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

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Date:
Location: Washington, DC

MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003-CONFERENCE REPORT

Mr. CRAIG. Mr. President, the Medicare conference report now before the Senate, brings to fruition President Bush's
early and strong commitment to prescription drug relief, and it reflects nearly 6 years of difficult congressional debate.

The Senator from Iowa is here in the Chamber. He has played a key role in shaping the final package, in hours and hours of work with our majority leader and with leaders from the other side, to try to strike a critical balance.

This historic legislation, like the 38-year-old program it seeks to reform, is indeed expensive, complex, and unweildy but it is a compromise I can and will support, although not without some very strong reservations.

This bill is a solid step toward accomplishing two core goals: Providing prescription drug relief to seniors in need, and strengthening Medicare's future through greater market competition.

This legislation also includes dramatic improvements in consumer choice through health savings accounts, and perhaps the best package of rural health care improvements Congress has ever considered. I know its impact on the rural hospitals of Idaho will be significant.

Despite its deep and undeniable faults, this bill offers a rare opportunity unlikely to return for several more years, if ever-years in which millions of seniors will continue to suffer for lack of needed drugs and years in which the retirement of America's baby boomers will draw ever closer, and the modernization of Medicare will become ever more urgent. No, it is not perfect, but to hold out for perfection would risk a permanent sacrifice of much that is good and necessary in this legislation.

As chairman of the Senate Special Committee on Aging, I have chaired several hearings examining many of the hard questions in this debate-including the long-term demographic and financial pressures facing Medicare, and the importance of integrating competitive alternatives into Medicare's future. I am pleased to see some of these themes reflected in the legislation before us today.

Mr. President, my reasons for supporting this legislation are straightforward:

First, the legislation provides long overdue drug relief for our Nation's seniors. Nearly every health insurance plan in America today contains drug coverage. It is time Medicare did, too.

Beginning in 2006, seniors who decide to enroll in this completely voluntary new program and will pay a premium of about $35 and will receive a 75 percent subsidy for the first $2,250 in annual drug costs, after meeting an initial $250 deductible. And after a senior's annual drug costs reach $3,600, Medicare will cover 95 percent, providing essential relief for those seniors with catastrophic drug needs.

Overall, the average senior enrolled in this program will see annual drug costs reduced by 44 percent to 68 percent. In the nearer term, prescription drug discount cards will be available, offering seniors drug discounts of up to 10 to 25 percent.

Second, I am very pleased that the bill devotes the greatest share of its relief to seniors of modest and low income, those who need it the most.

For these seniors, the relief will be even greater than in the basic package. In Idaho, nearly 35 percent of our Medicare beneficiaries are likely to qualify. Seniors whose incomes fall below about $13,500 for an individual or $18,200 for a couple will receive deeply discounted premiums and deductibles, and those whose income is below about $12,100 for an individual or $16,200 for a couple will have no premium or deductible and will pay only a few-dollar copayment for each prescription.

The important thing to keep in mind is that the proportion of seniors today who have no private drug coverage at all is relatively small-about 25 percent-and it is on these seniors, as well as those whose current coverage is inadequate, that this bill is focused. In short, those in the greatest need get the greatest benefit and that is as it should be.

Third, the bill before us today seeks to bring Medicare into the 21st century, not just by providing prescription drug coverage, but also by offering seniors the choice to enroll in federally supervised but privately operated health care plans-that same kind of choice and coverage currently enjoyed by other Americans under 65.

Medicare today remains weighted down by rigid bureaucracy and complex regulations-regulations that are already beginning to drive doctors and other health care providers out of the program. Even more distressing, the heavily bureaucratic Medicare Program has utterly failed to keep up with the kinds of medical innovations and coverage options most of the rest of us take for granted.

By contrast, this bill's new competing regional preferred provider plans will give seniors one-stop shopping for comprehensive and integrated coverage, including prescription drugs, preventive care, care coordination, and protection against very high catastrophic medical bills-benefits which are largely unheard of in today's Medicare Program. Even more encouraging, six large-scale demonstrations, beginning in 2010, will test direct price competition between private plans and traditional Medicare. Although not as extensive as I would have wanted, these competition-based reforms are nevertheless the most substantial steps Medicare has ever taken toward bringing marketplace innovation into the program.

Importantly, all of these new choices will be completely voluntary. Seniors who want to keep their current coverage and stay in the traditional Medicare will be free to do just that. No senior will see any reduction in any Medicare benefits under this bill. No benefits will be taken away-none.

