription drugs as well as the 
security of knowing they are covered for unforeseen drug expenses.

[[Page 16706]]

  Under this plan, the average senior's annual drug costs will be 
reduced by 53 percent each year. That amounts to $1,677 each year back 
in the pocket of our seniors. And seniors with the greatest needs will 
receive additional assistance through increased cost-sharing, and 
reduced or waived monthly premiums and deductible.
  Equally important, this plan provides seniors with the security of 
knowing that they are covered in the event something happens and they 
find themselves facing exorbitant drug costs. At $3,700 in out of 
pocket drug costs, stop-loss coverage kicks in and the senior is only 
responsible for 10 percent of costs beyond this amount.
  This bill is also about expanding options for this generation and 
future generations of seniors. The incremental improvements to the 
Medicare program have largely been the result of legislative action 
over the last 40 years. The legislative process, however, is not a 
quick process, and it is simply not possible to keep the program 
current in the first parcel environment we currently live.
  The Medicare Advantage program included in this bill offers seniors 
the choice of receiving their health care benefits in a Preferred 
Provider Organization, PPO, the same type of health plan enjoyed by 
many families.
  Under this health care option--not mandate--seniors will have 
increased access to the latest advances in care such as desire 
management and better preventive screenings. Additionally, seniors who 
chose this option will also have a lower deductible for inpatient and 
hospital care than those in traditional Medicare.
  This bill lays the foundation for a Medicare program that is better 
able to respond to an evolving health care system by harnessing the 
efficiencies of the health care market, while preserving traditional 
Medicare for those seniors who are satisfied with their current 
coverage.
  This bill is about expanding options for seniors so our parents and 
grandparents have access to the type of care best suited for them.
  Is this bill everything everyone wants? Of course not. Are there 
decisions still to be made as it is implemented and we see how it 
actually works in the marketplace? Certainly. But this bill says we are 
not going to let the lack of perfection stop us from doing real good 
for people as soon and as effectively as we practically can.
  I would be remiss if I didn't express my appreciation to Senators 
Grassley and Baucus for their leadership in including many provisions 
in this bill to strengthen rural health care.
  The availability of health care in rural areas in Minnesota is 
absolutely critical to the stability and viability of many communities.
  The provisions in this bill to improve payments to hospitals in rural 
areas and reduce the geographic disparity in physician payments are 
critical to ensuring that these hospitals that threat not only seniors, 
but entire communities continued to receive care.
  I am pleased that we did not allow perfect to be the enemy of good as 
we considered this package.
  This is a substantial and dependable benefit for America's seniors. 
Again, it's not everything everyone wants. There are still decisions to 
be made as it is implemented and we monitor how it works in the 
marketplace. But today we are delivering on a promise to provide 
quality care to our seniors.
  I am hopeful that with bipartisan support this landmark legislation 
will pass the Senate and the House of Representatives by the July 4th 
holiday. When it does, there may not be any fireworks and parades but 
millions of seniors will be able to declare their independence from 
worrying about getting the prescription drugs they need to live a 
quality life.
  Mr. BIDEN. Mr. President, after many years of preparation and 
deliberation, and following weeks of debate and discussion on the floor 
this year and last, we in the Senate are about to vote on a bill 
providing some prescription drug benefits for Medicare beneficiaries 
that is widely expected to pass.
  Seniors have been demanding prescription drug coverage for many years 
