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Public Statements

Floor Statement by Senator John Kerry Medicare Prescription Drug Bill

Location: Washington, DC

November 23, 2003

Washington, DC -

Mr. President, I am here today to ask that we reject a Medicare bill that is a cruel hoax for seniors and a cynical giveaway to drug companies and the insurance industry. At this very moment, their lobbyists are all over the Capitol, in every corridor, working feverishly to pass a bill that has already driven up the stock of those very corporations. With the help of President Bush, they have produced a Medicare bill that lines the pockets of powerful moneyed interests and leaves America's seniors out in the cold.

This bill is less about prescription drug benefits and more a prescription to benefit big drug companies. America's seniors deserve better.

As I have traveled around the country, I have heard from countless seniors about their health care needs. They need and want more affordable prescription drugs and they need and want a quality Medicare plan that lets seniors choose their own doctors and their own hospital. I have met seniors across the country who have cut their medication dosage in half because they can't afford their prescription drugs. I have met people in small businesses who have seen their health care premiums more than double because drug prices are rising so fast. I have met seniors in New Hampshire who have no idea how they are possibly going to pay their rent and buy their drugs.

And I can tell you this. If you get past the advertising bought and paid for by the special interests to sell this bill as something that it isn't, you will notice that America's seniors are outraged to see the raw deal they are being handed.

For those Senators who are planning to vote for this bill, I would ask some straightforward questions:

o How are you going to explain to seniors that Congress stuck them with a Medicare plan which will force them into HMOs?

o How are you going to explain to seniors that your plan stuck them with a raw deal that raises premiums for those who don't want to go into an HMO by $56 to $200 a month?

o What are you going to say to the two to three million seniors who are actually going to lose quality retiree prescription drug coverage under this bill and get something much worse? We've fought for years to add a real Prescription Drug Benefit to Medicare to make seniors' lives better, but now by accepting a phony drug benefit Congress risks making it worse.

o How are you going to explain to seniors that no - Congress wasn't willing to let you buy cheaper prescription drugs from Canada - but yes Congress handed pharmaceutical companies new windfall profits of more than $139 billion?

o And how are you going to explain that this bill could only be passed in the House under the cloak of darkness in the early hours of the morning? And that the Senate jammed through a 700 page bill with only three days of debate - giving seniors little chance to understand it involves the biggest, most dangerous damage ever made to Medicare?

I ask those Senators who plan to support this bill, why are you holding a prescription drug benefit hostage to a backdoor deal to privatize Medicare - a deal that will help lobbyists, special interests, and pharmaceutical companies but betrays millions of America's seniors?

Seniors need relief from inflated prescription drug prices and they need it now. Nearly forty percent of Medicare beneficiaries report having no prescription drug coverage. Yet the average amount they must pay out of their own pocket for prescription drugs will more than double between 2000 and 2006 - it is on track to be $1400 the year this bill is scheduled to go into effect.

Seniors are right to demand more. Congress should be demanding more, demanding a real deal for seniors - a Medicare bill that does what it says instead of this phony bait and switch legislation, and a President who means what he says to America's seniors about their health care.

I believe we should go back to the drawing board and pass a real Medicare prescription drug benefit. This bill does more harm than good and seniors are not guaranteed that the price of their plan won't skyrocket. This bill prohibits the government from negotiating discounts for Medicare prescription drugs. It denies the opportunity for seniors to import reasonable drug prices from Canada and other industrialized countries. This bill is really about President Bush passing the buck on prescription drug coverage and passing the bucks from seniors to the pharmaceutical industry.

And, this bill is being pushed through Congress - without real debate, with too many backroom deals, and with blatant contempt for the public. The Republicans couldn't win a legitimate victory in the House yesterday, so they held open the vote for an unprecedented 3 hours of special interest lobbying until they got just enough votes to switch over to their side. President Bush twisted arms and twisted the facts until he won. Time and again, the President chooses to get cozy with lobbyists and the powerful instead of standing up for everyday Americans. This Administration's motto really should be "no special interest left behind." And this Medicare bill lays that record bare for all Americans to see.