Fourth, this legislation contains landmark improvements in the ability of Americans to take charge of their own health care through expanding the use of health savings accounts.

To a greater degree than ever before, this bill will permit individuals to build significant tax-free health care savings for use in meeting a family's health care needs, including long-term care. As we try to encourage those who are becoming seniors to acquire long-term health care insurance, here is a way to finance it and finance it with tax-free dollars. Together with high deductible insurance for very high medical expenses, this approach puts control of health care where it belongs-in the hands of the individual citizens of our country.

This is something I have been fighting for since I first came to Congress, and I believe this bill's health savings account provisions are among its most important accomplishments.

Fifth, I am tremendously pleased, as should be every Idahoan, that this bill includes an unprecedented package of nearly $25 billion in improvements for rural health care. Senator Grassley can be extremely proud of the work he has done to ensure the stabilizing of rural hospitals and rural health care. Most importantly, this legislation achieves a permanent evening out of rural and urban Medicare reimbursement rates. For far too long, doctors and hospitals in Idaho and other rural States have suffered under payment classifications and reimbursement levels that put them at a significant disadvantage-and that makes the already difficult task of providing rural health care even more daunting.

Sixth, the conferees have included, for the first time, a requirement that high income seniors (those making over $80,000 individually or $160,000 as a couple) pay slightly more in Medicare premiums than those who are less well off.

In the decades to come, I believe our children will thank us for recognizing that America's taxpayers simply cannot afford to continue subsidizing care for the wealthiest among us at the same level we provide for the less well off.

Finally, I believe it is important to recognize that the conferees have taken great care to include protections against something I know has concerned many seniors-namely, Will this bill cause me to lose the drug coverage I already have? The final bill includes very significant assistance to employer-sponsored plans to help assure their continued participation in retiree health care. Indeed, some are concerned that this assistance is, in fact, too substantial. But Congress's intent on this issue is clear: Seniors who are happy with the coverage they have today should be free to keep it.

The underlying framework of this bill is a sound one, and it follows the strong and guiding principles laid out by President Bush earlier this year-namely to strengthen traditional Medicare and keep it as an alternative for those seniors who want it-but also to provide a new foundation for the future, one built on choices, competition, and innovation.

This said, however, I remain gravely troubled by certain aspects of this bill.

First, it troubles me deeply that this legislation will add substantially to an entitlement program whose long-term future is already sobering in the extreme. Even without a new $395 billion drug benefit, Medicare is expected to spend nearly $3.9 trillion over the next 10 years-and by 2075, these costs will nearly triple.

Nothing can change the fact that desperately hard choices lie ahead, regardless of what we do this year. Nevertheless, what we sow today, future generations will reap.

Second, I am disappointed that the conferees chose not to adopt firm expenditure restraints if and when Medicare cost growth rises faster than currently projected. Nearly all honest observers predict that this bill will ultimately cost more than the $395 billion over 10 years that is now budgeted. Such a cost restraint measure would have gone a long way toward assuring future generations that we are serious about fiscal restraint and preserving a viable Medicare program for our children and grandchildren.

Third, I believe this bill should have moved Medicare more assertively toward a 21st century competitive approach, with an even greater role for private plans and the innovation they generate-an approach patterned, for example, after the highly successful program now available to Members of Congress and other federal employees. As it is, this bill makes a credible start in that direction, but much more remains to be done.

And finally, I am concerned by this legislation's very high level of complexity and prescriptiveness. Of course, Medicare legislation is never simple. However, this bill runs to many hundreds of pages and is very heavy with exceptions, rules, and carveouts-including literally dozens of provisions and billions of dollars relating to specifics of provider payment.

This bill's new competitive alternatives, if they succeed, are intended to take us away from this kind of micromanagement. Unfortunately, if the complexity of this bill is any guide, we may yet have a ways to go.

My concerns about this bill are very serious ones. However, on balance, I believe this legislation is a positive step forward for America's seniors, for the Medicare program, for Idaho, and for the country as a whole.

President Bush deserves tremendous credit for making Medicare and prescription drugs a top priority this year, as do Majority Leader Frist, Senator Grassley, and the other conferees for bringing us to where we are today.

Medicare urgently cries out for a better future, and America's seniors desperately need meaningful prescription drug relief. This legislation moves solidly toward reaching both of these goals, and I urge my colleagues to stand with the President and support its passage into law.

I close by thanking the Senator from West Virginia for his courtesy. I will adhere to our agreement. I yield the floor, and I thank my colleague.

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