now. They need it and they deserve it, and I believe what we should be 
passing here today is a bill that will bring the American people the 
type of prescription drug benefit they have been seeking--one that is 
easy to understand and use, one that covers a substantial portion of 
all their costs, and one that is affordable.
  But to the many Medicare beneficiaries who will read the details of 
this bill and say, ``there isn't much in here for me and it will cost 
me more than I am now paying for drugs,'' I would say: I hear you. This 
bill is not enough, not nearly enough.
  I have a lot of concerns about this bill. There is no uniformity from 
region to region in the benefit package or beneficiary payments. 
Seniors in the East could be paying far higher premiums than their 
relatives in the Midwest.
  The drug plan relies on private insurance companies to provide a type 
of insurance policy that they have already said they are unwilling to 
sell. I am skeptical that these private plans will stay, and that could 
mean seniors will have no stability in their coverage. The bill does 
allow traditional Medicare to step in and fill the gap but seniors 
might have to move back to a private drug plan if new ones come to the 
region.
  There is also a gap in coverage which I think is unfair and will 
surprise a lot of people.
  Finally, the bill falls short in its efforts to induce employers not 
to abandon their retiree prescription drug coverage, a situation that 
too many retirees have already faced in recent years.
  In summary, I view this bill not as a situation where we would say 
that the glass is half full and half empty; to my thinking, the glass 
is only about one-quarter full. In 2003, prescription drugs are as 
important in medical care as surgery; consequently, it seems logical to 
me that if Medicare pays for the bulk of the cost of a heart bypass 
operation for all beneficiaries, it should similarly pay the bulk of 
the cost of the drugs used to lower the cholesterol, and which would 
prevent the need for the bypass operation, for all beneficiaries. This 
bill does not achieve that commonsense goal. Not even close.
  But we need to start somewhere. This is the first step in gradually 
moving the health plan that covers nearly 40 million seniors and 
disabled individuals into the 21st century. And it is, very frankly, 
the best that we can expect to pass this Congress and that the 
President will sign.
  There are some good provisions in this bill. All Medicare 
beneficiaries will have access to a prescription drug plan. Individuals 
with low incomes, below 160 percent of Federal poverty level, will have 
access to prescription drug coverage at very little cost. Those with 
very high prescription drug expenses, in the many thousands of dollars, 
will have stop-loss protection to help protect them against 
catastrophic drug costs. And no one is forced to abandon the 
traditional Medicare Program for their basic health care, with which 
they are so familiar, in order to obtain prescription drug coverage.
  During the Senate deliberation on this bill, I have voted for 
amendments that would improve the prescription drug coverage and 
decrease the cost to beneficiaries. Almost all of these amendments were 
not adopted, mostly with the rationale that there was not enough money. 
I do not feel constrained by some arbitrary $400 billion cost limit on 
this bill. I never agreed to such a limit. In fact, my sense of values 
tells me that prescription drug benefits are a high priority, and I 
would be willing to spend more than $400 billion for a good 
prescription drug plan, while cutting budget items of lower priority, 
such as tax cuts for the very wealthy.
  In the end, I decided to vote for this bill, despite its severe 
limitations. Given the many past years of fruitless discussions on this 
matter, I feel it is critical to put something into law now that can 
serve as a starting point for development of a true prescription drug 
plan. But that is not to say that I will accept any lesser of a bill, 
and my colleagues should not count on my continued support, if the 
final version

