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Medicare Prescription Drug, Improvement, and Modernization Act of 2003-Conference Report-Continued

Location: Washington, DC


Ms. STABENOW. Mr. President, it is interesting to listen to the debate with colleagues today on both sides of the aisle concerning this legislation. To hear the discussion from the other side of the aisle, there would be no reason at all to oppose the bill; there would be no reason at all, last night, to have to hold the voting boards open for 3 hours to twist arms to be able to change votes, to be able to get the votes to actually pass the bill; there would be no reason that overwhelmingly Members on the Democratic side of the House and the Senate who crafted and led the creation of Medicare would be opposed to this bill.

On its surface, what is happening makes no sense if, in fact, this is a good bill for seniors. There is no way, if this were a good bill for seniors and for the disabled in this country, that I would be standing here opposing it. There is no way my colleagues in the House of Representatives-some of whom were there when Medicare was passed, some of whom have championed health care and senior citizen services for decades-would have stood on the House floor and voted no if it was good for seniors and for the disabled.

On its face, that makes no sense.

For those who have worked for years on this issue, Mr. President, I actually came into public service over 25 years ago; I often joke that I was 5 at the time-I came into public service over the issue of senior health care in Michigan. That is what brought me into public service. Since that time, I have worked very hard to continue to improve services, access to care, expand home health care, to be able to modernize health care as we have changed with new technology, new medicines, and new opportunities. I was very pleased that the first bill I introduced coming to the Senate was a bill to lower prescription drug prices by allowing our local pharmacist to do business across the border in Canada and other States to lower prices. So I care very deeply about this issue.

Nothing would please me more than to be able to stand here today and declare a victory for our seniors and a victory for all Members because we have finally done the right thing. Seniors have waited too long, there is no question. They have waited way too long.

Unfortunately, under this plan, they are still waiting. Not only will an awful lot of people continue to wait, some of them will find instead of a step forward-which we all would like this to be-a step forward that I supported with the Senate bill, even though it was not all that I wanted it to be, but it was a bipartisan bill. It was truly a step forward. I supported it as something we could build on. Instead of this being a step forward for seniors, for too many it is a step off the cliff.

Let's look at what we are talking about, just the facts. For someone who is putting out $5,100 worth of prescription drugs in a year-which, unfortunately, is not a high amount given what people are having to pay for prescription drugs-if they are paying $5,100 for prescription drugs, they would have to have out of pocket under this bill $4,020 of that $5,100. They would still pay $4,020 for that $5,100.

Some would say-and I respect that-Well, at least it is something. It may not be much, but at least it is something. The question is, What are you giving up to get that less than $1,100 in help when you have a $5,100 drug bill? The first thing, you may be giving up your coverage altogether to get that benefit. Estimates are that 2.7 million retirees will lose their coverage as a result of this bill. That is about one out of four people in Michigan.

Some would say: Well, 75 percent will not lose coverage. That is great, if you are one of the 75 percent. But what if you are one of the 25 percent of folks who worked all their life, probably along the way gave up some pay raises to get a good health care benefit, may have made a number of tradeoffs to make sure in your retirement you and your family had quality health care?

To get a very meager amount of money for prescription drug help, one out of four folks will lose their benefits. We do not have to do that under a bill we passed when there was a Democratic majority in this Senate. That bill was brought forward under Senator Bob Graham's leadership and sponsorship. I was pleased to be a cosponsor. We had a bill where nobody lost their coverage. We do not have to write a bill where 25 percent of the retirees lose their private insurance coverage. It is all in how it is designed.

This is designed in a way to give incentives, unfortunately, for some employers to drop their coverage-not everyone, but if you are that fourth person when it is one out of four, that is 100 percent of you, 100 percent of your coverage and your family's coverage. So for those folks, this is not a good deal.

Well, let's look at some more. Who else isn't it a good deal for? Well, we are told that about 6.4 million people are low-income seniors who will have less access to the drugs they need, and possibly pay more. These are folks who are the poorest of the poor seniors. These are the folks who really are sitting down tonight at the kitchen table and deciding, do they eat or do they get their medicine?

This is not some platitude, some rhetoric. This is real for people where a dollar or two-dollar or five-dollar copay on a prescription makes the difference between eating, paying their electric bill, or having a roof over their head.