This President goes around the country at a furious pace fundraising for his reelection plan. He has a group of insiders who provide his campaign with hundreds of thousands each in campaign cash - he calls them Rangers and Pioneers. Well it should come as no surprise that twenty-four Rangers and Pioneers are executives or lobbyists for the companies that will benefit from this Medicare bill. And they're getting a good return on their money.

This bill makes it easier for big drug companies to gouge seniors and jack up health care costs so that top executives can make millions. I'm all for people who work hard to make a living getting rich for doing so. But when drug company CEO's are making $40 million a year while the seniors they sell to are choosing between their medicine and their mortgage, that's not free enterprise, that's plain old greed. And this bill smoothes the way for even higher drug company profits.

In the past six months, drug companies, HMOs, and other powerful industries have spent $139 million in lobbying Congress to give them what they want. Now, they've gotten a bill that will give them an estimated $139 billion over the next 8 years. A thousand fold return on your investment isn't bad. You can say what you want about President Bush, but it's clear his powerful campaign contributors get what they pay for.

And it's easy to see why they make so much profit, given the bill does nothing to control the rising prices of prescription drugs. Without an effective means to restrain double-digit drug price increases, this bill does nothing to protect seniors from ever-growing out-of-pocket costs.

And will someone explain to me why we are in such a rush to do this? Are you concerned that the more this cynical bill is exposed, the less likely you will be able to pass it? What harm would be done if the nation takes some time to consider what's in this bill? The plan won't kick in until 2006 anyway, so it's not as if seniors are going to get the relief they deserve at the stroke of a Presidential signing ceremony. Nope, for the next two years, seniors will get a discount drug card to give them a 15 percent discount. It doesn't take an act of Congress to do this, though. Ask any senior today and he or she will show you the three to five of these cards they already carry in their wallets.

Seniors expect more than a discount card and with $400 billion on the table - if we were really crafting a drug benefit and allowing the government to institute cost-savings measures to tame out-of-control prices - we could deliver a better benefit sooner than 2006. The government could be ready to do this within months. It's the private for-profit companies this bill is attempting to lure into the market that will take time to warm up to the plan.

That's right. We're waiting until 2006 for them. This bill sets aside a $12 billion slush fund for the Secretary of Health and Human Services to use to entice private HMO-style plans to come into a market to offer a prescription drug plan to seniors. Larded up financial inducements are needed to attract these plans to the market because the risk is so high. Insuring seniors for drugs usually makes as much business sense as running out to sell a home owner's policy to someone whose house is burning down - in other words, you're going to lose money. But in the name of private "competition," and to prevent the federal government from running the program, this is what they came up with - a nice big cookie jar from which to dole out incentives for private plans to participate.

On top of giving them extra payments to participate, the bill does nothing to require that private plans operate efficiently. The Medicare program in its entirety now spends only 2 percent of total expenditures on administration. By contrast, many health plans in the private market often commit as much as 15 - 20 percent of their expenditures to administration. Every dollar that goes to administrative costs is a dollar not available to improve benefits for Medicare beneficiaries. Smart stewards of taxpayer funds should demand that private plans be more efficient if they want to participate. Instead, they are being rewarded from the slush fund and given advantages that only their lobbying influence could get written into law.

In addition, this bill squanders another $6 billion on tax breaks for the rich that will harm Medicare. The legislation would create tax-free, high-deductible, catastrophic health policies known as Health Savings Accounts, which would undermine the traditional Medicare program by cherry-picking the healthiest and wealthiest seniors out of the risk pool, thereby raising premiums for everyone else by as much as 60 percent.

The so-called "cost-containment" provisions in the bill add insult to injury. By essentially placing a cap on future Medicare spending, this bill would attempt to force future Congresses to reconcile Medicare's spending growth by cutting benefits, raising premiums, or increasing the payroll tax. This is unacceptable.

So what do America's seniors get from this bill? More than two million seniors who have good drug coverage now through retiree health plans will lose it. And about six and a half million low-income seniors - the very people we need to help the most - could get less drug coverage than they have now. That's a raw deal for seniors.