[[Page 16707]]

of this bill that comes out of negotiations with the House of 
Representatives undercuts the Medicare Program or moves toward reducing 
protections for beneficiaries.
  We also need to remember, this bill comes with a warning to all of 
us: the public is a lot smarter than they are sometimes given credit 
for, and if we do not work diligently to improve what we have begun, 
they will rightly take out their anger on us. We need to ensure that 
this bill is the first step, not the last step.
  Mr. GRASSLEY. Mr. President, parliamentary inquiry. Are we now ready 
for third reading?
  The PRESIDENT pro tempore. The question is on agreeing to the 
committee amendment in the nature of a substitute, as amended.
  The committee amendment in the nature of a substitute, as amended, 
was agreed to.
  The PRESIDENT pro tempore. The question is on engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed for a third reading and was read 
the third time.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that following 
passage of S. 1, the bill be held at the desk; further, when the Senate 
receives from the House the companion measure to S. 1 the Senate 
proceed to its consideration, all after the enacting clause be 
stricken, and the text of S. 1 as passed be inserted in lieu thereof; 
the bill then be read a third time and passed with the motion to 
reconsider laid upon the table; further, that the Senate then insist on 
its amendments and request a conference with the House, and the Chair 
be authorized to appoint conferees with a ratio of 5 to 4; finally, 
with that action, I ask unanimous consent that passage of S. 1 be 
vitiated and the bill be placed back on the calendar.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  Mr. BAUCUS. Mr. President, I want to take a few moments to return to 
the basics of what this bill is all about. Let's keep our eyes on the 
ball.
  We are working here to make a meaningful improvement in health care 
for seniors. We are working to bring prescription drug coverage to 
Medicare beneficiaries.
  Too many seniors do without drug coverage. The Congressional Budget 
Office reports that roughly a quarter of Medicare beneficiaries have no 
drug coverage. Ten million people. They have to pay all of their drug 
costs out of their own pockets. They pay full price.
  Lack of coverage means poorer health. Seniors who get along without 
drug coverage get fewer of the healing benefits that prescription drugs 
provide. CBO reports that when seniors do not have drug coverage, they 
fill about a quarter fewer prescriptions, on average, than do those who 
have coverage.
  But whether seniors have coverage or not, they still need a 
significant amount of prescription drugs. CBO says that in 1999, 
Medicare beneficiaries who had coverage filled an average of 32 
prescriptions a year. Those without coverage still filled an average of 
25 prescriptions a year.
  These prescriptions cost seniors a good deal of money. The average 
Medicare beneficiary spends about $2,500 a year on prescription drugs. 
That's a big number--especially as the median income for all elderly 
households in 2001 was less than $19,000.
  Those costs are rising fast. CBO projects that the average Medicare 
beneficiary's drug costs will rise at a rate of more than 10 percent a 
year over the next decade. That is far faster than the cost of living. 
That means that without this legislation, seniors will need to devote 
larger and larger shares of their income to paying prescription drug 
bills.
  So we are here to try to make prescription drugs more affordable for 
seniors. And we are here to extend coverage to the roughly 10 million 
seniors who have no prescription drug coverage at all.
  We are here to try to end seniors' painful choice between filling 
prescriptions and buying food. Seniors should not have to choose among 
the necessities to maintain their health. We are here to do something 
about that today.
  Let me review what this bill would do.
  This bill would make available prescription drug insurance to all 
seniors.
  This bill would ensure that 44 percent of Medicare beneficiaries--
those with the lowest incomes--would have truly affordable prescription 
drug coverage with minimal out-of-pocket costs. For these lower-income 
seniors, with incomes up to 160 percent of the poverty level, 
copayments would never exceed 20 percent of the cost of drugs.
  Let me take some examples. Let's look at what this bill would do for 
beneficiaries with what will likely be average drug spending of $3,155 
in 2006.
  For seniors with average drug expenses, even with higher incomes, 
this bill would save them $1,677. That is a 40 percent savings in out-
of-pocket costs.
  The savings would be greater for lower income seniors. For an 
individual making $14,000 or a couple making $19,000 a year, with 
average drug spending, they would save $2,842. That is a 90 percent 
savings in out-of-pocket costs.
  For an individual making $12,000 or couple making $16,000 a year with 
average drug spending, they would save $2,842 in out-of-pocket costs. 
That would be a savings of 96 percent in out-of-pocket costs.
  This bill would thus ensure that those who have been least able to 
receive the healing benefits of prescription drugs would now be able to 
do so. Millions of people would have a better quality of life. Lives 
would be saved.
  This bill would create a strong Government fallback. Seniors would 
have access to at least two private plans for a prescription drug 
benefit, or the Government would provide a standard fallback plan. If 
there is not true competition, then traditional Medicare would provide 
a fallback.
  The Department of Health and Human Services would continue to oversee 
these plans. The plans would operate within tightly controlled limits. 
This bill includes strong consumer protections.
  And this bill does not tilt the playing field. This bill does not 
make private plans a better deal than traditional Medicare.
  This bill would make a nearly $400 billion expansion of a major 
entitlement program. This is a historic opportunity to make a 
fundamental change for the better for millions of Americans.
  In so doing, this bill would finally do something that the 
overwhelming majority of industrialized nations have already done.
  This is a broad compromise. This is not a bill of the left or a bill 
of the right. This is a weaving together of approaches, in the finest 
American tradition.
  This is a historic opportunity. Let us finally seize that 
opportunity, and improve health care for our seniors. Let us finally 
seize the opportunity, and bring prescription drug coverage to all.
  Mr. GRASSLEY. Mr. President, we are about to take a historical vote.
  Since 1965, Medicare hasn't covered prescription drugs. Now, 38 years 
later, we're changing that--on a strong bipartisan basis.
  Because of this bill, on January 1, 2004, seniors across America will 
have immediate help with prescription drug costs. Moreover, on January 
1, 2006, seniors will have access to affordable, comprehensive drug 
coverage as a permanent part of Medicare.
  No longer will seniors have to make hard choices when it comes to 
paying for prescription drugs.
  This bill also strengthens and improves Medicare, giving seniors more 
choices and better benefits than they have today.
  At the same time, it brings long overdue Medicare equity to the 
people of Iowa and to other rural States.
  We are on the verge of a major victory.
  I urge my colleagues to support S. 1.
  Mr. BAUCUS. Mr. President, we are about to vote. I want to thank all 
Senators for their tremendous patience. It is not an easy task. I 
particularly thank the chairman of the committee but also all Senators.
  Second, I thank the staff who have not had any sleep in the last two 
or

