[Congressional Record (Bound Edition), Volume 149 (2003), Part 21]
[House]
[Pages 29820-29827]
[From the U.S. Government Publishing Office, www.gpo.gov]




               PRESCRIPTION DRUG COVERAGE UNDER MEDICARE

  The SPEAKER pro tempore (Mr. Rogers of Alabama). Under the Speaker's 
announced policy of January 7, 2003, the gentleman from New Jersey (Mr. 
Pallone) is recognized for 60 minutes as the designee of the minority 
leader.
  Mr. PALLONE. Mr. Speaker, I plan to be joined tonight by some of my 
colleagues on the Democratic side, and I appreciate the fact that they 
are here to join me. I did listen to much of what was said by my 
colleagues on the Republican side in the last hour.
  One thing that bothers me the most about some of their statements is 
that they seem to color everything based on ideology. I hear constant 
references to conservativism, even if it is compassionate. I hear 
references to market forces and the private market. They suggest that 
they are not privatizing and somehow Medicare has been privatized for 
some time going back to Lyndon Johnson.
  First of all, it is very important to understand that I personally, 
and I know this is true about my colleagues, we do not look at this 
from an ideological perspective. I do not think we really care whether 
it is conservative or liberal or market or regulatory. We are only 
interested in providing a prescription drug benefit to senior citizens, 
and, practically speaking, the best way to do that.
  My concern about the Republican side is they seem to be ideologically 
driven: there have to be market forces or this has to be some kind of 
conservative approach, and the notion that everything has to be 
privatized or really has been privatized all along. It is just not the 
case.
  When we talk about Medicare when it was first started under Lyndon 
Johnson, he started Medicare because he realized that if a senior 
citizen, practically speaking, wanted to go out and buy insurance in 
the private market, which is all that existed at the time in the early 
1960s, that they could not get health insurance. They could not buy it. 
There was no way to do it.
  The reason that Medicare, which is a government program, not a 
private industry program, was set up was because of the failure of the 
private insurance market to accommodate and provide affordable, 
comprehensive health care for senior citizens. I do not care how it is 
provided, but the bottom line is that the private market could not 
provide the health insurance. There is no indication that that has 
changed in any way today. To suggest that somehow Medicare now is 
private is simply not true.
  I think that Republicans are spending so much time trying to make 
sure that Medicare is privatized in order to provide a prescription 
drug benefit that they are losing sight of the fact that the purpose is 
to provide the benefit. If we look at what this Republican bill, this 
Medicare conference report that we are going to get, and we have not 
seen it yet, if we look at what we are told that it is going to 
include, and we are going to vote on Friday or Saturday, we find that 
there is an attempt to privatize Medicare; and the way that they do it 
is by providing the HMOs and private insurance companies a huge amount 
of money, plus-up money, if you will, so they can, what the Republicans 
say, compete with traditional Medicare.
  The bottom line is that if we had a true competitive market between 
traditional Medicare or HMOs, the market should take care of itself and 
they should not have to add all of this extra money to boost up the 
HMOs and make sure that the HMOs and the private market are going to 
cover seniors. The irony is what they are doing here is forcing the 
seniors into managed care, into HMOs. You are not going to get this 
drug benefit unless you essentially sign up for an HMO. You are going 
to lose your choice of doctor; and as a consequence you are suffering, 
and traditional Medicare as we know it is going to disappear.
  What is this drug benefit that they are going to provide? Well, I 
would maintain that it is such a meager benefit, and it is going to 
cost senior citizens so much money out of pocket it is essentially 
meaningless. Since it is voluntary, most seniors will not even sign up 
for it.

                              {time}  2300

  In July when this bill came up in the House, the Democrats had a 
substitute. What we said is this. If you, as Republicans, feel that you 
want to provide a certain amount, pot of money to provide a 
prescription drug benefit, we know that the traditional Medicare 
program works very well, and nobody on the other side is saying that 
that is not true, then why do you not just add the money and add the 
drug benefit to traditional Medicare the way you added a benefit to pay 
your doctor bills. Seniors know that part A pays for their 
hospitalization, part B Medicare pays for their doctor bills. With 
their doctor bills, they pay about a $50 per month premium, they have a 
$100 deductible on the first visit to the doctor, 80 percent of the 
doctor bills are paid for by the Federal Government, 20 percent copay 
and after you reach a certain amount that you pay out-of-pocket, the 
Federal Government pays 100 percent. We as Democrats said, let's just 
emulate that and extend it to prescription drugs, call it part C, part 
D, whatever you want, you pay a $25 per month premium for your 
prescription drugs, you pay a $100 deductible for the first drugs, 
whatever, and then you would have 80 percent paid for by the Federal 
Government, 20 percent you would pay, copay, and then at a certain 
threshold just like in part B, 100 percent of the cost of your drugs 
would be paid for by the Federal Government.
  That is not what the Republican bill does. The Republican bill, first 
of all, says that you are probably going to pay $35 a month premium but 
there is no set premium. It could be $75, $85 a month. Who knows? The 
deductible is not $100 but $275 a year. And 75 percent

[[Page 29821]]

