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Energy Policy Act of 2003-Conference Report-Continued

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Location: Washington, DC

ENERGY POLICY ACT OF 2003-CONFERENCE REPORT-CONTINUED

Ms. STABENOW. Madam President, will my friend yield for a question?

Mr. REED. Yes.

Ms. STABENOW. I thank my friend from Rhode Island for laying out in a clear and concise way what our concerns are about this bill.

Madam President, wouldn't the Senator agree that our first goal should be to do no harm, rather than the items he is talking about? That the first goal of any plan to provide Medicare prescription drug coverage should be to make sure people are paying less and getting more coverage and getting more help? This bill doesn't do that, does it?

Mr. REED. I concur with my colleague from Michigan. Our first goal should have been to do what we told seniors for years we were going to do: help them buy pharmaceuticals, not change, undermine Medicare but to help them buy pharmaceuticals.

We could have applied all that $400 billion to do that. We didn't. We have stabilization funds to encourage private health concerns to compete with the traditional Medicare Program; we have health savings accounts, with billions of dollars there to encourage the insurance industry to sell health care plans to individuals. All of that very scarce money could have been used simply to say how much can we help the seniors to buy drugs and maintain our program. I agree with the Senator.

Ms. STABENOW. If I may ask another question, what the Senator is saying is there are billions of dollars being used in this plan on items that have nothing to do with helping pay for medicine, helping people get their care; is that right? The Senator is talking about billions of dollars going to HMOs, to insurance companies to help them compete against Medicare, which costs less, and that money could be used to buy medicine for people?

Mr. REED. The Senator from Michigan is absolutely right. I said this before. This represents, in some respects, the greatest bait and switch in the history of the Republic. Seniors think they are getting pharmaceutical protections, and they will wake up and discover the Medicare Program they thought was there forever has been changed irrevocably.
Indeed, even the pharmaceutical protection is not that extensive, comprehensive, or effective. The Senator's point about the cost of traditional Medicare is well taken. We already have experience with this. We have had the Medicare+Choice plans. These are private plans that are not able to provide a benefit as cheaply as traditional Medicare.

The 2003 Medicare trustees report estimated that reimbursement from managed care enrollees would exceed traditional Medicare costs. We are reimbursing HMOs more to care for their Medicare beneficiaries than we are through the traditional Medicare Program. We know that. That is 2003. That is the report of the trustees of the Medicare system. Yet we are still under this illusion that if we pour more money into the private HMOs through slush funds, through premium support-through all sorts of mechanisms-somehow we will change the reality.

We are not going to change the reality. The reality is that this general Medicare Program is efficient, is effective, it has stood the test of almost 40 years, and it is a system that I think every American sees as being effective, efficient, and, indeed, an important part of their family's well-being in the future as it has been in the past.

Ms. STABENOW. If I may continue with questions, when the Senator is saying this shifts money to HMOs and to insurance companies, I assume-at least my understanding of HMOs is-you don't choose your own doctor. We are talking about seniors who now can go anywhere. I know in Michigan, they can go from the Upper Peninsula over to Detroit over to the west coast and the cost is the same. They can choose their doctor and go to the hospital they want.

Madam President, is it true that what Senator Reed is talking about will take away people's ability to choose their own doctor and hospital?

Mr. REED. The Senator from Michigan is right again. Not only do you not have the ability to choose your own doctor, but sometimes it is the HMO that chooses you. We had the experience in Rhode Island of seniors signed up for HMO programs and the HMO said: We are not making enough money; we are leaving. They left the seniors high and dry. They found care by going back to the general Medicare system or another HMO. They found coverage, of course.

This is a one-way street. It is not a two-way street. You get to do what they tell you you can do. That is the way they make money. It is a profit-making enterprise. Frankly, there is nothing wrong with that, and if we were the managers of these companies, we might be pursuing the same techniques of carefully selecting our beneficiaries and questioning the doctors in every instance about whether this procedure is right or wrong. In fact, the greatest criticism of HMOs comes not from seniors but doctors. They can't abide working with them. It is accountants, not health care people, who are making the decisions.

We are setting this system up again. It is unbelievable, in some respects, that having had the experience of Medicare+Choice, having had the experience of a private insurance system that wouldn't touch a senior in 1965, and having the success of Medicare, we are entertaining these notions as if this is a good change, this is a good thing. We haven't learned.

This represents a triumph of aspirations or hope over the facts and reality of 30-plus years of experience and of the dynamics of the marketplace.

I thank the Senator from Michigan for her intervention because it has been useful in clarifying the discussion.

There is one other area that concerns me, and that is the notion of means testing. In the doublespeak of this bill, it is not means testing, it is income relating. It is like cost containment and premium support. It is income relating. It is really means testing.

What it does is it begins to lower the effective subsidy that the Federal Government provides the seniors based on their income. Frankly, starting off at a level of $80,000-you may say, well, maybe it is not too bad; maybe people that comfortable should be able to pay.