[[Page 16708]]

three weeks. I don't know how they are still standing. A lot of people 
have been working on this bill. My thanks. I know I speak for all the 
Senators in thanking all the staff that worked so hard to help achieve 
this end.
  The PRESIDENT pro tempore. The bill having been read the third time, 
the question is, shall it pass?
  Mr. HOLLINGS. Mr. President, I ask for the yeas and nays.
  The PRESIDENT pro tempore. Is there a sufficient second?
  There is a sufficient second. The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. McCONNELL. I announce that the Senator from Oklahoma (Mr. Inhofe) 
is necessarily absent.
  Mr. REID. I announce that the Senator from Massachusetts (Mr. Kerry) 
and the Senator from Connecticut (Mr. Lieberman) are necessarily 
absent.
  I further announce that, if present and voting, the Senator from 
Massachusetts (Mr. Kerry) would vote ``nay''.
  The PRESIDENT pro tempore. Are there any other Senators in the 
Chamber desiring to vote?
  The result was announced--yeas 76, nays 21, as follows:

                      [Rollcall Vote No. 262 Leg.]

                                YEAS--76

     Akaka
     Alexander
     Allen
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Cantwell
     Carper
     Chafee
     Chambliss
     Cochran
     Coleman
     Collins
     Conrad
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dodd
     Dole
     Domenici
     Dorgan
     Durbin
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Grassley
     Hagel
     Hatch
     Hutchison
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Lincoln
     Lugar
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Pryor
     Reid
     Roberts
     Schumer
     Sessions
     Shelby
     Smith
     Snowe
     Specter
     Stabenow
     Stevens
     Talent
     Thomas
     Voinovich
     Warner
     Wyden

                                NAYS--21

     Allard
     Byrd
     Clinton
     Cornyn
     Edwards
     Ensign
     Graham (FL)
     Graham (SC)
     Gregg
     Harkin
     Hollings
     Kohl
     Levin
     Lott
     McCain
     Nickles
     Reed
     Rockefeller
     Santorum
     Sarbanes
     Sununu