of the cost is paid for by the Federal Government, 25 percent by you, 
up to the first $2,200. But from $2,200 to $5,000 for your drug costs, 
you get nothing from the Federal Government. You pay the whole expense. 
I would maintain that you are going to have to shell out so much money 
for this premium and get so little of a benefit that most seniors would 
not even sign up. Keep in mind, you are only going to get it if you 
sign up for an HMO and give up your choice of doctors, and they are 
giving all this extra money to the HMOs to try to make sure that they 
will provide a prescription drug benefit because many of the HMOs in 
the past few years that have initially provided prescription drug 
benefits decided to drop the seniors, and now many of the seniors who 
signed up for them do not have it anymore. That is 100,000 people in my 
home State of New Jersey alone.
  I have my colleagues here. I would like to yield some time to them. 
First, I wanted to make two more points, because I have had seniors ask 
me this question. Number one, they say what are you doing about cost? 
Republicans are doing nothing about cost. They specifically have in 
their bill language that says that the Medicare administrator cannot 
negotiate lower prices, unlike what we do for the VA or we do for 
military personnel. Democrats, of course, in our substitute, we had 
negotiated prices on the part of the Medicare administrator. That is 
because of the prescription drug industry. Just like the Republican 
bill will help the insurance companies, help the HMOs, it is also going 
to help the drug industry because they will not be any cost 
containment. The other thing that is in the Republican bill that a lot 
of seniors have told me they are concerned about is no reimportation, 
no opportunity to reimport drugs from Canada or other countries to try 
to create a competitive market and lower cost. The third thing that 
some of my seniors have said that I wanted to mention and just throw 
out to my colleagues is that the Republican bill does not even take 
effect until the year 2006. We are going to go through an election for 
President, we are going to go through another election for Congress, 3 
years from now, before this bill kicks in. I hear my Republican 
colleagues say, oh, this is only the beginning, we're going to have to 
do more down the line. If this is such a great thing, why is not 
starting at the beginning of the year? If they pass it this week and 
the President signs it, why is not effective January 1? Why do we have 
to wait another 3 years? In any case, I see some of my colleagues would 
like to speak. I yield to the gentleman from Texas (Mr. Rodriguez) who 
has not only done a lot of work in general on the health care issue but 
I know has particularly paid attention in the context of the 
Congressional Hispanic Caucus with health care and this issue. I 
appreciate the gentleman being here tonight.
  Mr. RODRIGUEZ. I want to thank the gentleman from New Jersey, and I 
want to thank him personally for what he has done in the area of health 
care. I know that when we heard the other gentlemen, the Republican 
from Texas talk a little bit about the history, I know that one of the 
reasons for Medicare is the fact that as our seniors reach their 
twilight years, we have forgotten the previous history, and, that is, 
that one of the difficulties was that the existing insurance companies 
and health providers, as soon as you got ill, you were being dumped. 
Concerning LBJ, there is a little story that I tell that was written up 
that one of the things that he had gotten the insurance companies into 
the White House and the medical profession into the White House and he 
had basically got them in there and told them, look, I'm even going to 
be doing you a favor. You can go ahead and insure the young people 
while they're healthy and take care of them, and I know that as soon as 
they get ill, you're dumping them. So allow me the opportunity to 
establish Medicare, and I'll take them off your hands.
  We have forgotten that history. We are going back to allowing the 
private sector to come in. It would be great if that could work out, 
but the reality is that my seniors do not have the resources and the 
profit margins are not there for the private sector to profit from it 
because our seniors do not have the resources and they are the ones 
most likely to get ill. So most of the companies do not even want to 
touch that. But now, of course, they do because there is some benefits 
that they are going to be receiving. I know that there are some tax 
cuts also included in this effort.
  Mr. PALLONE. When I have posed that to the Republicans and I have 
said, the private market does not want to come in, even the HMOs do not 
come in, their answer is, we'll just give them more money. We know they 
have these plus-ups. I guess about $20 billion of the $400 billion is 
extra money going to the HMOs and the PPOs, the private sector, to 
offer this kind of drug benefit. Then I say to them, what if the $20 
billion doesn't work? They say, we'll just give them more money. That 
is their response, but it is the absolute opposite of what true 
competition is. If you are going to have to keep giving them more and 
more money in order to get them to enter into this market, how is that 
free enterprise and market economy?
  Mr. RODRIGUEZ. You know they do not want a free enterprise, 
especially when they put specific language in the bill that does not 
allow an opportunity, and I cannot understand this. If you really want 
a free enterprise, here you have it with our veterans, the VA has been 
able to get a contract where they can get lower prices. In this bill, I 
cannot believe that they have gotten language in there that does not 
allow that to occur. In fact, it makes it against the law for them to 
even try to negotiate. So it is a protection of the pharmaceutical 
companies. It is apparent that this bill is definitely being supported 
by the pharmaceutical companies, definitely being supported by the 
special interests. It is unfortunate, but our seniors are the ones who 
are going to suffer.
  I wanted to briefly talk a little bit, because I know that when we 
talk about Medicare prescription drug coverage, our seniors in our 
rural communities throughout this country are hit even harder. I share 
that with the gentleman because I know he is well aware that this same 
effort has been tried in terms of the privatization of Medicare. They 
came to us some years ago and said, we can provide Medicare cheaper. We 
tried that. We know now that it did not work. In fact, in my counties 
in south Texas, Wilson County, Atascosa County, they were not making 
the profits that they wanted so they dropped. We do not see the HMOs in 
rural Texas and probably throughout rural America. There is a lack of 
access to services. If they do not see those huge profits, then they do 
not drop the individual but they drop the whole county.
  Mr. PALLONE. This is what I envision is going to happen here in 
counties like yours or in my own State of New Jersey. We had 100,000 
people dropped by HMOs in the last few years. Because they keep giving 
all this extra money to the HMOs that are in this bill, I will use New 
Jersey as an example, but I think it could be true in Texas or 
anyplace. Because they are getting all this extra money, some HMO is 
going to step forward and say okay, look, you're giving me all this 
extra money, I'll offer a prescription drug benefit. If your seniors 
enter my program, you're giving me all this extra money, I'll offer a 
prescription drug benefit, but I'm going to charge, who knows, for the 
cost of the premium, not $35, $65, $75, $85 a month, whatever.
  According to this bill, as long as there is one HMO in the area, in 
my district or in your county, that is willing to provide the benefit, 
regardless of what they are going to charge for a premium, that will 
preclude a senior from getting any kind of drug benefit under 
traditional Medicare. So if they have traditional Medicare and there is 
some lousy HMO that comes in and wants to offer them this plan because 
they are getting all this money, but charging a high premium that they 
cannot afford, or they see no benefit because they have to lose their 
choice of doctors, then they are out of luck because you can only get, 
maybe, I am not even sure, but you can only get

[[Page 29822]]

drug benefits with traditional Medicare or without joining an HMO if 
there is not an HMO in the area that is going to offer it. But it does 
not have to be an HMO if it offers a reasonable plan or a reasonable 
price. It just has to be anyone that happens to be there.
  Mr. RODRIGUEZ. It is unfortunate. I want to give you some figures 
from Texas alone.

