[Congressional Record (Bound Edition), Volume 150 (2004), Part 1]
[Extensions of Remarks]
[Pages 256-257]
[From the U.S. Government Publishing Office, www.gpo.gov]




        ADDRESSING THE RECENT ``REFORM'' OF THE MEDICARE SYSTEM

                                 ______
                                 

                        HON. WILLIAM D. DELAHUNT

                            of massachusetts

                    in the house of representatives

                      Wednesday, January 21, 2004

  Mr. DELAHUNT. Mr. Speaker, I rise today to address the consequences 
of the Medicare legislation signed into law in December of last year. I 
must express my profound disappointment with the outcome of a process 
that originally promised so much hope. Throughout 2003, there was 
bipartisan enthusiasm and genuine momentum for change that would 
safeguard the Medicare system and ensure affordable prescription drugs 
for every American. It seemed as if we might finally make some real 
progress. Sadly, the Congress--under relentless pressure from the White 
House and the pharmaceutical industry--squandered the opportunity of a 
generation.
  Some have characterized the new law as ``better than nothing.'' 
Nothing could be further from the truth. This was bad legislation, 
enacted in an underhanded manner. It is extremely expensive, but does 
little to actually bring down out-of-pocket consumer costs. The 
consensus for reform was shredded in favor of a complicated system 
designed by lobbyists for the pharmaceutical industry.
  Only a handful of congressional Members even saw the final 700-page 
document, made available barely an hour before floor debate. Although 
the bill was initially defeated after the normal 15-minute voting 
period, the Speaker simply refused to gavel the vote to a close. After 
more than three excruciating hours--the longest vote ever in the 
history of the U.S. Congress--he finally closed the vote only after 
enough arms were twisted to change the outcome. Even then, at 6 a.m. 
that Saturday in November, the bill passed by only five votes. And with 
the bill now law, the strongest defense from proponents seems to be: 
``Don't worry, no one has to sign up, it's all voluntary.'' That's 
hardly reassuring for millions of seniors in urgent need.
  Because this ``reform'' does far more to inflate the Federal budget 
than to help senior citizens or the Medicare program, I voted against 
it. There is so much wrong with this package that it's hard to know 
where to begin.
  First, it doesn't offer much real prescription drug coverage. To 
enroll in the new Part D coverage, you must pay an estimated $35 
monthly premium--and still meet an annual $250 deductible. Up to 
$2,200, you also pay 25 percent of the drug costs. After that, you face 
a coverage gap (the infamous ``doughnut hole'') where you pay 100 
percent until costs reach $5,044. In other words, older and disabled 
people will have to spend nearly $4,000 for the first $5,000 of annual 
coverage--paying nearly 80 percent of their prescription drug costs to 
get any substantial benefit at all. And, these are only first-year 
estimates; the out-of-pocket cost is expected to rise every year 
thereafter.
  Incredibly, however, if you participate in the new prescription drug 
benefit, you will not be permitted to buy any kind of supplemental 
insurance (like Medigap) to cover your share of the costs. Medicare 
will cover only drugs on a list of preferred ``formulary'' medicines; 
and drugs purchased outside the list will not be counted toward your 
deductible.
  On top of all that, the new benefit doesn't even take effect until 
the year 2006, more than 2 years away. This fact was scarcely mentioned 
by the bill's proponents during the congressional debate. Seniors need 
help now, not cynical and uncertain promises for later.
  In the meantime, the interim discount cards paraded by the 
administration promise only small savings for the consumer--if you can 
figure out how they work. It's not clear who will offer the cards, what 
the discounts will be, when and for how long the cards will be 
available. These decisions will be driven by--believe it or not--the 
self-interest of pharmaceutical companies and other business entities. 
The potential card issuers are not required to pass along any resulting 
savings to consumers. Once enrolled, you must stay with the card for at 
least a year, even if the issuer stops discounting the medication you 
need.
  It gets worse. This bill does not remotely pretend to address the 
fundamental issue: the crushing cost of prescription medication. Rather 
than leveraging the enormous buying power of millions of Medicare 
recipients, the new law actually bars market competition. And, let's be 
clear, this legislation was authored by partisans who swear by the 
catechism of the free market. As enacted, the bill explicitly prohibits 
Medicare from negotiating with the pharmaceutical industry for better 
prices and deeper discounts. We know negotiated discounts can work. 
When the VA negotiates on behalf of this country's veterans, their drug 
prices drop significantly. It is mind-boggling that 40 million seniors 
are being deprived--by law--of the same leverage.
  Moreover, the bill blocks reimportation of U.S.-produced drugs from 
other countries at lower prices. It claims to allow Canadian imports, 
but only if the Food and Drug Administration formally certifies their 
safety, which is unlikely to ever happen. The FDA has already 
stubbornly resisted reimportation, forcing local Councils on Aging and 
dozens of cities and States to take matters into their own hands--
although there is not a single documented case of injury resulting from 
U.S.-produced drugs that have been reimported from Canada.
  In fairness, the bill postponed a scheduled 4.5-percent cut in 
physician reimbursement for Medicare services--easing fears of a 
wholesale abandonment of Medicare patients. The legislation will ensure 
physicians receive a 3-percent increase in payments over the next 2 
years. However, this is not nearly enough to protect Medicare 
beneficiaries' access to quality health care providers. And, the bill 
actually complicates problems that oncologists face in getting adequate 
reimbursement for crucial cancer drugs and obstacles confronting 
patients who need access to inpatient rehabilitation facilities.
  Despite the coverage limits and other shortfalls, the cost of the 
legislation is spectacular--projected by the nonpartisan Congressional 
Budget Office to exceed $2 trillion over 10 years. At the same time, 
homeland security and recent tax cuts have already forced dramatic 
increases in the Federal deficit, now almost $400 billion. That is a 
shocking number,

[[Page 257]]

especially when you consider that just three years ago, the budget was 
boasting a healthy surplus.
  Moreover, many fear this new law could lead down a dangerous road 
toward privatization of Medicare and even Social Security. We saw a 
similar experiment fail dramatically with Medicare+Choice several years 
ago, when HMOs and other providers dropped out of the system as soon as 
costs escalated--leaving seniors to fend for themselves. This new law 
poses similar risks.
  It breaks my heart that the Congress could not achieve real Medicare 
reform that addressed prescription drug costs. As I look back on my 
four House terms, very few votes stand out as genuinely historic in 
consequence. Along with Presidential impeachment and the Iraq war 
resolution, the vote on this bill is such a watershed moment. The White 
House achieved this ``victory'' by deluding seniors about the impending 
relief--in the process, jeopardizing hope of genuine reform in the 
foreseeable future.
  As the House reconvenes, I will resume my work with colleagues on 
both sides of the partisan aisle to address problems with the new law. 
Older Americans have raised their voices effectively in the legislative 
arena before. In 1989, a deeply flawed catastrophic benefits bill was 
repealed. Almost a decade ago, we struggled successfully to restore 
Medicare cuts that savaged home health care locally and across the 
Nation. This time, we can expect a steep uphill battle. In his State of 
the Union address this week, the President vowed to veto any amendments 
to the new Medicare law. To amend even the most egregious provisions of 
this bill will require every ounce of outrage we can collectively 
muster. As cochair of the Older Americans Caucus, a bipartisan group of 
colleagues focused on issues of particular significance to seniors, 
please count on my continued and vigorous commitment. I am already 
working with key House colleagues on specific legislation to repeal the 
new law's barriers to drug reimportation and negotiated discounts.

                          ____________________