Under this bill, seven million seniors will be given this choice: pay more for Medicare and get forced into an HMO. Give up on choosing your own doctor and hospital - or watch your bills skyrocket.

The name of this provision in the bill is called "premium support." Like Clear Skies - which means dirtier air-or Healthy Forests - which means cutting down the trees -- it is an innocent sounding name for a plan that could raise Medicare premiums from about $60 to thousands of dollars. It breaks the compact of Medicare - in fact, what it really means is the beginning of the end of Medicare as we know it. Those aren't my words, but the proud boast of the author of this bill - House Ways and Means Chairman Bill Thomas. He said - and I quote - "To those who say that it would end Medicare as we know it, our answer is we certainly hope so." It's not surprising that Newt Gingrich is supporting this deal - he has long wanted Medicare to 'wither on the vine." Most Americans - and most Democrats-have a different hope - that Medicare remains secure and strong. And I intend to fight with everything I have to make that happen.

We need a real world, affordable Medicare prescription drug benefit for seniors. A plan that won't force seniors into an HMO, that won't undermine the coverage for seniors that are already getting help today, that'll be run by Medicare instead of an insurance company in search of a buck, and that'll send a real benefit to every senior - no matter whether their costs are average or high. That's a real deal for America's seniors.

But as I said before, right now, this bill is a raw deal for seniors and they know it.

They know this bill provides the skimpiest of benefits with holes in coverage and complex rules. The coverage gaps remain too high and seniors are still charged premiums even after their benefits shut down in the donut hole. We should go back to the drawing board.

They know this bill does not adequately protect them with a guaranteed government fallback plan with a national premium. Until this bill stops slanting all advantages to the private sector, we must vote it down.

They know this bill jacks up the out-of-pocket costs for seniors to visit doctors and hospitals. This is supposed to be a bill to add a prescription drug benefit, but along the way, beneficiaries got stuck holding the bill for an additional $25 billion in increased out-of-pocket costs from means testing the Part B premium and increasing the deductible and indexing it to inflation. This revenue raiser isn't to improve Medicare, but to give sweet deals, slush funds, and tax accounts to corporations and the rich. It's wrong and we must vote it down.

They know this bill fails to fix protections for low-income seniors and people with disabilities that currently rely on both Medicare and Medicaid for their coverage and should be defeated.

They know it and you should know it. This is a bad deal for seniors.

This week in November 1945, Harry Truman sent Congress a proposal for health care for Americans. He said, "Millions of our citizens do not now have a full measure of opportunity to achieve and to enjoy good health. And the time has now arrived for action to help them attain that opportunity and to help them get that protection." But powerful interests mobilized on Capitol Hill and defeated health care for Americans - especially for our seniors.

It was almost twenty years later that a young American President took up Harry Truman's cause and called for health care for America's seniors. This week in November 1963, the House of Representatives was considering John Kennedy's Medicare proposal. The same powerful interests were swarming through this building - but there was a spirit of hope and possibility. Now those who support this bill are breaking the promise of Truman and Kennedy that was finally fulfilled under President Lyndon Johnson.

This has been tried before. This week in November of 1995 - thirty years after Medicare became law -Speaker Newt Gingrich and his ideological allies shut our government down to achieve their radical objective of tearing down Medicare. Millions of seniors would have been harmed by these cuts - but we stopped Newt Gingrich, because President Bill Clinton and we Democrats stood our ground and defended Medicare.

We need to hold our ground and stand on principle again today.

This bill will hurt seniors more than help them. We should pass a bill that offers a real prescription drug benefit for Medicare. We need to rebuild Medicare, not sell it out to the highest bidder. Medicare is one of the best federal programs we have - this is not the time to shred it, but to strengthen it. This Congress - and President Bush - will be held accountable by American seniors and American history for the decision we make now.

Let's give seniors a real deal, a prescription drug benefit under Medicare that works for them, not a raw deal, a phony prescription drug benefit that provides benefits only for he powerful special interests that stand in their way.

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