                              {time}  2310

  Texas has close to 530,000 Medicare beneficiaries that are in rural 
Texas, and 20 percent of them live in the rural communities. I can 
attest to the gentleman that those individuals are specifically going 
to have difficulties. This promise was given to us in the 1990s about 
Medicare HMOs that were touted as a way to control escalating cost; but 
by the end of the decade, as we well know, provided plans have 
abandoned thousands of seniors and they have left them out there in the 
cold. And I expect that the same thing is going to happen.
  I want to give an example also of a study that was done in the San 
Antonio area in Texas like it was done throughout the country. For 
instance, in San Antonio, Zocor, which is a cholesterol medication, 
runs approximately $110 for 30 tablets. Right now in the communities of 
Pearsall, Texas, in Atascosa County, where I have a population of 
15,000, that prescription costs 25 percent more. So even prescriptions 
now in rural communities are even more costly. So as we can see, the 
costs will add up quickly and force rural seniors with this proposal to 
really not be able to benefit. It is unfortunate, but what we see now 
is basically a dismantling of Medicare.
  And we recognize that. Because there is not a sincereness. The money 
that is coming to provide Medicare for seniors and for prescriptions is 
coming from cancer patients. Almost 1 billion per year, it is 
estimated; that those women with breast cancer, other people who suffer 
from cancer, it is just like taking education programs for kids to 
provide after-school programs. Both are in need. So we are taking from 
patients who suffer from cancer and then providing prescription drugs 
for our seniors. They are both in need of the service. So it is really 
unfortunate that they are unwilling to provide resources to really beef 
up the program the way it should be. And what I see is the beginning of 
a dismantling of Medicare in a way that is very dishonest, a push on 
this effort. And I know that we have people here who basically believe, 
and it is hard to comprehend that, that when it comes to health care 
that we do not have an obligation or a responsibility. But we need to 
understand that this country ought to be just in terms of how we treat 
our most vulnerable, how we treat our seniors in the twilight years; 
and this is no way to do that.
  So I am hoping that we will be able to get the votes to kill this 
proposal because I think that all it is is a way of basically beginning 
to look at dismantling Medicare as we know it. It is a program that has 
worked. What we need to do is fund it appropriately and make sure that 
prescription drug coverage is part of that. If I can just share with my 
colleagues, this administration, when it comes to heath care, they have 
gone after Medicaid, which is the program that responds to the most 
needy of our country. They have gone after the CHIP program that funds 
the kids in this country, working Americans who are out there working 
their hearts out and paying their taxes and yet find themselves unable 
to insure their own kids and themselves. And this administration is the 
same administration that is trying to destroy those same programs; and 
now they come up with a Medicare program that has a prescription drug 
coverage where they have taken money from the cancer patients? So when 
we look at a picture like that, we know that there is something wrong, 
and we know that their sincerity in trying to meet the problems that 
confront us is not there.
  Once again I want to thank the gentleman for being here tonight and 
talking about this critical issue, and I am hoping that Americans are 
out there listening because this is a serious issue that is before us. 
It is an issue that confronts all our seniors, and we all have elderly 
in our communities that are impacted by this, and we are playing games.
  The gentleman just mentioned something that is extremely important. 
If it is so great, why not do it now? And the reason why is because it 
is a hollow promise. There is nothing there. And when it does happen, 
it is going to be devastating and it is going to be a nightmare.
  Mr. PALLONE. Mr. Speaker, I want to thank the gentleman for his 
comments. And I have to tell him that most seniors think this is going 
to take place immediately, within a few months; and when I mention to 
my seniors that it does not take effect until 2006, they are shocked. 
They think how could they be talking about this 2 or 3 years from now? 
And when I mentioned it to one of the Republicans from Florida who 
spoke on the motion to instruct tonight, he said it would take that 
many years for the insurance companies and everybody to adjust to put 
this in place, which does not make any sense. We can have the structure 
changed in a month or two if we really want to do it.
  Mr. RODRIGUEZ. Mr. Speaker, if I can just close, it does make sense 
in a political year where they can get political contributions.
  Mr. PALLONE. Exactly.
  Mr. Speaker, I yield to the gentleman from Texas (Mr. Sandlin).
  Mr. SANDLIN. Mr. Speaker, I would like to thank my friend from New 
Jersey for leading this hour.
  Mr. Speaker, we have heard a lot of talk tonight from our friends on 
the other side of the aisle about how they want to provide a 
prescription drug plan. I do not know about all that, but what I do 
know is this: the plan the Republicans have privatizes Medicare. That 
is what it does. It privatizes Medicare. It eliminates coverage for 
over 2 million Americans. It gives tax subsidies for the wealthy. It 
forgets to give real help to those of low income. It has a very high 
deductible, and, Mr. Speaker, as we know and as our friends on the 
other side of the aisle have been forced to admit reluctantly, it has a 
gap in coverage so large that our seniors would forget there is any 
coverage at all but for the fact that they have to continue to pay 
premiums each and every month even at a time when they are not getting 
any coverage. And our friends on the other side of the aisle have had 
to admit that on this floor before this Congress and before the 
American people.
  Mr. Speaker, maybe I was mistaken. I thought we wanted to provide a 
prescription drug plan to help America's seniors. I thought that was 
what we were working on. But I have kind of seen the light. Our 
Republican friends do not really want to have a drug plan that helps 
seniors. They want a plan written by the HMOs and the pharmaceutical 
manufacturing companies. And I can see why those companies and the 
Republicans want that plan. The drug companies want a drug plan because 
they supply the drugs and they set the prices. Sweet. What a good deal. 
They supply the product, and they set the price.
  And it gets better than that. The Republican plan forces seniors off 
of Medicare and shoves them permanently into the waiting arms of HMOs. 
The Republican plan is to move all of the revenue to HMOs and place all 
the burden on our seniors.
  And, Mr. Speaker, what is the big rush? As has been mentioned by the 
gentleman from New Jersey (Mr. Pallone) and the gentleman from Texas 
(Mr. Rodriguez) and others, what is the rush? If we pass this 
Republican sham of a bill written by the drug companies, it does not 
even go into effect until the year 2006. This is 2003. What are we 
doing? How stupid do they think the American public is? What a sham. 
This is not a drug plan for seniors. It provides no coverage in 2003. 
It provides no coverage in 2004. It provides no coverage in 2005. And 
it just kicks in coverage in 2006. At least that is their planned 
coverage.
  Like I said, we are not in a rush to pass the bill; so why pass it 
today? Why pass it in 2003 and have no coverage until 2006? Maybe, I 
mean just maybe, it is because elections are coming up in