                             NOT VOTING--3

     Inhofe
     Kerry
     Lieberman
  The bill (S. 1), as amended, was passed.
  (The bill will be printed in a future edition of the Record.)
  The PRESIDENT pro tempore. Without objection, the title amendment is 
agreed to.
  The title was amended so as to read: ``A bill to amend title XVIII of 
the Social Security Act to provide for a voluntary prescription drug 
benefit under the medicare program and to strengthen and improve the 
medicare program, and for other purposes.''.
  Mr. GRASSLEY. Mr. President, I move to reconsider the vote.
  The PRESIDENT pro tempore. The Chair, in my capacity as a Senator 
from the State of Alaska, moves to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. INHOFE. Mr. President, because of urgent business back in my 
State of Oklahoma, I will be unable to be in attendance to vote on S. 
1. It makes no difference, however, because I would have voted against 
it.
  Last week, I addressed this Chamber regarding S. 1, the Prescription 
Drug and Medicare Improvement Act. At that time, I said I could not 
support the legislation in its current form and expressed my hope that 
it could be improved on the floor. Unfortunately, that has not 
occurred. I am restating my opposition to this legislation.
  This is simply another Federal entitlement program designed to 
balloon past expected costs of $400 billion. For example, in the past, 
Medicare expenses have soared nearly five times the projected costs. I 
remember that well because I remember in 1965 when it was passed. This 
trend will only escalate if we continue to add unfunded obligations 
without ensuring the long-term solvency of the entire program.
  We must examine the necessity of such obligations prior to placing 
the burden on the backs of the future taxpayers. And is a full 
prescription drug benefit necessary? Currently, 76 percent of seniors 
already have some form of prescription drug coverage. A recent Zogby 
poll found that three-fourths of seniors thought the coverage offered 
under this plan would be no better than what they currently have. In 
fact, less than one-half would even purchase the option if given the 
choice. However, with the passage of S. 1, those individuals may not be 
given that choice. CBO estimates that one-third of Medicare 
beneficiaries with employer-sponsored coverage will lose those benefits 
once the bill takes effect. Seniors who currently have private coverage 
that they like will be forced to buy the Government-sponsored benefit 
simply because it is the only thing that will be available.
  There is something wrong with that picture. The Government should not 
be replacing coverage that already exists. However, this legislation 
opens the door for continued Government intervention. With the 
inclusion of the fallback provision, this benefit has the potential to 
become fully federalized if private plans do not surface. Once again, 
we are placing more and more expense at the door of the taxpayers, our 
children, and our grandchildren.
  I am concerned about the effect this bill could have on the future of 
the entire Medicare Program. I have worked with my colleagues to 
support improvements to this legislation. I and many of my colleagues 
have signed letters to both Senator Frist and President Bush outlining 
the principles that need to be included in the final version of this 
bill. I also cosponsored an amendment with Senators Ensign, Hagel, and 
Lott to provide a more reasonable prescription drug benefit that does 
not create a massive entitlement program. I believe the House of 
Representatives is on the right track with this issue.
  I am hopeful that with the passage of S. 1, the conferees will work 
to see that the final legislation adheres to the principles stated in 
the letters to President Bush and Senator Frist and the proposal 
supported by the House. At that time, I will look forward to supporting 
this legislation.
  The PRESIDENT pro tempore. The majority leader.
  Mr. FRIST. Mr. President, for years Congress has debated providing 
prescription drug coverage to seniors and how to strengthen and improve 
the Medicare Program. Tonight we have acted. Tonight America is one 
step closer to being a more caring society for millions of seniors and 
individuals with disabilities. Tonight seniors and individuals with 
disabilities, through this bill, will get relief from high prescription 
drug costs and outdated, often inadequate medical care. Tonight we are 
one step closer to providing real health care security to seniors all 
across the Nation.
  We stand on the shoulders of many in this body and in the House of 
Representatives who have labored mightily to improve the Medicare 
Program. We have reached this point of success because of the 
commitment of the leadership in the House as well as the Senate. Above 
all, we are indebted to the bold leadership of the President of the 
United States without whom we would not be transforming or improving 
the system.
  Indeed, the bill we have just passed is nothing less than historic. 
By dramatically expanding opportunities for private sector innovation, 
it offers genuine reform that will dramatically improve the quality of 
health care for all seniors. At the same time, the legislation 
preserves traditional Medicare so that those who wish can remain in 
traditional Medicare and keep exactly what they have today.
  This bill combines the best of the public and private sectors and 
positions Medicare to evolve with the medical treatments of the future. 
It is entirely voluntary.
  I am very pleased by the overwhelming majority of this body who 
tonight voted to move this legislation towards a more competitive 
private model but a partnership between the public and private sector.

