[Congressional Record (Bound Edition), Volume 150 (2004), Part 4]
[Senate]
[Pages 4978-4980]
[From the U.S. Government Publishing Office, www.gpo.gov]




                    MEDICARE AND PRESCRIPTION DRUGS

  Mr. GRASSLEY. Mr. President, I rise to speak about the new 
prescription drug bill, a bill that is going to benefit senior citizens 
starting June 1 of this year on a temporary basis, and then in a 
permanent program to benefit senior citizens starting November 15, 
2005. If somebody wonders why a temporary program, why a permanent 
program, when we passed the first changes in Medicare in 38 years, very 
dramatic changes, by adding prescription drugs to the Medicare bill, we 
asked the people in the Department of Health and Human Services 
administering this new law how long it would take to put this new 
expansion and modernization and strengthening of Medicare into 
operation. They said they needed about 18 months to 2 years, probably 
about 6 months longer than it took to get the original Medicare bill in 
place after its passage in 1965. We didn't want seniors to have to wait 
18 months to 2 years to get some money from it, so there is a temporary 
program of the drug card that will save seniors 25 percent on drugs, 
and also the subsidy for low-income American seniors and disabled who 
are under $12,000-a-year income--a $600 subsidy for that. So we have a 
new prescription drug program.
  This was a relatively close vote on the floor of the Senate. I think 
about 10 or 12 votes separated those of us for it and those of us 
against it. We have had colleagues who have opposed this bill 
continuing several attacks, and some of those as recently as today, on 
this bipartisan legislation that was passed into law and signed by the 
President on December 10, last year.
  This law represents years of hard work by Republicans and Democrats 
alike. We had the chance to fulfill a commitment to our seniors last 
year. We took that opportunity and we have delivered. I am glad we did. 
For the first time in the history of Medicare, seniors will have a 
voluntary prescription drug benefit. For the first time seniors will 
receive, in addition to a drug benefit, a coordinated disease 
management program, better coverage of preventive screenings, and 
protection against catastrophic drug costs.
  In regard to the coordinated disease management program, what we are 
trying to do is zero in on the 5 percent of the seniors who are 
responsible for 50 percent of the costs from Medicare. By zeroing in on 
them, we can enhance our quality of life during retirement and we can 
also save taxpayers some money by keeping people out of the hospital 
who otherwise might go immediately to the hospital if you were only 
concerned about getting sick people well. If you are concerned about 
keeping sick people from getting sicker, or keeping people from getting 
sick in the first place, it is always cheaper. It is always cheaper to 
prevent a sickness than it is to cure one. That is why we zero in on 
that 5 percent with coordinated disease management.
  The plan we passed helps to reduce drug costs by harnessing the 
buying power of 40 million Medicare beneficiaries to negotiate lower 
prices, and by speeding up the entry of lower cost generic drugs into 
the market. I remind my colleagues who insinuated that the bill was 
some fly-by-night idea cooked up in some back room and passed in the 
dark of night that over 350 outside groups supported this law, and that 
includes the AARP, the Alzheimer's Association, the National Council On 
Aging, and 347 other organizations. Do you think that 350 organizations 
in America that are concerned about the welfare of our seniors and the 
welfare of the disabled are going to put their reputations on the line 
for something that was hastily put together and passed at the midnight 
hour? That sort of statement does not do justice to Members of this 
body and some who are not even Members of this body now because it 
started 4 or 5 years ago. People then were working on a prescription 
drug program for seniors.
  This is something that was well thought out, well considered, 
compromised as necessary under the way we do business in the U.S. 
Congress, particularly in the Senate to accommodate bipartisanship 
because nothing gets done in the U.S. Senate that is not bipartisan.
  Now I would like to speak directly to some of the criticisms from my 
colleagues about this new prescription drug program, the strengthening 
and improvement of Medicare that prescription drugs bring to it.
  The first criticism is toward the administration because they are 
advertising on radio and television to the 44 million seniors and 
disabled of America. Probably a large percentage of them do not even 
know this program exists. The advertising is to tell them about the 
opportunities they will have under this new legislation. It is to alert 
them to the legislation and encourage them to get information about the 
legislation.
  Once a senior sees this sort of advertisement, then as I am talking 
to the seniors, I think of them having at least four areas where they 
can get help, at least four areas in the State of Iowa. One is the 1-
800 Medicare number. No. 2 is the AARP and the very good booklets they 
put out describing this. No. 3 in my State is the Department of 
Insurance that administers the federally funded SHIPP program where 
they can get one-on-one counseling from that program. Number 4, they 
can go to any congressional office and get help.
  What is this criticism about the administration advertising on TV? It 
is exactly what the law requires. Wouldn't you expect the President of 
the United States and the Secretary of HHS to carry out the law if we 
in this Congress said take X number of dollars and educate people about 
this legislation? I am surprised some of my colleagues would oppose 
providing seniors with timely and accurate and clear information about 
changes made in this law.
  Do you know why seniors need to know? Because this is not a program 
Congress and the President is shoving down anybody's throat. There are 
three words about this program that seniors ought to remember. One is 
it is voluntary. Second, it is universal; anybody who wants to 
participate can participate. Third, it is targeted because of the 
limited resources we have. It is targeted toward heavy subsidy to 
people with incomes under 150 percent of poverty, and targeted with a 
heavy subsidy to those who have catastrophic drug costs. But everybody 
benefits. On average, seniors are going to benefit to the tune of 50-
percent reduction in drug costs.
  In January of this year several Democratic Members of Congress 
accused the administration of robbing the Medicare Program. Those are 
their words. Then they asked the General Accounting Office to 
investigate whether the ads constitute a misuse of Federal funds.
  I use the General Accounting Office quite often to do investigations 
for me, so I don't have any problems with anybody asking the General 
Accounting Office to investigate anything. That is their job. They do a 
good job of it. But the General Accounting Office confirmed for these 
Democratic Members of Congress that the law mandates the Department of 
Health and Human Services to educate seniors, and that the ads are not 
political, as they were accused of being political. The General 
Accounting Office report makes clear that the Department has a 
responsibility, in fact, to inform seniors and to make sure they 
understand the new benefits and how they might help the seniors and 
disabled of America.