[[Page 29823]]

2004. Would that be why they are passing this bill?
  So our Republicans want to pass a bill in 2003 with no coverage. Then 
they want to brag about it in 2004 with a fancy name. They want to run 
on that when they are not even paying any benefits. And then who knows 
what they are going to do in 2006? As the gentleman from New Jersey 
(Mr. Pallone) has mentioned, we have got a whole new administration 
possibly. We have got a whole different Congress. We do not have any 
commitments. We are passing something in 2003 for 2006. That is 
ridiculous.
  In summary, the Republicans are telling seniors to sit down and shut 
up until elections are over and then they are going to deal with them. 
Sit down and shut up.
  Every Member of Congress claims to be committed to lowering the price 
of prescription drugs for our Nation's seniors, but the truth of the 
matter is that actions speak louder than words. I believe, as has been 
mentioned tonight, I believe the gentleman from New Jersey (Mr. 
Pallone) mentioned it, we passed a reimportation bill with overwhelming 
support this summer, bipartisan support, that would have finally 
granted our seniors access to the same safe, quality, low-priced drugs 
sold in 25 other nations including Canada.

                              {time}  2320

  Now, this was part of a deal between the Republican leadership and 
one of its own Members to secure that Member's vote for H.R. 1 in 
exchange for a commitment to do something about lowering the cost of 
drugs. H.R. 1 passed by one vote due to that promise, and we all know 
it. We were all here on the floor. We all know where it happened: right 
over on that aisle. One vote, when the Republican leadership kept the 
vote open 45 minutes, contrary to the rules of this House, based on a 
promise to do something.
  But that was just a blatant lie, because here we are, the final 
conference bill that not only fails to include reimportation, but makes 
it harder to reimport drugs from other nations.
  To further ensure the drug companies' flourishing profit margins, 
this legislation specifically prohibits the Secretary of HHS from using 
the purchasing power of 40 million Medicare beneficiaries to negotiate 
for lower prices. What is that all about, Mr. Speaker? Why in the world 
would we put in legislation and say we are prohibiting the Secretary 
from negotiating for lower prices? I have never heard of such. What 
kind of business deal is that?
  Now, if the Republicans are so darn proud of this pitiful plan, I 
want to know why they meet in secret in the conference committee. Now, 
I have never heard an answer to that. The Democrats do not even get 
told where the meeting is. Now, I can understand they were embarrassed 
to bring forth a bill written by the insurance companies; I can 
understand why they are all embarrassed about that. They did not want 
the Senate to know, they did not want the House to know, they did not 
want the public to know. But to preserve their dignity, could they not 
have just changed or covered up the HMO letterhead and had a regular 
conference committee meeting where everybody participates, where 
everyone has an opportunity to have their say?
  And, Mr. Speaker, it is critically important to note, as the 
gentleman from New Jersey (Mr. Pallone) mentioned, it is important to 
note that we are presently debating and talking about a nonexistent 
bill. There is no drug bill. We are guessing at the content. The 
Republicans say, they say that they are going to produce an 1,100-page 
bill, and we will vote on it Friday or Saturday.
  Now, I would like to see a show of hands, Mr. Speaker, and see how 
many people in here are going to be able to receive, read, and 
understand an 1,100-page bill in just a few hours. I mean I see no one 
has raised their hand because that is ridiculous.
  So the Republicans are planning to pass an 1,100-page bill that is 
currently not in existence, that has been read by no one, that was 
written by the insurance company, that provides absolutely no benefits 
until 2006, but privatizes Medicare. That is the plan. Now, is that not 
special? Is that not special, Mr. Speaker?
  Now, much has been made of the fact that AARP endorsed this bill. Not 
so. Some of the executives of that organization did, but there was not 
a vote of the membership and, in fact, the AARP membership across this 
country is up in arms about it. This is a PR stunt by the executives, 
and that is who is leading that organization is a former PR man.
  Let me read to my colleagues, because we heard all about the PR dude, 
but let us hear what some of the people say. Mr. P.R. Latta in Raleigh, 
North Carolina, he is writing to AARP and he says, ``As you all know, I 
have on many occasions informed you AARP opposes privatizing Medicare 
and Social Security. All of you know I tried to tell it like it is. 
AARP at the national level is supporting the present prescription drug 
bill. This bill does not serve the seniors, and it privatizes the 
prescription drugs under the misused distortions of freedom of choice.
  ``The support of this bill makes it impossible for me to trust AARP 
at the national level, and their support of this bill, with its many 
faults, makes it impossible for me to represent AARP at the local 
level.
  ``Therefore, effective at the end of this meeting, November 20, 2003, 
I will resign as your legislative chairman.''
  Mr. PALLONE. Mr. Speaker, I listened to everything the gentleman 
said, but I want to just take it one step further. The gentleman 
pointed out that we have no bill, and that is certainly true. The 
gentleman from Florida, earlier on the Republican side tonight, 
actually challenged some of us on the Democratic side on the motion to 
instruct and said that we had not read the bill. And the gentleman from 
Ohio (Mr. Brown), from our Committee on Energy and Commerce said, well, 
where is the bill? We have not received it. And, of course, the 
Republican Member from Florida had no response because they have not 
shown it to us, if it even exists. But imagine, as the gentleman said, 
not only do we not have the bill, not only has there been no conference 
participation by the Democrats, but now these organizations like AARP, 
AMA, the PhRMA, the drug manufacturers, all mentioned on the other side 
as endorsing the bill, some of them are even running ads for a bill 
that does not exist.
  So I mean the guy who is the legislative chairman, he did not say it 
in the letter there, but one would almost have to resign knowing that 
your organization has endorsed legislation that is not even available 
to look at. It is unbelievable.
  Mr. SANDLIN. Mr. Speaker, that is exactly right. Many of these folks 
are going to find out, when Medicare is privatized, as is the plan; 
that is where we are headed, let us make no mistake about it, we will 
no longer have to see these groups coming up here to talk to Congress, 
because we are not going to have anything to do with it. It is 
privatized. It is all then going to be a matter of what the HMOs are 
going to pay, and they will just have to go talk with them.
  Let us look at what a few organizations have said. Again, the rank 
and file of AARP is opposed to it. Let us look at the Alliance for 
Retired Americans: ``The Alliance for Retired Americans categorically 
opposes the proposed Medicare bill being touted by Republican leaders 
on Capitol Hill. The Bush administration and Congress are callously 
using a much-needed and long-awaited prescription drug benefit to 
privatize Medicare. Under the proposed bill Medicare, as we know it, 
will cease to exist. They may say they are looking out for seniors, but 
they are really protecting the profits of the big pharmaceutical 
companies and ensuring profits to the insurance industry.'' That is the 
Alliance for Retired Americans.
  I have a list, not to read all of this, but the Medicare Rights 
Center: ``The bill under consideration does more harm than good.''
  Families USA: ``The proposal does too much to destroy Medicare and 
too little to help the seniors who can least afford the medicines.''