The point is, it begins to add another way in which we will segregate participants in the Medicare system because if your subsidy falls from 75 percent, which is what it is roughly today, down to 20 percent, that will be wealthy Americans, if this plan goes through, what it does is start raising questions: Why should I be in Medicare?

If I have to pay copays and I have to do this and I only get small support, why should I be in Medicare? A multiple class of health care is being created in this country. For all these reasons, I hope we have time to debate. I hope we have time to look at the legislation very carefully and not in the last few moments vote because time ran out.

I yield the floor.

The PRESIDING OFFICER. The Senator from Michigan.

Ms. STABENOW. Madam President, I ask unanimous consent that Senator Clinton be allowed to speak following my remarks.

The PRESIDING OFFICER. Without objection, it is so ordered.

Ms. STABENOW. I first want to again commend my friend from Rhode Island for his comments in laying out the concerns that many of us have. In thinking about this and thinking about my coming to the Senate, I came with a very important goal. One of my top priorities has been to help create a real comprehensive Medicare prescription drug benefit. Part 2 of that is to lower prices for everyone, for our seniors, so that the Medicare dollars, those precious dollars, can be stretched farther, but also for our businesses who are paying for very high health care costs.

We know about half of that is due to the explosion of prescription drug prices. So for businesses, for workers, for families, we have, I believe, an obligation to do everything we can to create more competition and more accountability to bring prices down. I came to the Senate with those two goals for health care for our seniors, as well as lowering prices for everyone.

Even though the bill that passed the Senate was not at all what I would personally have written, it had good bipartisan give-and-take. We passed a bill that I was willing to support in the Senate. Even though I believed it was just a first step, there was much more that could be done. We did include a strong bill to close patent loopholes and allow unadvertised brands, called generic brands, on the marketplace for better competition. We did create a low-income benefit that I believe was very good for seniors and a number of other provisions, helping our rural health providers, as well as all of our doctors and hospitals and other providers.

Now we are in a situation where, unfortunately, instead of the bipartisan effort that we came forward with in the Senate, we have seen a plan put forward primarily by only one side, and, unfortunately, one that goes way beyond the scope of any bill dealing with prescription drugs.

On the positive side, it does have positive provisions that can be pulled out if we choose not to move forward with this bill. I would hope in a bipartisan way we could pull out providing for rural health, pull out provisions for our physicians who continue to be cut and threatened with cuts as they are providing care for our hospitals and home health and nursing homes. We can do that if we want to. We can pull that out and pass that. It is very positive.

When we look more broadly at this bill, it is not a comprehensive prescription benefit under Medicare. It is not even a good first step. As my colleague from Rhode Island said, it feels like bait and switch. We are talking about prescription drug coverage, and we are going to end up dismantling Medicare. We started out talking about: How do we help seniors pay for their medicine? How do we make sure folks are not choosing between food and medicine and paying the utility bill? How do we make sure we do not continue to have the explosion in prescription drug pricing that is affecting every part of our economy and every family in this country? That is what we started out to do.

Now we find ourselves in a situation where the fight that started to add a drug benefit to Medicare is turning into a fight to save Medicare as we know it, to save it as a universal health care benefit, the only one we have in this country.

I view this as a matter of values and priorities. I am very proud of the fact that in 1965, this Congress and the President of the United States came together and decided that we, as Americans, were going to say to those 65 and older and the disabled in this country that health care would be there for them; regardless of where they live, regardless of their situation, health care would be for them.

Now, what has happened? Well, we have seen the quality of life improve for older Americans. We have seen people live longer as a result of the benefits of Medicare. Those over the age of 85 are the fastest growing part of the older generation. Why? Because Medicare has made sure that health care is available, the doctor is available, the hospital is available, and so on. This is not a bad thing. This is a good thing. This is a great American success story that we should be celebrating together, not beginning the process of unraveling the promise of Medicare.

When I explain to folks what is before us, they look at me, frankly, like I am crazy. When we say, well, we have a deal for you; a quarter of Medicare beneficiaries would pay more for their prescription drugs under this plan, not less, not even the same but more. That is because 6 million seniors who are the poorest of the poor, who are on Medicaid, 6 million seniors who really are choosing between their food and their medicine would end up paying more under this plan than they would staying under Medicaid.

Another issue of particular concern to my State, up to 3 million seniors could lose their current coverage. In Michigan, I have a whole lot of folks who have worked hard their whole life, sometimes giving up a pay raise to get good health care and to get a good pension. In fact, in my State of Michigan, it is estimated that 138,810 Medicare beneficiaries would lose their retiree health benefits under this plan. How in the world can that be a good idea? How in the world can we say to people, "We have a deal for you; you are going to lose your coverage as a result of this plan"? We started out saying we are going to put together a voluntary prescription drug benefit under Medicare, and now we are seeing a situation where people would actually lose benefits.

In Michigan, 183,200 Medicaid beneficiaries, the poorest of the poor seniors, will pay more for their prescription drugs that they need, and 90,000 fewer seniors in Michigan will qualify for low-income protections-90,000 fewer than in the Senate bill that we worked on, on a bipartisan basis, because of the assets test and the lower qualifying income levels.

