Medicare Prescription Drug Bill

MEDICARE PRESCRIPTION DRUG BILL -- (House of Representatives - March 17, 2004)

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Mr. ALLEN. Mr. Speaker, will the gentleman yield?

Mr. PALLONE. I yield to the gentleman from Maine.

Mr. ALLEN. Mr. Speaker, I thank the gentleman for yielding and for leading this Special Order. And the case of Richard Foster, though his name may not yet be a household word, is one that needs some review. It is an example of what we have tried to explain to people, that the legislative process in this Chamber, the democratic process in this Chamber, has been corrupted by special interests. And those are strong words, but there are no kind words that fit what the Republican majority is doing in this House.

So let us just for the moment look at the case of Richard Foster. Back in June 2003, when the Medicare bill first came to the floor of this House, it came with a CBO, Congressional Budget Office, assessment that the cost would be $395 billion over 10 years. At that very time, the chief Medicare actuary, Richard Foster, had done a number of scenarios, all of which showed that the cost of the bill would be somewhere between $500 billion and $600 billion. He settled on around $550 billion.

He never told any Member of Congress what that projection showed. And why did he not tell any Member of Congress? Because his boss, Tom Scully, the head of Medicare for this country, told Richard Foster that if he told Members of Congress what his numbers showed, that it would cost $550 billion and not $400 billion, he, Tom Scully, would fire Richard Foster.

So here you have the chief Medicare actuary, under an ethical obligation, at least, to convey to the Congress of the United States information about what the Medicare law was likely to cost, and he could not say it because he would be fired.

Well, now look what has happened. The bill comes back in the fall and we have the long night, the 3-hour vote held open. And the process had been corrupted before that because Democratic Members from the House had been appointed to the conference committee, they were not allowed in the room. They were not allowed to attend the conference to which they had been appointed because the Republican chair of the conference would not let them in.

Now, if you try to explain this to people back home who read their textbooks about how American democracy is supposed to work, they do not believe you. They cannot believe that one party here, that the majority party would simply shut down the legislative process, would withhold information, would manipulate information.

And it continues today, because now that bill has become a law by the narrowest of margins, a bill which would not
have passed if the truth had been told about its projected cost.

Now what happens? Well, Health and Human Services goes out and runs TV ads. Many people have seen them. They say same Medicare, better benefits. And it is not true. We are witnessing a concerted effort by the administration, in close collaboration with the insurance industry and the pharmaceutical industry, to move 35 percent of Medicare beneficiaries out of the fee-for-service plan they have today into private insurance.

And why is private insurance such a problem? Well, it costs more. It costs a lot more. And Members on the other side of the aisle have come down into the well here and they have said Medicare is in financial difficulty, that we need to do something; and what we need are private insurance companies to take it over.

Well, nobody in Maine has ever said to me, you know, I am willing to give up my choice of doctors and hospitals, which I have under traditional Medicare, and what I really want is a choice of insurance plans. Send me those brochures. Send me those insurance agents. That is the way to take care of our health care for seniors. Nobody has ever said that.

The latest projections are that the insurance companies will need to be paid 20 percent more than it costs today to deliver health care to the average Medicare beneficiary. A 20 percent bonus. A 20 percent overpayment to the second biggest lobby here in Washington.

Mr. BROWN of Ohio. Mr. Speaker, if the gentleman will yield.

Mr. ALLEN. I would be glad to yield.

Mr. BROWN of Ohio. Mr. Speaker, I think it is intriguing what the gentleman from Maine (Mr. Allen) is saying about the whole Medicare structure and how my friends on the other side of the aisle and President Bush, in large part at the behest of the insurance industry, which sees huge profits in this Medicare bill, say that they want to privatize it.

One of the most important facts about Medicare public versus a private insurance HMO Medicare is administrative costs. Traditional Medicare, the Medicare that we know, that 85 percent of America's seniors are enrolled in, has about 2 percent administrative costs, while private insurance has administrative costs averaging between 15 and 20 percent.

So no wonder if we have privatized Medicare, it will cost taxpayers more, yet Medicare beneficiary seniors will actually get less.

Mr. ALLEN. Mr. Speaker, I just wanted to finish right now with a couple of comparisons.

The $80 million that Health and Human Services is going to spend to advertise this law, which does not take effect until January 2006, and Secretary Thompson made it clear why he was doing it, he said because there is too much criticism of the law. People do not understand that it is really the same Medicare. Of course, the author of the law in the House was quoted on television as saying, "To those who say this bill will destroy Medicare as we know it, my answer is, I certainly hope so." He has made it clear his goal is to destroy Medicare as we know it.

But I wanted just to finish up with this: $80 million in advertising to the American people. $80 million. Guess how much the President proposes to cut out of rural health care? One-half that amount, $39 million. We cannot afford $39 million to improve rural health care, but we can spend $80 million just to advertise a flawed Medicare bill to the American public.

The $80 million is more than the $58 million which the incoming FDA commissioner, Lester Crawford, says would be needed to establish a drug reimportation plan. So in other words, we are going to spend, according to the Bush administration, $80 million to run TV ads to help his reelection campaign out of the Federal Government, to promote a bill that is flawed, $80 million to do that, when we could spend $58 million and establish a reimportation plan that would allow seniors to buy their drugs from Canada without interference, and that would reduce their present drug prices dramatically.

Those are the priorities of this administration and the Republican Congress. And I do not know of anyone in my State of Maine who says those are the right priorities for the country.

Mr. Speaker, I thank the gentleman for yielding to me.

Mr. PALLONE. Mr. Speaker, I thank the gentleman for his comments; and before I yield to the gentleman from Washington, I just wanted to say when I was listening to the gentleman from Washington (Mr. Inslee) and his statement about Republican abuse of power, that is essentially what this is. This is an abuse of power by the President and by the Republicans in the Congress.

And when I listened to my colleague from Maine and he talked about how the Medicare administrator, Tom Scully, had basically threatened Richard Foster that if he told the truth about the numbers that he would be fired, what the gentleman did not mention and I will add, is, of course, what happened to Tom Scully. Tom Scully during all this, while this Medicare legislation was moving in committee and moving in the House, was negotiating to get a job, which he ultimately got, with the law firm that represents the pharmaceutical industry. He actually got a waiver from the President that allowed him to negotiate for the job.

Normally, the agency rules that he worked for say that you cannot go out and seek a job and try to find yourself a job while you are still in the agency working on this legislation. So the abuse is just unbelievable, and the fact that he got the waiver and everything.

Mr. ALLEN. If the gentleman would yield just for a moment, Mr. Speaker.

There is one other finish to this story. We are not sitting here on the Democratic sides of the aisle making all this up.
Yesterday, Secretary Thompson initiated an investigation into these facts: that Richard Foster was threatened with being fired if he disclosed the true cost of the Medicare bill. So now Health and Human Services itself is investigating what clearly, at least to my mind, was an ethical and perhaps a legal breach by this administration, but one that clearly was absolutely essential, absolutely essential to getting the Medicare bill to become the Medicare law.

Here again, we see a kind of distortion and misrepresentation of information that really has no place in the House of Representatives.