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Medicare

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Date:
Location: Washington DC

MEDICARE

Ms. STABENOW. Mr. President, I rise today to speak about the Medicare law that we passed and the newly announced Medicare discount card.

I, first, raise deep concerns about a recent report that has come forward from the Congressional Research Service which was made public yesterday. I read from an AP story and report made public on Monday by the nonpartisan Congressional Research Service that efforts to keep Richard Foster, the chief Medicare actuary, from giving lawmakers his projections of the Medicare bill's costs-$100 billion more than the President and other officials were acknowledging-probably violated Federal law.

It goes on to say:

Foster testified in March that he was prevented by then Medicare administrator, Thomas Scully, from turning over information to lawmakers. Scully, in a letter to the House Ways and Means Committee, said he told Foster "I, as his supervisor, would decide when he would communicate with Congress."

Congressional researchers chided the move. Such gag orders have been expressly prohibited by Federal law since 1912, Jack Maskell, a CRS attorney, wrote in the report.

I hope we are going to pursue this. We have a specific report indicating the administration may have violated a law that has been in place since 1912 that relates to information not given to us about the Medicare bill and about an employee, a Medicare actuary, who was told he could not share information, even though that was his job, even though he was asked to do so, another very troubling part of the whole Medicare saga as we look at this legislation.

Sadly, our seniors now must endure another major disappointment as they cope with the implementation of last year's flawed Medicare bill. Since the final agreement was hashed out in the middle of the night last year, seniors across this country have heard more and more frustrating news about the new Medicare law. The latest is the new Medicare discount card or, as some would say, nondiscount card.

Prior to the launch of the prescription drug card Web site last week, seniors discovered one outrage after another. First, they found out this bill had an undesirable benefit. For example, if you have $5,100 in prescription drug costs in a year, you still have to pay 80 percent of that-over $4,000. That is not the kind of benefit people in Michigan desire. When the benefit is explained to them in public forums where I have been participating, people are very upset. This is not the kind of benefit they have been asking for.

Second, they began to understand this legislation will undermine private health insurance and almost 3 million retirees will lose their private prescription drug coverage. About 183,000 people in Michigan, as a result of this bill, are predicted to lose the private coverage they worked for their whole lives and count on now in retirement.

Third, they realize approximately 6 million low-income seniors will have to pay more under this new plan than they did under their existing Medicaid coverage or their coverage will be more restrictive. Think of that for a minute. For the folks who are lowest income seniors, whom we all speak about having to choose between food and medicine, under this new law they will have to pay more-maybe only a little bit more, but every dollar counts when you are choosing between food, medicine, paying the electric bill, or cutting pills in half or taking them every other day. It is astounding the bill that was passed actually increased the costs for our poorest seniors.

Fourth, our seniors discovered there were no provisions to actually lower the prices of prescription drugs. That is amazing. Despite the House of Representatives overwhelmingly passing a bipartisan prescription drug reimportation bill to open the borders and bring back lower priced prescription drugs-in most cases, American-made or American-subsidized drugs-instead of that, which would lower the costs of some drugs up to 70 percent, it was summarily dropped in conference committee under pressure from the White House and the pharmaceutical lobby.

Fifth, at the last minute, the pharmaceutical companies pressured their allies in Congress to put in a provision that actually prohibits Medicare from negotiating bulk prices. Amazing. We are not even using the full leverage of Medicare to negotiate group prices. As a result, the Medicare Program cannot use its market power to get lower prices for prescription drugs, unlike the VA. We all know the Veterans' Administration negotiates deep discounts on behalf of our veterans. We actually have a situation now in the case of a husband and wife who are retired. The husband is a veteran and he is getting a major discount, possibly up to 40-percent discount in his prescription drug prices, and his wife, who is on Medicare, has to pay higher rates. That is not fair and it is not right. It needs to be fixed.

Sixth, a month after the bill was signed, all Americans discovered the administration deliberately hid certain cost estimates from Congress and the American people. These figures contain what some thought all along, that this bill would cost more than the $400 billion projected. Perhaps the lack of any provisions to help lower prices led to its higher cost. And now we hear from the Congressional Research Service that, in fact, the administration has likely broken the law in keeping that information from us.