[[Page 29824]]

  The Transport Workers Union of America: ``The bill fulfills Newt 
Gingrich's dream of causing Medicare to `wither on the vine.' It 
includes requirements and incentives to force people out of Medicare 
into private insurance plans; not only the ``premium support'' 
provisions, but the $12 billion slush fund for the President to bribe 
and coerce seniors into private plans.''
  The Center for Medicare Advocacy: ``Even in its most limited form, 
the premium support or voucher ``demonstration'' will cause elders and 
people with disabilities to pay different amounts for Medicare in 
different parts of the country.''
  UAW: ``Make no mistake, the issue before the Senate is not simply the 
nature of prescription drug coverage that will be provided to seniors. 
Rather, the conference report directly puts at risk the continued 
stability and viability of the entire Medicare program.''
  TWU: ``In exchange for these devastating changes to the basic 
Medicare program, seniors will get a prescription drug benefit that 
will leave one-half of all seniors paying more out-of-pocket than they 
do now and turns over to private insurers the power to decide what 
drugs to cover, how much to charge, and whether to offer coverage at 
all.''
  Mr. Speaker, I have an entire list. I am not going to go through it. 
But folks like the National Committee to Preserve Social Security and 
Medicare, Alliance for Retired Americans, Medicare Rights Center, 
National Seniors Law Center, American Federation of Teachers, NEA, 
National Taxpayers Union, American Nurses Association, and the list 
goes on and on. Everyone knows that this is a sham. And when we start 
looking at it, and our Republican friends will hear that and they say, 
oh, that is just a bunch of activists and progressive advocacy groups 
that are against that.
  We heard them tonight talking about, as the gentleman from New Jersey 
(Mr. Pallone) mentioned, all this ideology and being conservative. Mr. 
Speaker, come on, let us get with it. The most conservative and 
fiscally responsible groups in this country oppose this bill. Cato 
Institute. Now, who is more fiscally responsible and conservative than 
them? Quote: ``The Medicare prescription drug bill to be voted on by 
Congress this week is a terrible mistake that will dearly cost our 
children and grandchildren. This is a bill for politicians.'' I am 
leaving some of it out. ``Sometimes the better part of valor is 
recognizing when you have made a mistake. Congress should recognize 
this bill as a mistake and go back to the drawing board.''
  The Club for Growth: ``We oppose the Medicare prescription drug 
conference report. On balance the bill is too costly to taxpayers and 
would force millions of Americans into a government-run program greatly 
inferior to the coverage they have today.''
  Heritage Foundation, that well-known activist group, liberal advocacy 
group: ``Of course, the agreement contains an unworkable and 
potentially unpopular drug benefit with millions of Americans losing 
part of their existing coverage. Instead of targeting benefits to 
seniors who need them, the Medicare conferees are insisting on creating 
universal drug entitlement to be delivered through the vehicle stand-
alone insurance. Meanwhile, the politically engineered premiums and 
deductibles, coupled with their odd combination of doughnut holes and 
gaps in coverage, are likely to be unpopular with seniors.''
  The National Taxpayers Union: ``The vote on final passage of the bill 
will be among the most heavily weighted in 2003. They say, ``There are 
many problems with the provisions of the final Medicare prescription 
drug legislation, but perhaps the worst is that it will add hundreds of 
billions of dollars in unfunded liabilities to a Medicare system 
already headed for bankruptcy.''
  Citizens Against Government Waste: ``Congress is about to pass a bill 
that will add a prescription drug benefit to Medicare. The bad news is 
this bill fails to reform Medicare. It may take away prescription drug 
coverage that you and your friends already have.''
  American Conservative Union and others have similar comments.