I see my friend from Iowa, who I know has worked very hard on this legislation and who led the effort in the Senate that resulted in a bill that many of us embraced because it was a true, honest, bipartisan effort. I thank him again for that. This bill does not reflect what we did in the Senate. It does not reflect what we did on a bipartisan basis.

Unfortunately, even though hours and hours have been spent on this issue, we find ourselves in a situation where too many of the folks we represent will be worse off than they are now. That is of deep concern to me.

I am also very concerned that we are not seeing the competition put into this bill that would lower prices. When we talk about bringing prescription drugs back from Canada in particular, which is right next to my State of Michigan, that is something near and dear to me and the people I represent. It takes only 5 minutes to cross a bridge or a tunnel to go to Canada to bring back prescription drugs. Many of them are made in the United States. In fact, most of them are made in the United States, sold in Canada for 50, 60, 70 percent less, and then brought back.

In some cases they are prescription drugs that are made by American companies but actually manufactured in other countries-Lipitor, manufactured in Ireland; Viagra, manufactured in Ireland. They have a way to safely bring those back to the United States, working with the FDA and the companies. With a closed supply chain, they can do that.

There is absolutely no reason we cannot do that through our licensed pharmacists in the local drugstore or the licensed pharmacists in the hospital. There is no reason we cannot do that if we want to do that. It is just as safe. It can be crafted to be exactly the same, and just as safe, by allowing our local pharmacists to bring back these lower priced drugs to the local pharmacy rather than doing what is happening today, which is too many folks getting in a car or a bus and going to Canada.

I do have concerns about folks going through the Internet more and more, or mail order where they are not working with a physician, not working with a pharmacist, and don't know the interactions of their drugs and may not know, in fact, where those drugs are coming from. That is something we ought to be tackling as well from a safety standpoint, but that is different from reimportation. That is different than giving licensed pharmacists the ability to do business with a licensed pharmacist in other countries and, in particular, Canada where their system is so much like ours in terms of safety.

I am very concerned that that provision is not in this bill, despite a heroic effort among House Members, a bipartisan effort to pass a bill that would do what needed to be done to create that competition.

Also, I am very concerned that we have a lessened provision in here relating to closing patents and allowing more generic drugs to compete on the market because those things would really bring prices down.

Although we have yet to see everything in final form, it is my understanding there is actually language that doesn't allow Medicare to bulk purchase, to negotiate on behalf of all of our 39 million seniors to get a big group discount to lower prices.

Essentially, on top of our poorest seniors paying more, those with coverage possibly losing their coverage, we are being told that our precious tax dollars and Medicare dollars are going to be forced to pay the highest prices for prescription drugs. In fact, because our uninsured pay the highest prices in the world, I think it is fair to say we would be paying the highest prices in the world for Medicare prescription drugs. That means the dollars are spread even thinner than they would be. In order for us to really spread these precious dollars as far as they can be spread, we need to bring prices down. This bill not only does not allow competition, it stops Medicare from group purchasing in order to bring the price down.

Thank goodness we don't include that language for the VA and our veterans. In the VA, we negotiate for our veterans for prescription drug coverage. We don't pay retail as the Federal Government. We don't pay retail. We get somewhere between a 30 percent and a 40 percent discount.

That is exactly what the pharmaceutical industry doesn't want to happen under Medicare, which is exactly why there is no competition in here. There is no ability to group purchase in terms of overall Medicare leverage.

This is a bill celebrated by the large pharmaceutical companies, because they know they are going to get a whole new group of folks, their customers, who will be locked into the highest possible prices.

I know they have a reason to celebrate. I understand. There are six drug company lobbyists-probably more with this bill but at least six-to every one Senator. They must be celebrating. But I know the seniors of this country and the disabled, when they see what is really happening-unfortunately, it doesn't take effect until 2006 so they won't really be able to see what is happening until then-but once they see it, they are not going to be celebrating. They are, in fact, going to be very angry.

We can do better than this. We have to do better than this. There is no reason we can't come together, as we did when this bill was before the Senate, and work out something that makes sense. People are counting on us to do that. They are trusting us to do that.

Unfortunately, what is in front of us is much more about making sure we are protecting special interests than the people's interests. This is much more about HMOs and insurance companies and pharmaceutical companies than what seniors are going to be doing tonight when they decide if they are going to be able to have dinner or they are going to have to wait because they have to buy the medicine tomorrow.

We can do better. I hope we will. If what comes before us is what we have heard and what I have described tonight, I will strongly oppose it and do everything I possibly can to join others to oppose this and send this back to the drawing board.

I saw some numbers this morning of a poll done in the last couple of days of those 55 and older, describing this plan. It was interesting to me, of those polled, 65 percent who were members of AARP said: Go back and go to work and get it right. Don't pass this.

I agree with those 65 percent of the people. I know they reflect the people I represent in Michigan. I urge we go back to work and get it right.

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