[[Page 4979]]

  What information is currently available to seniors may be coming from 
unscrupulous sources as well, because in the February 17, 2004, New 
York Times there was a feature story about people going door-to-door 
offering what they called Medicare-approved cards though none at that 
point, nor maybe even at this point, have, in fact, been approved. And 
enrollment doesn't even begin until May. Don't you think, for consumer 
protection, people ought to know something about this legislation?
  Again, in regard to scam artists, one Federal official said these 
artists are fraudulently impersonating or misrepresenting Medicare by 
telephone and by door-to-door visits to beneficiaries' homes. In some 
cases, a caller obtained personal information about beneficiaries 
before even visiting their homes.
  These ads are not propaganda as confirmed by the GAO. They fill an 
important void that not only educates American seniors but will also 
prevent criminals and scammers from taking advantage of and potentially 
harming America's seniors and disabled.
  Educating our seniors on the new Medicare Drug Modernization Act is 
not only required by law, it is the right thing to do.
  If I could refer to another criticism of this legislation or maybe 
something that happened since the legislation, these accusations we 
have heard, that the so-called true cost of the Medicare bill was 
somehow hidden from Congress before the final vote, is simply political 
election year hyperbole.
  The opponents of the drug benefit are making this claim because the 
final cost estimate from the Center for Medicare Services, Office of 
the Actuary, was not completed before the vote took place.
  Let us be very clear. The cost estimate was not withheld from 
Congress because there was not any final cost estimate from the Center 
for Medicare Services to withhold in the first place. Their cost 
estimate wasn't even completed until December 23. That was 2 weeks 
after the President signed the bill, and a month after Congress passed 
it.
  So let us again be clear. We did not have from the Center for 
Medicare Services the official cost estimate on the Medicare bill 
before the vote because the bill had to be passed before they were 
going to come to a final figure. But we did have what Congress uses and 
the only figure we use in official estimates of anything. We had 
Medicare bill estimates from the Congressional Budget Office before we 
voted. And that is what Congress goes by.
  Even if we had had the Center for Medicare Services with some figure 
out there, that may have meant something to some people but there could 
not have been a point of order made on some estimate of the Center for 
Medicare Services because the only point of order is if it is contrary 
to the Budget Act. The Congressional Budget Office makes that 
determination.
  Around Congress, the Congressional Budget Office is God. Even if they 
are wrong, they are still God. They are the basis for determining 
whether a supermajority has to be required to move to legislation. If 
you violate the Budget Act and exceed the estimate of the cost, then 
you have to have a supermajority. We only go by the Congressional 
Budget Office.
  I happen to believe, as some people have criticized, maybe some 
Government official was muzzled not to communicate with Congress on 
something they believed. I happen to believe that no Government 
official should ever be muzzled from providing critical information to 
Congress. If that happened last year, that was wrong.
  These accusations about whether the information was withheld have 
raised questions as to whether Congress had access to a valid and 
thorough cost estimate for the prescription drug bill before the final 
vote. It should also be made clear that, while the cost analysis by the 
Office of the Actuary is perhaps helpful, it is not the cost analysis 
that Congress relies on, and it is not the one that Members make points 
of order against because we rely exclusively upon cost estimates of the 
Congressional Budget Office. It is CBO's cost estimate that we use to 