                              {time}  2330

  Mr. Speaker, it is clear, this secret nonexistent missive that is 
created by the insurance companies in this country is ridiculous. For 
the Republicans to cram this bill with no benefits down the throats of 
our seniors is unconscionable. Mark my word, Mr. Speaker, if this bill 
passes, if this bill passes, it will pass solely on the backs of the 
votes of our friends on the other side of the aisle. And the 
Republicans can answer to America's seniors for this travesty. It is on 
their backs and on their shoulders. It is their responsibility.
  We should work together to craft a bill that is voluntary, has a 
specified cost, a low deductible, and absolutely no gap in coverage. It 
should guarantee coverage under Medicare because seniors have already 
paid for that coverage. We do not need to help the HMOs. It is our 
responsibility as a Congress to pass that sort of bill.
  To even consider the Republican bill is a slap in the face to seniors 
all across America. It should be an embarrassment to this great 
institution.
  Mr. PALLONE. Mr. Speaker, I appreciate the gentleman's comments and 
particularly those quotes that he has from some of the conservative 
groups at the end. Because, as my colleagues know, when I started out 
this evening, I wanted to make the point that I do not really care 
about the ideology. I just think this thing is not going to work and 
not deliver any benefit to seniors and they are going to lose their 
choice of doctors by having to join an HMO.
  It is great to see some of the conservative groups, which I normally 
do not agree with, are essentially saying the same thing: it is not 
going to work. It is not going to provide a benefit. Seniors are going 
to be forced out of their traditional Medicare.
  Mr. Speaker, I yield to the gentleman from Arkansas (Mr. Ross), who 
probably knows more about the prescription drug issue than anybody else 
because he is an owner of a pharmacy with his wife, or his wife is an 
owner. And he really knows how this works, practically, in the 
shortcomings.
  Mr. ROSS. Mr. Speaker, I thank the gentleman from New Jersey (Mr. 
Pallone) for yielding. And I thank my colleague from Texas (Mr. 
Sandlin) for his comments and very thoughtful remarks this evening on 
behalf of America's seniors.
  I have got to tell my colleagues that it is a frustrating time for me 
because, as was mentioned, my wife and I own a small-town family 
pharmacy. She is a pharmacist. And I have seen so many seniors walk 
through the doors of our pharmacy who either could not afford their 
medicine or could not afford to take it properly. And living in a small 
town, Prescott, Arkansas, population 3,400, I know a week or two later 
that senior is 16 miles down the road in Hope, Arkansas, in the 
hospital having a leg amputated, running up a $20,000, $30,000, 
$40,000, $50,000 Medicare bill for other complications simply because 
they could not afford their medicine or could not afford to take it 
properly.
  So I ran for Congress. I ran for Congress to try and modernize 
Medicare to include medicine for our seniors. And I knew it was pretty 
partisan in Washington, but I thought if there was an issue that would 
not be a Democrat issue or a Republican issue but, rather, a seniors 
issue, this would be it. But I got to town and learned it is a big drug 
manufacturers' issue.
  This is not a seniors bill we are going to be voting on this week. 
This is a bill written by the big drug manufacturers to benefit the big 
drug manufacturers. I am sick and tired of all this partisan bickering. 
I am sick and tired of Democrats being locked out, committee members 
being locked out of the room where they are writing this bill. If they 
get the drug manufacturers up out of the chairs at the table, they 
would have room for Members of Congress that have been elected like 
everyone else who had been appointed to that committee to address this 
issue. That is wrong and it is shameful, and it is a disgrace to our 
democracy.
  There are several problems with this bill. There are really a lot of 
problems with it. Let me just list a few of them for my colleagues, if 
I may. If anyone has any doubt in their mind whether or

[[Page 29825]]

not this bill was written by the big drug manufacturers, believe me, 
their fingerprints are all over it.
  The Republican leadership actually had the nerve to put language in 
this bill that says the Federal Government shall be prohibited, 
prohibited, from negotiating with the big drug manufacturers to bring 
down the high cost of medicine. That is in the bill. And they call it a 
seniors' bill.
  The second problem is the privatization aspect. Let me tell you why 
the big drug manufacturers want to see this Medicare prescription drug 
benefit privatized. You hear how drugs are cheaper, less expensive, 
less costly in other countries. It is true. I did a study about a year 
ago where we compared the price paid by seniors in Arkansas's 4th 
Congressional District on the five most commonly used brand-name drugs 
with the price paid by seniors on those same drugs in seven other 
countries. And what we found was startling. Seniors in my congressional 
district back home in Arkansas pay on average 110 percent more, 110 
percent more than seniors pay on average in those other countries. Now, 
why is that? Because America is the only industrialized nation in the 
world where people go without health insurance.
  In these other countries everybody has health insurance and in these 
other countries their governments tell the big drug manufacturers if 
you want your drug in our country, you are going to give us a discount. 
And they do. Well, the drug manufacturers know that if we have 40 
million seniors all under one plan in America, then we too as a 
government will demand those kinds of discounts and rebates to help 
offset the cost of the program. Thus the reasoning for creating and 
privatizing a Medicare prescription drug benefit.
  Our parents, our grandparents are literally going to have hundreds of 
insurance companies knocking on their door, calling them on the phone, 
sending them mail all trying to sell them exactly the same policy 
because they want to spread those 40 million people every which way 
they can so no one will have the buying power to demand those discounts 
from the drug manufacturers.
  This bill does nothing to bring down the high cost of prescription 
drugs. In fact, no insurance company has come forward to say they will 
offer a prescription drug plan for seniors. And that is why in this 
bill, the Republicans have put a $12 slush fund, $12 billion, they are 
just going to give to private insurance companies that will agree to 
offer a prescription drug benefit for seniors. There is a reason 
Medicare was created 38 years ago. Insurance is about spreading the 
risk. And the reality is with seniors there is no risk to spread. 
Seniors spend a lot of money on health care to either stay healthy or 
to get well. Privatizing Medicare will not work. If they get away with 
this, Social Security will be next.
  Finally, the benefit itself. Number one is, as my colleague from 
Texas (Mr. Sandlin) said so eloquently, the benefit does not even start 
until 2006. Folks, any time there is a plan offered up that does not 
kick in until after the next election, you ought to be leery of it. 
This plan does not even kick in until 2006. And when it does, this is 
what everyone get, and when I explain what they get, they are going to 
have a clear understanding of why they want to make sure it does not 
kick in until after the next election:
  There is a premium of about $35 a month, although they cannot tell 
you for sure what it will be, but they think somewhere around $35 a 
month. That is $420 a year. Then there is a deductible of $275 a year. 
Then from $275 worth of prescription drugs each year that a senior 
meets up to $2,200, the senior pays 25 percent and Medicare pays 75 
percent. That part actually sounds pretty decent. So the senior is out 
$481.25 on that part. But listen to this: once the senior has spent 
$2,200 on prescription drugs in a year, and as a small-town pharmacy 
owner I can tell you for a lot of seniors that only takes about 3 or 4 
or 5 months, once a senior spends $2,200, all the way up to $5,044, the 
senior is back paying the full cost of the prescription on their own. 
Medicare pays nothing. But, guess what? Medicare continues to bill you 
the $35-a-month premium.

