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

Location: Washington, DC


Ms. STABENOW. Mr. President, we have a very important vote coming up shortly on whether or not to proceed with the bill or to continue working, whether or not to stop our efforts to continue to try to improve this bill or to begin the clock to a final vote. Many colleagues have pointed out that this is the bill-this is the bill. The bottom line of all of this paperwork is that it does not take effect, in terms of prescription drug coverage for seniors, until 2006. So this is the bill we are asking for time to thoroughly go through, line by line, and to be able to fix what does not work for our seniors.

We are being told we have to rush this; this is the last time we are going to be able to do it; we don't have any more time to be able to put this together. Yet the bottom line of all this, for seniors' prescription drug help, if there is any in here-and there is a little-doesn't even start until 2006.

I am going to be voting against the effort to stop debate and move to a final vote because I believe we need to take the time to get it right. I believe there are critical issues we need to fix.

Let me first say a positive aspect in all of this is important efforts to help our rural providers, our doctors and hospitals, home health agencies, and nursing homes. On Saturday I put forward a bill that would actually pull out those positive provisions that are critical for our providers, to vote separately on that. I believe we would have, if not unanimous, overwhelming bipartisan support for those efforts that help our providers.

While I do not believe this bill, on balance, is good at all for our seniors, it is a bad deal for seniors, there are good provisions in it. I hope if this bill does not go forward, we can pull those provider pieces out and support them.

Why don't I support this bill as written? In this bill as written, 2.7 million retirees lose their coverage. One out of four folks who worked hard during their lives, maybe have taken a pay cut here or there to get good health coverage, would actually lose coverage as a result of the provisions, the way this bill is written for private employers.

Mr. President, 6.4 million low-income seniors, the folks we all talk about, the folks we are desperately concerned about, who really are sitting down today at the table and saying, Do I eat today or do I take my medicine, they will end up paying more because of the way this is changed between Medicaid and Medicare. That doesn't make any sense. It is a bad deal for too many of our low-income seniors who need help the most. It is a bad deal for 2.7 million folks who have private insurance and will lose it. My fear is they will not just lose the prescription drug coverage; they will lose their entire health care coverage.

To add insult to injury, this bill locks in the highest possible prices in the world. It keeps drug prices high, which is why the pharmaceutical industry is so strongly supporting it.

They changed their strategy a few years ago. They have been trying to stop prescription drug coverage because they didn't want Medicare to use its clout as a group purchaser to be able to get a good discount, as we do for the veterans, and lower prices. They fought it, but then they decided they couldn't fight it anymore because seniors are desperate and we do need to do something. We are long past doing something real for our seniors. So they changed the strategy. They said: Let's write a bill that gets a whole bunch more customers, 40 million more customers potentially, and let's make sure we lock in the highest prices so they can't compete; they can't lower prices; they can't go to Canada or other countries where there are safe, FDA-approved processes right now to be able to bring drugs back across the border.

That is a big deal for us in Michigan. It is 5 minutes across a bridge or 5 minutes through a tunnel to be able to get lower prices-in half or more. So they made sure we are not going to be able to do that and they made sure we are not going to be able to negotiate for lower prices.

What do we have in the end? We have a whole new group of customers for the pharmaceutical industry who will be forced to pay the highest possible prices.

This is not a good deal for our seniors. We can do better than this. People don't have to lose coverage. People don't have to pay more. People don't have to be locked into the highest possible prices in the world. We have time. This bill doesn't take effect until 2006 for our seniors. I urge us to take the time to get it right.

The PRESIDING OFFICER. The time of the Senator has expired.


Ms. STABENOW. Mr. President, first, I thank my friend and colleague from the State of Washington for her eloquence this evening in laying out where this is not a good deal for seniors. We wish it was a good deal for seniors. Both of us have been here since 2001, speaking in the Chamber frequently about the need to provide prescription drug coverage for seniors, real coverage, and about the need to lower prices for everybody.

In fact, I have been working on senior issues for a long time. Actually that was the very first opportunity I had to get involved in public service. I won't say when, but it was about 25 years ago. I came into county government, which is a part-time position in Michigan. But what brought me into the Ingham County Board of Commissioners was the issue of senior citizen health care. I have been involved in that issue ever since.

Nothing would please me more than to be able to stand on the floor this evening and say: We did it. We have put together a voluntary, comprehensive prescription drug benefit under Medicare for seniors and the disabled. Nothing would please me more. And nothing would please me more than to say: We did it. We have put in place the ability to lower prices for everyone.

As colleagues have said, this is not just about Medicare and just about our seniors and the disabled-although certainly they are very important people. They use the majority of the prescription drugs. But we know right now the explosion in prices of prescription drugs is driving the entire cost of the health care system.