We understand from the Center on Budget and Policy Priorities that many of these 6.4 million low-income and disabled Medicare beneficiaries would pay more for their prescription drugs, possibly much more because they would be moved from Medicaid for low-income seniors-where many only have a one-dollar copay for their prescriptions-to a system where they would be paying more. In addition to that, there are certain drugs now that seniors need or the disabled need that they receive under Medicaid that may not be available under the private insurance plans.

So when they move this system to private plans, which is the intent as much as possible-where there is one or more private insurance plans, plus an HMO or PPO-when they move in that direction, they possibly limit the prescription drug choices of our seniors.

So under this bill, if you have folks who have a bill of $5,100, they still pay $4,020 of it. On top of that, they may be one of the folks who loses all of their benefits. And they may be one of the folks who actually ends up paying more and having less choice about the prescriptions they will receive.

On top of that, what do folks get? Well, they get the pleasure of knowing there is no new competition put in this bill to lower prices. There, in fact, is language which is stunning to me, absolutely stunning, that prohibits Medicare from bulk purchasing, group purchasing, and negotiating on behalf of all Medicare beneficiaries to lower prices.

So no wonder the pharmaceutical lobbyists are thrilled. I have spent a lot of time on this floor talking about how there are at least six drug company lobbyists for every one Member of the Senate. They earned their pay in this bill, that is for sure. I am sure they are high-fiving it all the way to the bank because what has been done in this bill is lock in a whole new group of customers, millions-39 million customers potentially-locked in at the highest possible prices. That is what we get.

So on top of continuing to get very little prescription drug benefit-and you could pay more; you could lose your coverage, but you might get some; you might get $1,000 out of about a $5,000 drug bill-but you are hooked into the highest prices because of the inability to negotiate as broadly as possible to lower prices, the inability to go to Canada.

For Michigan that is a pretty big deal. That is 5 minutes across the bridge and the tunnel, and you can drop the prices in half-or 60 percent or 70 percent. We have, for years, been saying: Let the local pharmacists be able to do business to bring back safe FDA-approved drugs, with a closed supply chain so all the safety is there, to bring them back to the local pharmacies just as the drug companies do every single day. We are not talking about mail order. We are not talking about the Internet. We are talking about licensed pharmacists bringing back lower priced drugs, many of which we have helped to pay to make, to the local drugstores to lower prices.

So we are not seeing that. We are not going to see that in this bill. The prohibition continues. We are not going to see a strong bill to close patent loopholes, to be able to allow more generic drugs on the market to increase competition. There is some language, but it has been weakened. We actually have in the bill a prohibition on Medicare using their clout to lower prices.

The VA uses its clout for our veterans, and we do not pay retail for our veterans for prescription drugs. We get a 30- to 40-percent discount because, on behalf of the veterans, we use our clout, through the VA and the Federal Government, to negotiate a group price.

Well, the drug companies do not want that. I understand that. Their sole mission is to make sure their profits and their prices stay as high as possible, that they stop any competition and keep the prices high. I understand that. That is not our job. That is not our job. The seniors in this country, the families, the workers, the businesses that would benefit by more competition to lower prices-the taxpayers expect us to be fighting for them. When I look at this bill, it is shocking the extent to which that is not the case.

So we have a situation where one out of four people could lose their coverage. In a State such as mine, where we have a lot of retirees who have good benefits, this is a big deal. We have very low-income seniors, the poorest of the poor, living on Social Security, with no pension, trying to make it. They could pay more. Many of them will pay more. And we have everybody locking in to these high prices so that more and more we will see the Medicare dollars-the precious dollars we have-going for those high prices rather than helping more people on Medicare.

Then, to add insult to injury, in 2010-which is not that far away, much as we would like to think it is; basically, 6 years away or so, 7 years-this plan opens up a Pandora's box. It allows the beginning to experiment with privatizing Medicare.

It says-even though when folks, who had a choice between picking a private plan and traditional Medicare, 89 percent of them said, I like my Medicare, I am going to stay right where I am, only 11 percent picked private plans-even though that is the case, this bill now moves to put more people in the 11 percent.

This bill even says: We are going to take precious money from Medicare and give it to HMOs and insurance companies and we are going to actually pay them so they can compete with traditional Medicare. We are going to pay them more. We are going to spend more over here to get people over here.