                              {time}  2340

  That is $2,844 out of seniors' pockets.
  Mr. PALLONE. Mr. Speaker, maybe my colleague was going to say it, but 
we have done some statistical analysis that shows the majority of the 
seniors fall into the donut hole. So some people might think, well, I 
am not going to fall into that, but most seniors will be in that 
situation where they are paying a premium and getting nothing at some 
point.
  Mr. ROSS. Absolutely, good point, and I appreciate the gentleman from 
New Jersey pointing that out.
  The bottom line is, and you need a CPA to figure this thing out, but 
when you take all the numbers I just presented and add them up, and the 
bottom line, all this talk on the floor of the House of 
Representatives, the vote that is going to occur is going to boil down 
to this, that in 2006 seniors are going to get a prescription drug plan 
written by the big drug manufacturers that requires seniors to pay out 
of their own pocket $4,020.25 out of the first $5,044. Let me repeat 
that. Seniors under this plan, which does not even start until 2006, 
are going to pay $4,020.25 out of the first $5,044.
  Contrast that to Members of Congress, the health insurance plan we 
have, and quite frankly, the health insurance plan that most people who 
are fortunate to have health insurance in America now is very similar. 
Members of Congress pay $1,261 on the first $5,044, with their 
insurance plan picking up the difference. So the Republican leadership 
thinks that they should only pay $1,261 on the first $5,044, but they 
want seniors, they want our mothers and grandmothers, to pay $4,020.25 
on the first $5,044.
  Mr. PALLONE. Mr. Speaker, reclaiming my time, the reason why the 
Republicans have carved out this donut hole, which is going to make all 
these seniors, as my colleague says, pay a premium and get nothing in 
return is because they save a tremendous amount of money. Here they are 
worried about saving some money at the expense of the seniors at the 
Federal Government level, but yet they are going to throw all this 
money to the HMOs and to private companies to plus up the money that 
they get, and they do not have to have any kind of cost containment 
which would bring the costs down to the Federal Government. After all, 
if we had cost containment, the Federal Government would not have to 
shell out all this extra money, and we could fill that donut hole. I 
mean, it is just a way of saving money to the Federal Government, but 
at the same time, at the expense of the senior citizens.
  Mr. SANDLIN. Mr. Speaker, if the gentleman would yield, my good 
friend from Arkansas (Mr. Ross) brings up an excellent point, and our 
friends on the other side of the aisle, the Republicans, continually 
say we need to offer a plan to seniors that is just as good as the ones 
that the Members of Congress have, and if it is good enough for 
Congress, then it is good enough for our seniors. I would like to 
inquire of the gentleman from Arkansas about that and ask him, does the 
plan presented by the Republicans match the plan in Congress, and do we 
in Congress have a donut hole? Is there any gap in coverage suffered by 
the Members of Congress?
  Mr. ROSS. Mr. Speaker, Members of Congress pay 25 percent of the cost 
of the medicine, at least under the health plan that I am on and most 
of us are on. There are several options to choose from, and anyone with 
private health insurance, and again we have got 43.6 million people 
without health insurance in this country. Ten million of them 
unfortunately are children, but most people fortunate enough to have 
health insurance pay roughly 20 to 25 percent of the cost of the 
medicine. So in the first $5,044, Members of Congress pay $1,261, but 
the Republican national leadership wants our mothers and grandmothers 
and fathers and grandfathers to pay $4,020.25 out of the first $5,044, 
and that is a benefit that does not even kick in until 2006.

[[Page 29826]]

  I will give them this. Starting in April of 2004, they are going to 
give our seniors a prescription drug discount card. You stay up late 
enough tonight and watch cable TV. They will be advertised on TV. You 
can buy them, and any discount that is realized from that card comes 
directly from your family pharmacy and not from the big drug 
manufacturer.
  Again, they are not going to the root of the cause. Eighty-seven 
percent of the costs of medicine comes from the big drug manufacturer. 
This discount card does not discount any of the money paid by the big 
drug manufacturer, and so the savings amounts to 50 cents to $3. They 
did a study on this. This literally amounts to 50 cents to $3.
  So you take a senior that is on six prescriptions a month and a $500 
drug bill, let us say it is $3 per prescription. That is an $18 
savings. How in the world is that going to help seniors choose between 
the light bill, rent, or groceries?
  Mr. PALLONE. Mr. Speaker, I know the gentleman is familiar with the 
pharmacy industry. The bill avoids any cost containment. It actually 
says the Secretary of Medicare administrator cannot negotiate price 
reductions. There is nothing in the bill with these discount cards that 
would have any impact on the drug companies' ability to raise prices. 
So you might not save anything, right, if they raise the price and you 
get the same discount? You may end up paying more.
  Mr. ROSS. Number 1, the discount is not being paid by the drug 
manufacturer, which is 87 percent of the cost to the manufacturer. The 
discount is being paid by your family pharmacy in amounts of 50 cents 
to $3.
  More importantly, and I do not think this has ever been raised on the 
floor of this House, but this bill preempts State laws that regulate 
discount cards. About half the States in America, because these cards 
are so fly-by-night and so fraudulent and have ripped off so many 
seniors, because they find out the benefit they are getting from it is 
less than what they charge per month for the card, that most States in 
America now have regulations to monitor and control these so-called 
discount prescription drug cards. This bill preempts those State laws. 
There will be no regulation of these discount card companies.
  Max Richtman is the head of the National Committee to Preserve Social 
Security and Medicare. I want to say they are a bipartisan group. They 
are not. They are nonpartisan, and they are nonprofit. That is the 
Nation's second largest senior advocacy group, and I think he put it 
pretty well. He said, Have you ever heard of Medicare fraud? This 
Republican prescription drug bill, it is Medicare fraud. It is nothing 
more than a false hope and a false promise for our seniors.
  This is America, and we can do better than this by our seniors, by 
our greatest generation.
  Mr. PALLONE. Mr. Speaker, I appreciate the gentleman's comments and 
his insight from the pharmacy business, and I think we have about maybe 
seven or eight minutes. I would like to yield now to the gentleman from 
Ohio (Mr. Strickland), my colleague on the Subcommittee on Health.
  Mr. STRICKLAND. Mr. Speaker, I thank the gentleman for yielding, and 
I have been sitting here listening to this discussion, and I feel a 
quiet anger because I think something is being contemplated in this 
House that is going to be detrimental, perhaps devastating, to what I 
would consider the second most important piece of legislation Congress 
has ever passed to help seniors, and I am talking about the Medicare 
program.
  A lot of people in this chamber are nervous because they are afraid 
if they do not support this bad bill that our Republican friends will 
get a lot of money from the pharmaceutical companies, the President 
will go out and raise a lot of money and they will run a lot of TV ads. 
They are especially nervous because of the action of the AARP, the 
recent decision of the AARP to endorse this shameful piece of 
legislation, but I have heard from some of my constituents who are 
members of the AARP in the last few days, and they are outraged. They 
are outraged at their national leadership, and so I am not at all 
intimidated by the fact that the AARP has seemingly sold out the people 
they are supposed to be representing.
  I would like to just emphasize the fact that the executive director 
and the CEO of AARP, Mr. William D. Novelli, wrote a foreword to a book 
written by Newt Gingrich. Remember Newt Gingrich, when he was Speaker 
of the House talking about Medicare and saying that it would wither on 
the vine? Well, because of Mr. Gingrich's personal problems and some 
other issues, he is no longer Speaker, but those who want Medicare to 
wither on the vine are alive and well, and many of them are leaders in 
this House of Representatives.
  I would just like to share with my colleagues what Mr. Novelli, this 
CEO of AARP, said in the foreword to Newt Gingrich's book.

