[Congressional Record (Bound Edition), Volume 149 (2003), Part 18]
[Senate]
[Pages 25578-25579]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        RETIREE HEALTH BENEFITS

  Mr. NELSON of Nebraska. Mr. President, I am speaking today on what I 
think is an extremely important issue that is getting a considerable 
amount of attention today, and that is the prescription drug benefit as 
part of the Medicare Program, which is also being considered in 
conference at this very moment.
  As the minority leader has said, very often it is possible to read 
more about what is going on in the conference on Medicare than it is to 
find out this kind of information here. I might point out, as a matter 
of personal interest, one of the major reasons Nebraska has a 
unicameral legislature is that they wanted to do away with the 
conference committee system. At times, that certainly appeals to me 
back here.
  I come to the floor today to discuss this critically important issue 
that is now being considered in the prescription drug bill, and that is 
retaining retiree health benefits. If this problem is not addressed--
and from some of the information I am receiving through various 
sources, it may be under consideration at this moment--but if it is not 
addressed and solved, my colleagues and I will be forced to choose 
between the impossible--the haves and the have-nots--those who have 
coverage as retirees, with benefits being provided by a former 
employer, and want to keep it, and those who don't have the coverage 
and need it.
  It will be a war between seniors. It is an impossible decision that 
should not have to be made. Our first priority should be first to do no 
harm. Usually, we are faced with decisions between children and 
seniors, between this group and that group--a group typically seeking 
additional help. It is always a double-edged sword, but it is an 
impossible decision that this Senate and this Congress should not and 
must not make.
  I know this issue is also important to the conferees. They have been 
grappling with trying to make sure that those who have coverage keep it 
while those who need coverage get it. News reports today suggest they 
are close to reaching some sort of deal on how to entice employers to 
continue to provide retiree benefits. I commend them for their work in 
trying to get that done and addressing that issue. I hope they are 
successful in being able to accomplish it.
  Employer-sponsored retiree health benefits are the single greatest 
source of coverage for retirees, providing drug coverage for one in 
three Medicare beneficiaries. Retiree coverage is declining, though, 
and it is declining dramatically. Just 34 percent of all large firms--
200 or more workers--offered retiree benefits in 2002. That is down 
from 68 percent of all large firms in 1988. In a little more than 10 
years, the number has been cut in half. But there are still those who 
presently receive the benefits, and we cannot ignore the fact that they 
do have those benefits.
  Drug costs continue to constitute 40 to 60 percent of employers' 
retiree health care costs, and steep price increases are prompting 
employers to eliminate drug benefits, cap their contributions, or drop 
retiree coverage altogether. The spiraling costs relating to 
prescription drugs continue to threaten the continued provision of 
those benefits.
  Due to budget constraints, the Senate and House bills use the 
definition of out-of-pocket costs that would not allow employer 
contributions to count for meeting the catastrophic cap on beneficiary 
spending.
  This means, in understandable terms, that retirees with employer-
provided coverage will get less of a benefit than other seniors. In 
fact, under the Senate bill, retirees would need closer to $10,000 in 
drug costs before the stop-loss protection would apply, well after the 
$5,800 cap that applies to all other beneficiaries. And employers that 
choose to wrap around the Medicare benefit would be subject to a gap in 
coverage that doesn't end.
  As a result, the Congressional Budget Office has estimated slightly 
more than one-third of retirees will lose their employer coverage, 
making more than 4 million Medicare beneficiaries worse off at a time 
when we are trying to make them better off.
  Although Congress may claim this formula will save money for 
Medicare, any provision that encourages employers to drop their retiree 
benefits will only end up costing the Federal Government more and hurt 
millions of seniors in the process. Seniors who have retiree benefits 
have worked a lifetime and have made wage concessions over the years 
with the expectation that they would have retiree benefits in exchange. 
To change the rules of the game at this point and give them less than 
the other Medicare beneficiaries is, in a word, unfair.
  Congress must now enact a drug benefit that recognizes employers that 
are doing the right thing, continuing to provide their retirees these 
very important benefits, because to do otherwise will further threaten 
retiree coverage and will drive millions more seniors to Medicare for 
the coverage they used to get from their employers. This is a choice 
that might be put before us, but this is not a choice we should make. 
We should not have to decide between Lee and George and Mary and John. 
These are not decisions that this Congress should be forced to make. 
There are solutions.
  I am encouraged when I hear the conferees are looking at these 
solutions, but I encourage, in the most dramatic way possible, that 
they not only continue to work, but they find solutions that are 
workable, because without that the choice is an impossible one and I 
think threatens whether or not this body will pass a Medicare plan that 
provides prescription drugs for retirees.
  I yield the floor.
  The PRESIDENT pro tempore. The Senator from Nevada is recognized.

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