When I talk to those who are in the auto industry, or when I talk to small businesses, when I talk to those who are in the furniture business in Michigan, or in retail sales or work in State government, I hear the same thing, which is at least half the cost increases in health care are a result of the explosion in prescription drug prices.

So this is an issue that affects everybody. As we look at this question under Medicare, this is also an issue that affects everyone, every taxpayer as well as every person who is paying for Medicare. So this is a big deal. It is important that we get this right. It is important that we be able, at the end of the day, to say we have strengthened one of the great American success stories called Medicare, and that we have put in place the competition and the accountability to bring prices down. This bill absolutely does not do that. It doesn't do either one of those things.

First of all, it starts from the premise that seniors want something other than traditional Medicare. When we look at what seniors have said when they have had a choice, here is what they said. Eighty-nine percent of those who have a choice right now between Medicare+Choice, which is an HMO, private insurance, or traditional Medicare, 89 percent said: We will take traditional Medicare. Eleven percent said: We will take the private insurance.

Seniors have already said what choice they want. When I hear folks talking about what they want in Medicare, they are not asking for more bureaucracy, or more insurance paperwork, or more insurance companies to choose from. They just want to update Medicare for prescription drugs, that is all-just update Medicare for prescription drugs. Eighty-nine percent of the Medicare beneficiaries have already told us what they want to do. They want traditional Medicare.

This bill basically sets in place-some of it is immediate with prescription drug coverage where you have to choose from private insurance plans if they are in your area, and some of it is down the road a bit in 2010 when the entire unraveling of Medicare begins. In some areas, people will have a very different system that will attempt to move them into private insurance.

That is not what folks have said to me. People say we should do that because it costs less. Medicare is in trouble financially down the road. We need to do something to lower costs.

When you look at this, Medicare costs about 2 percent to administer and private HMOs cost 15 percent. So that can't be the reason we are doing this. It costs more to go into private plans than it does with traditional Medicare.

For many of the reasons colleagues said on the floor, traditional Medicare has a very large insurance pool-those who are sick, those who are well, those who are older, those who are younger, all together-the bigger the pool, the bigger the risk pool, the lower the price.

It is not because it would cost less, because it doesn't cost less; it will cost us more. It will cost taxpayers more. It costs more for services under the private sector than it does under traditional Medicare.

Why are we doing this? I think we are doing this for one reason: Unfortunately, the driving reason behind this legislation is that the pharmaceutical lobby has decided, instead of continuing to fight Medicare coverage and the Medicare prescription drug benefit as they have done for many years-they decided they don't want to stop it anymore because it is too big an issue for people. It is a critical life-and-death issue in order to pay for your medicine. That is not to say people got up today and decided to eat or get their medicine. That is not rhetoric; it is real. So they changed their approach and thought they couldn't stop it anymore because it is too real for people: This is a real problem. Let us create a benefit that is done in a way that divides people up into private insurance plans and in a way that doesn't allow Medicare to use all of its leverage to be able to lower prices.

So behind all of this, there are I think two things. There are those who really do believe it ought to be done in the private sector, that we ought to go back to private insurance. But you couple that with an industry that wants to make sure that: No matter what, we can't lower their prices; let us make sure that no matter what, people have to pay the highest prices.

That is why there is no reimportation, which is really important in my State. The idea that you can have a local pharmacist in Michigan be able to do business with a pharmacist in Canada, be able to bring prescription drugs back into the local pharmacy in Michigan at half the price, many of them made in the United States, they are safe, they are FDA approved, bring them back, and create a way to lower prices-they don't want that. That is not in the bill. They do not want a strong provision to tighten patent loopholes so competitors can be able to get into the marketplace with generic drugs. That is not in the bill.

We have a weakened version of that. Amazingly, as colleagues have said, they were actually able to get language into the bill that says Medicare is prohibited from group purchasing on behalf of seniors and the disabled. It is amazing. That is just amazing. The private insurance companies can try to get the best price. Everybody else can try to get the best price. But Medicare on behalf of our seniors is prohibited from trying to get the best price.

That would only be in the bill for one reason; that is, because the industry has been successful in creating a whole new group of customers who will be forced to pay the highest possible price.

How do we know this? This is not just me talking. The Boston University School of Health has looked at this legislation and estimates there will be $139 billion in increased profits over the next 8 years for the world's most profitable industry. At $17 billion annually, this means about a 38 percent rise in drugmaker profits.

I am all for folks making a profit. I have a major pharmaceutical company in Michigan. They do wonderful research. I am very proud of them for doing this research. But we are talking about an industry that is already one of the most heavily subsidized by taxpayers, because they do not make shoes, or chairs, or cars, they make lifesaving medicine. We want them to make it. We want them to do research. So we help them pay for it. We give them protection. We have patent protection so that they are protected from competition. We give them the ability to write off their research and write off their advertising. They get a lot of support and help. Why? Because we want to be able to afford the product.