Now, that would not seem to make sense if you are trying to look at the fact, as many have lamented, that we have a financial crisis with Medicare. We have a concern about not enough dollars under Medicare. Why would we set up a system that would cost more rather than less? Why would we set up a system that people have said they do not want? That does not make any sense, either.

This, starting in 2010, begins the process. It is called a pilot, but it begins a process where-instead of being in this column, where you can pick your own doctor and you know what you are going to pay, and you know what the copay is, and you know what the premium is; it does not matter where you live, you can have access to Medicare; in Michigan you can be up in Iron Mountain or Marquette or Houghton or Escanaba or Sault Sainte Marie in the upper peninsula or in northern Michigan or Detroit or Three Rivers or Lansing or Grand Rapids; you know you have Medicare; you know you can go to the doctor of your choice, the hospital of your choice; and you have health care coverage-now what they are putting in place, starting in 2010, is a system where the folks who look at analyzing this have said, for those who go into this privatizing process, you would be given, essentially, a defined contribution instead of a defined benefit.

You would be given what some call a voucher, some call it a contribution, X amount of money that you could then purchase between a private plan, an HMO, or traditional Medicare. It would begin to diffuse and pull people out into different kinds of plans. Some people have asked: What is wrong with that?

Unfortunately, what happens is that if you are healthy, you are a younger senior, you are going to get a better rate going to a private insurance company or into an HMO. So you may go in that direction. And gradually what happens is that they all have different rates, different costs, cover different things, cover different doctors. In some, you have your own doctor; in some, you can't have your own doctor.

What happens with traditional Medicare? Those who are the sickest, the most elderly, the most disabled, who can't get a good rate outside of traditional Medicare, will stay. The experts tell us the cost of Medicare will go up; because there are sicker, older, more disabled people here, and we are going to see increases. It has been estimated there will be a 25-percent increase over time in those costs.

What happens in the long run in that system? Gradually Medicare will have more and more costs, fewer and fewer people, and we will have what Newt Gingrich said he was hoping would happen or he expected to happen; that is, Medicare will wither on the vine.

It will take a few years. We can say: We are not going to be around then. It doesn't matter to me.

But what we vote on in the next couple days will begin a process that will unravel what has been one of the greatest American success stories ever-Medicare. That is what we are seeing happen here. Someone like myself, who cares so deeply about Medicare, who cares so deeply about providing prescription drug coverage and lowering prices, has to say, no way, no way will I support this.

I understand that there is a major philosophical difference-I respect that-between those who never supported Medicare, who view it as a big government program. I know that. I know that when Medicare originally passed, there were only 12 Republicans who supported it. There is a big philosophical difference.

I say Medicare is a big success story, so is Social Security. Other colleagues say: Big government program, it needs to be privatized or eliminated. Let folks go to the private sector. Let them buy insurance.

Prior to Medicare, half the seniors couldn't find or afford health insurance. They couldn't find it or afford it. Ask folks today, ask a small business person who is trying to find or afford health care, ask somebody who is a single entrepreneur or in a small nonprofit or single business person in their own private consulting business how easy it is to find and afford health insurance. We need to be addressing those issues.

I find it ironic that when we need to be addressing that and creating bigger insurance pools so that we can actually lower prices and create more access to health care and work with the business community to do so, this bill does exactly the opposite. It unravels the only piece we have had that has worked because it takes 39 million people, puts them in one plan-the sick, the healthy, the older, the younger. Because it spreads the costs and the risks in such a large pool, they have been able to keep the administration down, keep the growth in the program down. It has worked.

On the face of it, we would say: Why in the world would we want to change that? Why in the world would we want to create a system where it costs 2 percent right now to administer Medicare; private HMOs, it costs 15 percent? And we would set up a way to begin to move to this?

If we have a financial crisis with Medicare, I would argue it is because of a self-inflicted set of decisions. The tax cuts passed 2½ years ago were paid for by Medicare and Social Security. We would have dollars to be able to take care of everything we want to do with Medicare right now, and Social Security, if it were not for a decision that was more important-to give to those who already have great opportunity and have done well with it. It was decided it was better to give to them and hope it would trickle down to everybody else rather than keeping our promises to Medicare and Social Security.

So now folks say: We have to change it because the resources are gone. Well, the resources are a problem because of decisions made by this Congress and this President.

