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Public Statements

Prescription Drug and Medicare Improvement Act of 2003

By:
Date:
Location: Washington, DC

PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT ACT OF 2003

    Mr. HAGEL. Mr. President, I wish to acknowledge my colleague, the distinguished Republican assistant majority leader, for his remarks.

    I see Senator Kennedy in the Chamber.

    Senator Kennedy, thank you for your leadership.

    I have a statement, and my understanding is that we will then rotate statements on both sides for the rest of the afternoon.

    Over the next 2 weeks, the Senate will begin a historic effort to reform and strengthen Medicare. What we do here over the coming weeks will affect every American and future generations. Health care is a defining issue for our Nation. We must take the long view and recognize that if we do it right, the changes we make in health care, in the delivery of that care, will result in improved access to quality care and lower costs for Americans well into the future. This must be our objective.

    The Senate Finance Committee bill represents a good solid beginning. The Senate Finance Committee, under the leadership of Chairman GRASSLEY and Ranking Minority Member BAUCUS, deserves great credit for its hard work and efforts in bringing the bill to the floor of the Senate. Over the next 2 weeks, the Senate will work with members to improve upon their bill.

    Medicare is one of the two largest programs in the Federal Government. Today, Medicare covers over 40 million Americans, including 35 million over the age of 65 and nearly 6 million younger adults with permanent disabilities.

    Medicare serves all eligible beneficiaries without regard to income or medical history. It is projected to pay out $269 billion in both Part A and Part B benefits this year. This accounts for 13 percent of the Federal budget and $1 out of every $5 spent in America on health care.

    In 1965, when Medicare was created, only about half of America's seniors had health insurance and fewer than 25 percent had adequate hospitalization insurance. Now, because of Medicare, nearly all seniors have coverage. Medicare has been good for seniors and has become a dominant part of the U.S. health care system.

    But Medicare does more for seniors than protect their health. Medicare improves their quality of life. Since Medicare was enacted, people are living longer and living better. Life in America has changed dramatically over the last 40 years, especially health care.

    Medicine today addresses all conditions and diseases, with a special emphasis on preventive medicine and management of chronic conditions. This includes an emphasis on prescription drugs, diet, exercise, and lifestyle—health dynamics that were not given much consideration when Medicare was enacted in 1965.

    Medical technology has exploded, and we have experienced a revolution in the development of new and effective pharmaceuticals. Outpatient treatment and prescription drugs have become mainstays of medical care, but the Medicare Program does not reflect these changes in health care. Like medicine itself, the Medicare Program must adjust and reform to address these new realities in health care delivery, consumer demand, and costs. Medicare is a 1960s model trying to operate in a 21st century world. Our goal in this debate is to bring this valuable program in line with today's health care needs in a responsible and sustainable program and prepare for the future.

    As we look forward, we should also heed the lessons learned when Medicare was created. When Medicare was enacted in 1965, the Federal Government's lead actuary at the time projected that the hospital program, Medicare Part A, would grow to $9 billion by 1990. But the program actually ended up costing more than $66 billion by 1990. Even after adjusting for inflation and other factors, the cost of Medicare Part A in constant dollars was 165 percent higher than the official Government estimate according to the actuary who produced those numbers. In unadjusted dollars, actual costs were 639 percent above estimates.

    A 1968 Tax Foundation study found that public spending on medical care had nearly doubled in just the first 3 years of Medicare. A recent example of these accelerating costs is that since 1999, drug prices have risen about 20 percent. The average cost of these lifesaving pharmaceuticals will likely continue to increase, placing further pressure on seniors with fixed incomes.

    In addition to the internal problem of the changing realities of health care, Medicare is facing a looming external program. The largest generation in American history, the baby boomers, is aging. These Americans—over 75 million—will be added to the Medicare rolls over the next few years. The baby boom generation has changed and shaped every market in which it has ever participated. Medicare health care will be no exception. We have a responsibility to address this demographic pressure now or risk the system collapsing under its own weight in the future.

    The task before us is immense but so is the opportunity. Although Congress has been working with health care professionals, we must continue to listen carefully to those who know most about health care. We need to assure the American people that the promises made to them will be kept and that seniors on Medicare today will not be forced to change or lose their benefits, but for the future enhancement and viability of Medicare, changes will be required. The American people must have confidence in the medical reform process, the process we use to reform Medicare. This is important because as we move forward, all Americans, especially seniors, must then have confidence in the results.

    Facing these challenges will require difficult decisions. There will be no perfect solutions. There will always be imperfect solutions at the end of the day. At the same time, we must be responsible with our efforts. We are adding a costly new benefit to America's largest health entitlement program. In making decisions, we must not discount or minimize what we know has worked and what has not worked.

    Much of the debate over the next 2 weeks will focus on prescription drugs. Medicare does not currently cover outpatient prescription drugs. Adding a responsible, sustainable, and meaningful drug benefit is a top priority for most in the Senate. Seniors are expecting to spend nearly $1.9 trillion on drugs over the next 10 years. Clearly, the Federal Government simply cannot take on all of that expense. But seniors need help. They need help now. More than one-third of Medicare beneficiaries have no prescription drug coverage.

    Mr. Joseph Antos of the American Enterprise Institute was quoted in the New York Times on Saturday as saying:

    These seniors are the last people in America who are paying retail. When I turn 65, I'd hate to be the only one in the pharmacy line who's not in some kind of pain.

    Also in Saturday's New York Times, Mr. Dana Goldman of the RAND Corporation, said:

    What you really want to do is insure against very high expenditures. A catastrophic plan would be a cautious approach to sticking your toe in the water.

    We should heed their advice as we move forward.

    Any Medicare drug benefit must be sustainable. The benefit must deal with the realities that people are living longer and better, and have higher health care expectations than ever before.

    A new drug benefit should strengthen public/private partnerships that work. Any new drug benefit must pay particular attention to those in greatest need who have no options today, but this should not be at the exclusion of other seniors.

    We must take care that we do not inadvertently stifle innovation in the private pharmaceutical, medical research, and healthcare sectors.

    We know advances in research and medicine have been the critical factors in our increased lifespans, better health, and improved quality of life. The public/private relationship in these areas has been essential to that success.

    The United States leads the world in medical innovation. Our actions over the next 2 weeks must not jeopardize that continued innovation but, rather strengthen it for the future.

    The special healthcare needs of rural areas are of great importance to me and many of my colleagues. What we do in this body over the next 2 weeks should enhance rural healthcare as well as urban healthcare.

    Tough choices and difficult decisions will have to be made. Not everyone will agree with the choices we make, but we owe it to the American people to face these challenges and produce a reformed Medicare program that will take America's seniors well into the 21st Century. That is doable, and I look forward to working with my colleagues in this important effort.

    I yield the floor.

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