[[Page 16709]]

  I am also pleased that the amendment maintained the balance that has 
been so important in what I set out a few weeks ago, to be a truly 
bipartisan effort. The bill devotes increased resources and expands 
opportunities within the traditional Medicare Program for chronic care 
coordination, for disease management, for preventive care.
  As many people have stated, it is not a perfect bill, but we will 
continue to move this legislation forward now to conference once, later 
in the evening or in the hours of the morning, after the House passes 
its legislation, we will have the opportunity to make the private 
sector provisions more flexible, indeed more competitive, and more like 
the Federal Employees Health Benefits Plan. All of us in this body are 
familiar with the impressive record of that plan, the Federal employees 
plan. Every Member of Congress and over 8 million other Federal workers 
and retirees enjoy the ability to choose the plan that best suits their 
medical needs.
  Indeed, as we go through conference and once the bill is signed by 
the President of the United States, all seniors will have that same 
opportunity to voluntarily choose the plan that best meets their 
medical needs.
  I look forward to working with my colleagues on both sides of the 
aisle to improve this legislation and to make sure that it does not 
inadvertently displace good private health care coverage that exists 
today--options that are available to millions of Medicare 
beneficiaries, including employer-sponsored health coverage.
  Compromise and debate are the cornerstone of this great democratic 
system of government. I commend my colleagues for their admirable show 
of bipartisan spirit. Thanks to the leadership of our colleagues in the 
Senate and the commitment of President Bush, America's seniors will 
finally receive the health coverage they need and the security they 
deserve.
  I want to take a brief moment to thank all of my colleagues for their 
hard work and dedication over the last several weeks. It has been about 
3 months ago that I set out that we would address Medicare for these 2 
weeks--the 2 weeks prior to the July 4 recess. Many people said we were 
trying to do too much in too short a period of time. Others said it is 
something that has been debated for weeks and months, and indeed years, 
and there is no way we can finish it before July 4.
  Yet through the hard work of our colleagues--again, on both sides of 
the aisle--we have fulfilled that vision. Again, it is a first step, a 
step that will be improved in that conference before us. Nevertheless, 
we succeeded in what we set out to do with the legislation that is 
built upon the work of many Members of the Senate, as well as the House 
of Representatives and, in particular, the members of the Senate 
Finance Committee. I do want to thank especially Senators Hatch, 
Nickles, Lott, Snowe, Kyl, Thomas, Santorum, Smith, Bunning, and Breaux 
for their hard work and leadership.
  In particular, of course, I thank Chairman Grassley and Senator 
Baucus, the managers, who for the last 2 weeks have so capably managed 
the bill on the floor. Their cooperation and their leadership has been 
invaluable. Without it, we would not be here so close to the finish 
line.
  I would like to recognize all of the staff who have contributed to 
this effort:
  First, I would like to thank my chief of staff, Lee Rawls: my policy 
director, Eric Ueland; and my health policy director, Dean Rosen. Paul 
Jacobson, Bob Stevenson, Nick Smith, Bill Hoagland, and Amy Holmes of 
my Leadership office also made important contributions. I also would 
like to recognize the other members of my health team who worked so 
hard to help make possible the passage of this legislation: Elizabeth 
Scanlon, Craig Burton, Susan Goelzer, Shana Christrup, Allison Winnike, 
and Jennifer Romans.
  The Majority Whip's staff deserves special recognition, especially 
Kyle Simmons, Michael Solon, and Amy Swonger, for the long hours they 
put in and for the guidance they provided to our Finance Committee 
Chairman and our entire Republican leadership team.
  As I have said, passage of this legislation was made possible in the 
United States Senate because of the genuine spirit of bipartisan 
cooperation. Both the Republican and Democratic staff of the Senate 
Finance Committee worked incredibly hard, long hours these past several 
weeks and months. Their expertise, support, and stamina has been 
invaluable.
  I would like to thank Kolan Davis, Ted Totman, Linda Fishman, Colin 
Roskey, Leah Kegler, Mark Hayes, Jennifer Bell, and Alicia Ziemiecki of 
Chairman Grassley's staff.
  And I would also like to thank Jeffrey Forbes, Elizabeth Fowler, Bill 
Dauster, John Blum, Pat Bousilman, Kate Kirchgraber, and Andrea Cohen 
of Senator Baucus' staff for their contributions.
  Hazen Marshall, Stacey Hughes, and Megan Hauck of the Senate Budget 
Committee staff are also commended for their efforts.
  Thank you to you all.
  I look forward to working with Chairman Grassley and our colleagues 
in the House of Representatives to produce a conference report that can 
pass both Houses and be signed by the President in a timely manner 
later this year.
  Mr. President, 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. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________