Even with that, if you say, well, we can't sustain Medicare as we know it, why would you then say, I have an idea: because Medicare is in crisis and because there is going to be a problem down the road funding it, let's make it more expensive? That doesn't make any sense. It doesn't make any sense at all.

It only makes sense in two ways: One, if you just consider Medicare a big government program and you believe everything should be done in the private sector, then from your standpoint, paying 15 percent instead of 2 percent is OK. But I think there is a broader issue at stake. The underlying focus, unfortunately, is that the folks who want to move us away from Medicare are the folks who benefit by this system. And even more than the insurance companies and the HMOs, that are going to have to be paid more to entice them into this, the folks who are benefiting are in the pharmaceutical industry.

What this battle has always been about is making sure that if we are going to provide prescription drug coverage, we are not doing it under one plan where all 39 million seniors are in one plan and they can get together and have the clout to force a group discount.

That is what all this is about. All of it is about the pharmaceutical industry that fought for years to try to make sure we would not have a prescription drug benefit because we could then get a group discount.

But then a couple years ago they changed their strategy. They said: OK, well, if we are going to have a benefit-because it is clear that seniors need help and we are not going to be able to stop it because seniors need help, something is going to happen-let's change our strategy and make sure that this is a plan that is putting seniors in a lot of different pots, lot of different insurance and HMO pots, so they can group purchase a little bit but they won't have the clout of 39 million people, they will have the clout of just a few, a little bit here, a little bit here, a little bit here; and let's make sure we don't allow any new competition; and if we were really good, we would even write in the bill that Medicare can't negotiate on behalf of everyone for a group discount.

I am sure that was their big wish list. And, lo and behold, in this great big bill, most of which has nothing to do with prescription drug coverage, they got it. They got it.

Because they got it, someone like me, who wants more than anything to see seniors helped in paying for their medicine, has to stand up and say, no, no way, no way is this thing a good deal for the seniors of this country.

(Mr. BOND assumed the Chair.)

Ms. STABENOW. Mr. President, I want to speak briefly to one thing that I believe in the bill is a good deal. There are positive things. I don't think it is all a negative bill. I think there are positive things in it. I know there are people who have worked hard, including our occupant of the chair, who led efforts to work in a bipartisan way and tried hard to get the right thing done.

On balance, there is no way I can support this bill, but there are some good provisions in it. I believe there are provisions in this bill that, right now, we could pass overwhelmingly, on a bipartisan basis, if we were to pull them out, take away all the bad provisions, and start over on prescription drugs.

I would simply say that to have no bill is better than to have a bad bill. Let's go back to work and get it right for our seniors. Absolutely, they have waited too long. They have waited so long to get this, and they are saying, I waited so long and this is what I got? So let's go back to the drawing board. We can do it quickly if we want to and get it right-lower prices, real prescription drug coverage.

But there is one section I believe we have a tremendous sense of urgency on right now. I know that my distinguished colleague in the chair has been a leader in this effort, and that is our rural providers and what happened with our hospitals, home health agencies, and doctors, and the cuts they have had to take. I want to speak to the fact that I am frustrated that we have not, before now, been able to help our providers.

I was in the House of Representatives in 1997 when we passed the balanced budget agreement at that time, putting into place certain reductions for providers. Unfortunately, since that time, they have seen cuts of twice as much as was originally suggested would happen at that time. It is the health care delivery organizations that will lose reimbursement. Frankly, the citizens of Michigan, indeed the citizens of the country, lose care when our providers are not given the assistance-the dollars to cover the care they need to be able to deliver.

I have been working since that balanced budget agreement in 1997 to turn that around. In fact, the very first amendment I offered on the floor of the Senate to the budget bill was to stop the 15 percent cut in home health care that was scheduled to take place. We have known about this latest round of cuts since December of 2000. We knew it was coming. At that time, we enacted a Medicare relief package, but we knew there was going to be another 15 percent cut in home health or a $1,500 cap on physical therapy services.

Unfortunately, there were a number of cuts that were just postponed at that time. We have known for 3 years that these cuts were coming, and there is no question that the portion of the bill that deals with help for our rural and urban hospitals, help for our doctors, nursing homes, home health agencies, physical therapists, all of the other providers of Medicare services need to be addressed. We need to fix that. We need to stop the cuts that are stopping services from being provided.