                              {time}  2350

  He wrote: ``Newt's ideas are influencing how we at AARP are thinking 
about our national role in health promotion and disease prevention and 
in our advocating for system change.'' I wonder how many AARP members 
across this country agree with Newt Gingrich, and how many of them feel 
good about their CEO and executive director actually saying that Newt 
Gingrich's ideas are going to be influencing how AARP will be 
advocating for system change.
  The system change they are talking about is the destruction of 
Medicare as we know it. The American people need to understand that 
under this plan that is being promoted by the President and by the 
leadership in this House, they cannot maintain their relationship in 
traditional Medicare and have prescription drug coverage. They will be 
forced out of traditional Medicare and forced into a Medicare HMO, or 
if one is available, they will have to go outside traditional Medicare 
and purchase a drug-only plan. We are not talking about a Medicare 
prescription drug plan, we are talking about an HMO privatized 
prescription drug plan.
  Mr. PALLONE. Reclaiming my time for a moment, Mr. Speaker, I know 
what the Republicans say. They say, oh, you can stay in traditional 
Medicare, but you do not get the drug benefit. And the only way you get 
it is if these plans the gentleman is talking about are not available 
in their particular area.
  But, as I said before, it is very easy with all this money that they 
are throwing to these private plans to get one in an area that would 
provide the semblance of coverage at a very high cost, and then you are 
totally precluded from getting the drug benefit under traditional 
Medicare.
  Mr. STRICKLAND. We have talked this evening about the fact that this 
plan does not start until 2006, and they say, well, it takes time, I 
guess, for the insurance companies to set this up. It would take very 
little time if we were simply to provide a prescription drug plan as a 
part of the traditional Medicare program. We could get this program 
underway, I would guess, in a matter of a few months, at most.
  And yet they are going to pass this, or try to pass it. If they pass 
it, they are going to go tell America's seniors, we did it for you. Of 
course, it will not take effect until 2006, and by the time seniors 
find out what they have been given, they will realize they have been 
snookered. They will have been snookered, but the 2004 election will 
have passed, and we will have been able to boast to the American people 
that we provided them something. But what they will have provided the 
American people is a bitter pill.
  I just hope that all of my colleagues, Republican and Democrat alike, 
will reject this sham legislation, protect Medicare, and do what is 
right for our seniors. I hope we will have the courage to stand strong 
in the face of what is going to be, and we all know it, it is going to 
be an onslaught of TV advertising paid for by the pharmaceutical 
companies. And that is a shame.
  Mr. PALLONE. I want to thank the gentleman from Ohio and the rest of 
my colleagues. I think we may only have another minute or so left, but 
I

[[Page 29827]]

started out by saying early this evening that I just want to provide a 
prescription drug benefit, as we all do on the Democratic side, for our 
seniors. We do not care about the ideology. We do not care about the 
different labels, conservative, liberal, progressive, whatever.
  But the problem is, the Republicans are providing a sham bill. They 
are doing all kinds of twists and turns and whatever rather than just 
providing a straight drug benefit, and yet it is so easy, as my 
colleague said, to do just that. We just need to add it to traditional 
Medicare, just like we do with part B now.
  I go around and explain that to seniors, and that is what they think 
they are getting. They think this is going to be a new part C or part 
D. And just like they receive their pay, the Federal Government pays 
for their doctor bills, that it will be the same way. They have no idea 
that they have to go through all these twists and turns and have to 
join an HMO or find some drug-only policy and end up paying a variable 
premium. It is going to be so shocking to them when they finally figure 
it out.
  But as the gentleman said, the Republicans have figured this out. 
They have figured, let us pass it, get through the 2004 election, and 
then 2 years later, when they finally figure it out, well, we will deal 
with that later.
  Mr. Speaker, I see my colleague from Arkansas is here, and so I will 
yield to him.
  Mr. ROSS. We have primarily tonight talked about the Medicare 
prescription drug benefit, or the lack of it, under the Republican 
prescription drug plan, but this 1,100-page bill, which they have not 
even allowed us to see yet, has other provisions in it that I think are 
worth noting, two primarily.
  One is that it increases part B deductibles for seniors in 2005, and 
then they will be indexed to grow based on part B expenditures for each 
year thereafter. They are going to increase part B deductibles. That is 
nothing more than a tax on sick seniors.
  Secondly, a lot of seniors rely on oxygen to stay alive in their home 
and hospitals beds, and they are getting those things now through a 
local supplier. They have the freedom to choose. This is going to be 
put out for competitive bidding. Competitive bidding. That means that 
if your oxygen machine breaks or you have an ice storm, and you have to 
have a portable tank, and your supplier may be someone that lives 5 or 
6 hours away, that is a serious issue.
  This bill has a lot more problems than simply the lack of a 
prescription drug benefit. But I will close, Mr. Speaker, by simply 
saying this: If seniors cannot afford the first $2,200 worth of 
medicine, tell me how they are going to afford the next $2,844? Because 
that is the gap. From $2,200 to $5,044 they are stuck paying the 
monthly premium of around $35, but they get no help at all. They are 
footing the bill entirely on their own. And that is wrong.

                          ____________________