Finally, to add insult to injury, our seniors are now seeing political television commercials promoting the new Medicare Program, paid for by American taxpayers, during the middle of an election campaign, and the ads are not accurate. The ads are not accurate and complete and they leave out some of the biggest problems with our new private card.

Let me speak now specifically to the card. First of all, this chart is not meant to be a joke. This demonstrates 50 different steps in the process of getting a Medicare prescription drug card. You do not necessarily have to take all 50 steps, but it is a very confusing process to wade through over 30 different cards to determine whether one of them is best for you. Your region may have access to other regions and may be able to apply for very complicated low-income assistance. I should say the low-income assistance is the one positive in this card. If you do manage to move through the complexity and a senior or a disabled person does qualify, it does provide $600 to help them pay for medication. This is very positive.

The Families USA study looked at this and indicated the application process for low-income drug subsidies is unusually cumbersome and is built on an untried application infrastructure. As a result, they estimate of the 7.2 million low-income seniors who would actually be eligible for the extra help-and we want each and every one of them to receive it-only 4.7 million will actually receive it because of this complexity.

The latest development is misleading. These so-called discount cards may actually mean higher prices also for seniors than they would otherwise get now without any new Medicare Program.

For example, seniors can get lower prices for prescription drugs by simply getting their prescriptions filled through a number of sources they have right now. There are a number of very good county programs in Michigan that I encourage seniors and families to take a look at that cost less than the Medicare discount card and actually provide more benefit.

We also found by a study just completed in the House of Representatives that purchasing through the Internet can be a less costly way to receive discounts. Let me give an example. Go to a Web site for the top 10 most used drugs by our seniors, for example, at drugstore.com. The yearly cost is $959. There is no annual fee. The total cost would be $959. Two other Web sites, the same thing: $990 and $993. If you go to one of two of the over 30 different private Medicare discount cards, one is called RXSavings, to get the same 10 drugs, supposedly at a discount, would cost more-$1,046, and you have to pay an annual fee of $29.95 in order to have the privilege to pay more. The end result would be $1,075.95. The same is true with Pharmacy Care Alliance. It costs you more than what is out there right now as discount cards, but you have to pay $19 to get the card, and in the end you are paying more. This is not a good deal for our seniors.

Let me give another example and actually suggest what we ought to be doing. I should mention that the average discount card is $30 for a senior. You have to have it for a year, and even though you cannot change your card for a year, the company giving you the card can change the list of the drugs that are discounted every 7 days. So you look at all the complexity, through all the cards, you pick the card that covers the drugs you use because you need that discounted amount, you pay your $30, and then 7 days later the drugs you need are not on that card anymore. This is not a good deal for our seniors.

What is a good deal for our seniors is legislation we have in front of us right now to allow us to open the border to safe FDA-approved prescription drugs coming back to our local pharmacy from Canada or other countries with similar safety precautions where we can literally drop prices in half. That is a good deal.

We have a bipartisan bill in front of us. A very large coalition of Senators has been working together. It is time to bring that bill forward to the Senate floor and to pass it.

Now, why is that better? Well, as an example, under one of the private cards, after you purchase your private card, Lipitor is listing at $71.19. It costs you $74.72 to get it under another card. But if we simply passed that bill, it would allow us to bring back those lower prices from Canada to the local pharmacy. You could pay $49.85. That is true over and over.

The real way to lower prices is to allow us to get the lowest price, whether it is in Canada or the U.S. or other countries where we can make sure that the safety is there, and bring back the prescription drugs to our local pharmacy. The other way is to give Medicare the clout to truly negotiate, as the VA does, to be able to lower prices for our seniors.

This law has so many flaws. I believe we ought to go back to the drawing board. We need to pass a meaningful prescription drug benefit. We can do so before the law takes effect in 2006. We can do better. I encourage our seniors to think very carefully and cautiously before proceeding with one of these private discount cards.

I yield the floor.

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