determine whether legislation is within authorized budget limits. For 
Congress, if there is a true cost estimate, it happens to be from the 
Congressional Budget Office. We had a true cost estimate from them. It 
is the only one that matters.
  When Congress approved a $400 billion reserve fund to create a 
Medicare prescription drug program, this meant $400 billion according 
to the Congressional Budget Office, not $400 billion according to the 
Center for Medicare Services.
  With all due respect to the dedicated staff who work at the Center 
for Medicare Services, Office of the Actuary, their cost estimates are 
irrelevant to our process of legislating, except to the extent to which 
a Member might want to have that as a factor. But it surely isn't going 
to govern what a majority of this body does.
  The Congressional Budget Office worked closely with the conferees, 
and the staff, on the prescription drug bill to ensure that a full 
analysis of projected costs was completed. The conferees and staff 
regularly and constantly consulted with the Congressional Budget Office 
throughout the development of the Senate bill, and also through the 3 
months of arriving at a conference committee compromise between the 
House and the Senate. The Congressional Budget Office had to work 
nearly around the clock and on weekends for a month to do a complete, 
thorough, and rigorous cost analysis on the prescription drug bill. 
That official cost estimate was available to every Member of Congress 
before the measure was presented to the House or the Senate for a vote.
  It is also pretty disingenuous for the opponents of the Medicare bill 
on the other side of the aisle to suggest that the pricetag for the 
Medicare bill causes them concern. The fact is, they have supported 
proposals that cost hundreds of billions of dollars more. Don't 
complain to me about a bill costing $359 billion, or maybe it was CMS 
coming up with a larger number when in the first place those 
individuals are supporting bills that cost $600 billion or $800 
billion--or in the other body.
  Last year, the Democratic proposal over there would have cost nearly 
$1 trillion, $605 billion more than our bill. In fact, as to the Senate 
Democratic proposal in 2002, when we had the debate on the tripartisan 
bill, when we had the debate on bills on that side of the aisle, we 
didn't pass them. But we had a long debate that summer. That Senate 
Democrat proposal was $200 billion more than the bill we enacted into 
law this year. Further, there were more than 50 amendments offered on 
the floor of the Senate during the debate on this Senate bill that 
would have increased the cost of the bill by tens of billions of 
dollars. Then people are complaining about $395 billion, or people are 
complaining about the cost estimate by the Center for Medicare 
Services, which is higher.
  The bottom line is there should be no doubt in anyone's mind that we 
had a true cost estimate for the prescription drug bill last year, and 
everyone had access to it before the vote. That source was our 
congressional God, the Congressional Budget Office.
  The impact on the Medicare trust fund is something also that needs to 
be addressed. I will speak about that a little bit. The trustees' 
report revealed yesterday the Medicare trust fund insolvency date has 
been moved up 7 years, to the year 2019. Most of the change is due to 
higher health care costs, changes in the economy, better data analysis 
and projection, and improved data on the health of beneficiaries.
  In the Medicare bill we just passed, we put money in there for 
enhanced quality care, particularly in rural America. Thirty States are 
below the national average of reimbursement. We gathered together in 
this Senate to pass overwhelmingly a bill to give equal treatment to 
rural areas that we give to urban areas on reimbursement for doctors 
and hospitals. That is responsible for 2 of the 7 years that Medicare 
is closer to insolvency than last year based upon the trustees' 
estimate.
  We all have to admit we have concern about the future solvency of 
Medicare.