If health care providers are not able to get reimbursed for their services at a reasonable rate, we know they are going to simply decide not to serve Medicare recipients. Too many of them have made that decision-not because they wanted to but because they felt they had to. We know patients cannot simply decide not to seek care. It is our responsibility to make sure that providers are available in every community, every rural community, urban, or suburban area.

In the past 5 years, the numbers of physicians accepting Medicare patients has declined by 10 percent. I know there is a sense of desperation now as we look at this package. I have physicians saying to me: We know in the long run that this is not a good deal for seniors, not even a good deal for us; but we are so desperate for something that we feel we have to say yes to this package and then come back and fix it.

Of course, I say to them, I don't know if we can fix it. If we cannot get it right now, I have no confidence that we can come back and get the votes to fix this later and stop the bad things that I talked about earlier.

But I know that there is a sense of desperation. I know the annual increases in Medicare payment rates from my State of Michigan are less than the rate of inflation. In 2000, more than half of Michigan hospitals lost money helping Medicare patients. One of the things that happens when Medicare is cut and not covering the costs, as well as Medicaid, is that those costs-what it takes to care for people-is shifted to people who have insurance. So the providers are private sector providers now, and they are saying now that they have a stake in making sure that hospitals and doctors and other providers are reimbursed at a fair rate, covering their costs, so that those costs don't shift over onto our large businesses, small businesses, and so on. So we all have a stake in making sure that Medicare is paying a fair rate. Certainly our small businesses, which have seen their insurance rates at least double in the last 5 years, have a stake in this.

In my State, our big three automakers and other manufacturers struggle with issues of health care. So I am deeply concerned that the provisions in the bill that deal with our providers be passed.

This next round of cuts in 2004 to Michigan providers would be about $69 million to our hospitals; $53 million to teaching hospitals; $70 million to nursing homes; $120 million to physicians; and for independent home health care agencies, $16 million. Altogether, it is about a $329 million cost.

My concern is that these desperately needed funds are being held hostage in this bill. If we were addressing this package independently, I believe we would have overwhelming bipartisan support, if not unanimous support, for these provisions. They are long overdue. Many of us have been saying now for 3 years that this needs to get fixed. Our hospitals desperately need help, as do doctors, home health agencies, nursing homes, et cetera. And we need to do this now. But I am concerned that it is put in the middle of a bill that is not in the long-term best interest of these same providers.

I spoke a minute ago about how the highest possible pharmaceutical prices are locked into this bill. Because the highest possible prices are locked into this Medicare bill, as soon as the increases to providers are done with in this legislation, and because of the increases in pharmaceutical prices every year-we are seeing 12, 13, 14, 18 percent increases every year-I believe our providers will be in great jeopardy of being cut significantly once again, because an explosion in prescription drug prices will not have any accountability. There will be nowhere to go but back to the doctor to cut, back to the hospital, back to the home health agency, back to the nursing home, the physical therapist, the cancer services. There will be no place else to go. So even though my good friends, who are desperate, feel they have to support this package, which they know is not good for them a few years down the road, I believe we can do better by pulling that language out and today making it clear that we are not going to hold those who provide health care to seniors and the disabled hostage in this legislation.

We are not going to hold them hostage to a broader bill where there is such disagreement and controversy. I believe it is up to us to pass this legislation today.


Mr. President, I ask unanimous consent that the Finance Committee be discharged from further consideration of S. 1926, which is cosponsored not only by myself but Senators GRAHAM, CLINTON, MURRAY, LEAHY, DASCHLE, PRYOR, LEVIN, CANTWELL, and SCHUMER-this is a bill to restore Medicare cuts to providers-that the Senate proceed to its immediate consideration; that the bill be read a third time and passed; and that the motion to reconsider be laid upon the table.

The PRESIDING OFFICER. Is there objection?

Mr. GRASSLEY. Mr. President, as chairman of the Senate Finance Committee that has jurisdiction over the legislation, and I want to take a good look at it, I object.

The PRESIDING OFFICER. Objection is heard.

Ms. STABENOW. Mr. President, if I may take another moment, that is very disappointing to me. I believe our providers need help now. We can do this in a bipartisan way. My legislation would allow that to happen immediately. I will continue to work to make sure that happens.

In conclusion, I say to all of my colleagues, we can do better for our seniors than what is in this bill. I would like very much if we would all vote no and go back to work and get it done right. I thank the Chair.

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