At the end of the day, when, by the way, they are spending 2½ times more on advertising and marketing and administration rather than research, which is a big concern of mine, but at end of the day we are seeing not prices going down so people can afford them but efforts to actually protect prices and allow them to go up.

We are looking at about a 38 percent rise in drugmaker profits. Certainly any business would welcome that. But that is on the backs of American citizens. This is on the backs of American taxpayers who are paying the bill-American seniors who just want to know that they can count on Medicare, get the medicine they need, pick their own doctor, live a healthy life, and visit grandkids and great grandkids. They trust us to look beyond the 650 lobbyists, or however many there are in the drug industry now. I know it is over six lobbyists for every one Member of the Senate. Imagine, more than six lobbyists for the drug companies for every Member of Congress. They are counting on the Senate to look beyond the swarm and to look at what they need. They are counting on us to look at what they are asking for.

I know at the end of the day it is our obligation and responsibility to make sure we put together something that actually helps people get their medicine at affordable prices, is responsive to the taxpayers of this country, and is something that protects one of the great American success stories called Medicare.

The No. 1 reason I am opposing this legislation, there is nothing in here to lower prices for anyone. Profits will continue to go up and they are locked in. This legislation sanctions that.

Second, we are putting into place a system that will unravel by privatizing Medicare, or will allow Medicare to wither on the vine as former Speaker Newt Gingrich said. It took a while. He said that in 1995 and here we are in 2003 with a bill that does that.

It does a couple of other things that make no sense to me. I would assume that the first rule would be: do no harm. Yet under this legislation, it is estimated that over and above what is happening right now in the marketplace, 2.7 million retirees will lose their coverage, people with private coverage. That is one in four. That means three out of four employers will wrap around and keep the coverage going, but one out of four, which is too high-we could make that zero if we wanted to, if we had legislation I cosponsored a year ago that made it-but right now one out of four in this bill are estimated to lose their private retiree coverage.

My guess is a lot of those folks gave up pay increases over the years to get good coverage, gave up other things so in their retirement they would have private coverage.

On top of keeping prices high and unraveling Medicare, it is estimated by a study group that 143,000 people in the State of Michigan would lose their private coverage. I don't know how in the world I can support that. And I will not.

The last thing this does, there are 6.4 million low-income seniors and disabled who will lose access to the drugs they need. Many of them will actually pay more. How in the world does it make any sense that we would have a prescription drug benefit that has been described as helping our low-income seniors the most, but actually costs people more out of pocket, people who are currently on Medicaid, who find themselves under Medicare with a different system, a different asset test, different copays, and would actually pay more.

We should be focusing on and helping the people who really are choosing every day whether or not to eat or get their medicine or pay the electric bill.

When we look at this whole picture, as much as I would love to say this is a great deal, this is a bad deal. My colleagues say this is a first step. There is an old saying: Beware of the first step. I think the first step is right off the cliff on this legislation for too many people.

In closing, there is one important piece in this bill that has strong if not unanimous bipartisan support that I wish we were passing separately this evening. That is the issue I have talked about a number of times: what is happening to our doctors, our hospitals, our home health agencies, nursing homes, and others who have been cut consistently in the reimbursements they receive, whether they be rural or urban providers.

Those who care for our seniors and the disabled have seen resources cut. That, in turn, is cutting access. We have known that cuts were coming now for the last 3 years, and instead of doing something about it sooner because our doctors and other providers desperately needed us to, it gets rolled into this legislation that is highly controversial. I regret that. I have offered separate legislation pulling out all of these provisions. I offered it on Saturday, and I asked unanimous consent we take it up immediately and pass it. It was objected to on the other side. I regret that, as well.

The reality is, in the middle of this bill I believe there are some very important providers being held hostage, folks I want to support, whom I have supported, and I will support in the future; folks for whom I have fought, and unfortunately because of the fact that this is in the middle of this bill to unravel Medicare and hurt them in the long run and increase cuts in the long run for all of them, I am not going to be able to support this bill. However, I do want the record to reflect that our doctors and hospitals and others who have been cut too much are cancer care providers. They are still cut too much in this legislation. I am extremely upset that is the case.

But we do have in this bill provisions for rural hospitals, urban hospitals, and others that are desperately needed. I am at least pleased there are provisions there recognizing the desperate needs our providers feel.

In conclusion, when we look at the broad bill before the Senate that unravels Medicare, keeps prices high, causes people to lose their health insurance in the private sector, and causes the most vulnerable seniors to pay more, this is a bad deal. I am hopeful, still, that those listening this evening will call their Members before the vote that I believe is coming tomorrow morning. Tell the Members to go back to the drawing board. We can do better than this for people. I am still very hopeful this will be stopped and we will get back to the drawing board and get it right.

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