[[Page 4980]]

We have to stay focused on improving and protecting Medicare for future 
generations. We have to do this while not jeopardizing access to care.
  Another topic discussed this morning was the prohibition on 
negotiating. There is a paragraph in the bill that says the Federal 
Government cannot be involved in the negotiation for drugs. That was 
put there for a specific purpose. We want to keep the Federal 
bureaucrat out of the medicine cabinet. We learned our lesson from the 
VA. I will give a personal experience I had in the last month. I have 
been holding several town meetings since the first of the year in my 
State to help seniors understand this prescription drug program they 
have to make some choices on. Since the first of the year, I have held 
meetings in 32 different counties. In Des Moines, IA, the first 
question I had after my presentation was from a woman who said her 
doctor said she ought to have such and such a pill, but the Veterans' 
Administration was not going to pay for it. Why? Because it probably 
cost more than some other drug VA thinks is just as good. But the 
doctor does not think it is just as good.
  We could have the same thing happening if the Federal Government is 
going to negotiate for all seniors. We do not need to have that. Our 
bill provides every therapeutic class have one of a kind available of 
every drug that is known to meet that need. We want the doctor and the 
patient to have access. We want to keep the Federal Government out of 
the senior citizen's medicine cabinet.
  Let me go into detail why we have it this way. First of all, the 
accusation is this legislation prohibits negotiation with drug 
companies. We have learned from 40 years of Federal employee health 
benefit plan about plans negotiating with drug companies and other 
health care providers to bring down costs. It has worked very well. We 
have different plans seniors can join to decide what kind of service 
they want. Then the plans are going to negotiate the drugs down. It has 
worked before. It can work now. It will work now. In fact, this is the 
only thing in the bill the Congressional Budget Office said was going 
to bring down the costs of the program. If the Government did it 
directly, it was going to cost more. That is what the Congressional 
Budget Office said.
  We are going to have negotiation with drug companies. This accusation 
could not be further from the truth. The truth is the Medicare 
prescription drug plans will be negotiating directly with drug makers. 
These negotiations are at the heart of the new Medicare drug benefit. 
The absurd claim the Government will not be negotiating with drug 
makers comes from the noninterference clause in the Medicare bill. This 
clause did not prohibit Medicare from negotiating with drug makers. It 
prohibits the Center for Medicare Services from interfering in those 
negotiations.
  Let me be clear. The noninterference clause is at the heart of the 
bill's structure for delivering prescription drug coverage to seniors 
and disabled. This clause ensures those savings will result from market 
competition rather than through price fixing by the Center for Medicare 
Services bureaucracy.
  This same noninterference clause was in the Daschle-Kennedy-
Rockefeller bill and the Gephardt-Dingell-Stark bill in 2000. It is 
almost identical to the noninterference clause in the Gephardt-Dingell-
Stark bill and the Medicare Modernization Act which was signed into 
law.
  The Congressional Budget Office has concluded the market-based 
approach in the new Medicare bill will result in higher prescription 
drug costs management factor for Medicare than any other approach being 
considered last year by the Congress.
  Here is what the Congressional Budget Office said about eliminating 
the noninterference clause in a letter earlier this year:

       The Secretary would not be able to negotiate prices that 
     further reduce federal spending to a significant degree.

  The Congressional Budget Office said in the letter:

       CBO estimates substantial savings will be obtained by 
     private plans.

  Let me be clear. Direct government negotiation is not the answer. We 
ran into that with the VA, the VA bureaucrats getting in the medicine 
cabinet of the veterans of America. The Government does not negotiate 
drug prices. The Government sets prices. The bill's entire approach is 
to get seniors the best deal through vigorous market competition, not 
through price controls.
  Even the Washington Post editorial page wrote on February 17:

       Governments are notoriously bad at setting prices, and the 
     U.S. government is notoriously bad at setting prices in the 
     medical realm.

  Price controls won't work, whether we are talking about all drugs or 
just so-called single-source drugs, as one of our colleagues from 
Oregon has proposed.
  The Congressional Budget Office said such a proposal would ``generate 
no savings or even increase Federal costs.''
  It would seem, then, the devil is in the details.
  We did not rely on the Center for Medicare Services for price fixing 
but instead created a new drug benefit that relies on strong market 
competition and creates consumer choices. This approach has been 
analyzed by experts as getting the best deal for seniors on lower drug 
prices.
  To sum up, it is an election year and plenty of people are using 
Medicare to play politics. The new Medicare law is a bipartisan 
proposal that resulted from years of work by both Republicans and 
Democrats. The new law creates a volunteer benefit that is targeted to 
low-income seniors and those with high drug costs. The new law lowers 
drug costs by speeding the delivery of new generic drugs to the 
marketplace, lowering costs to all Americans, not just those on 
Medicare. The new law also revitalizes the rural health care safety net 
with the biggest package of rural payment improvements in the history 
of the program. The AARP has made that clear when providing its strong 
endorsement that the Medicare bill ``helps millions of older Americans 
and their families'' and is ``an important milestone in the Nation's 
commitment to strengthen and expand health security for its citizens . 
. . ''
  I yield the floor.

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