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Public Statements

Medicare Solvency

Location: Washington, DC


Ms. STABENOW. Mr. President, I rise today to express tremendous concern about the latest news regarding the Medicare trust fund and the solvency of the trust fund. We are now hearing that Medicare, in fact, will become insolvent 7 years sooner than we had been told last year.

During the time between last year and this year, there has been a Medicare bill passed by the Senate. I believe there is a direct correlation between what was passed, which I have deep concerns about, and the new number we are hearing about Medicare being jeopardized and becoming insolvent 7 years sooner.

We know that in the bill that was passed last year, there were payments for the first time to private plans so they could compete with traditional Medicare. We know that, according to the Congressional Budget Office, it in fact has cost 13.2 percent more for the private sector through Medi care+Choice to provide the very same services as traditional Medicare. Rather than saying we should go, then, with the most cost-effective way to provide health care services for seniors and use traditional Medicare, the response, unfortunately, from the Congress and the President was to subsidize private insurance companies and HMOs so they could compete more favorably.

Originally, it was $14 billion taken away from providing prescription drug coverage for seniors, helping to pay for their medicine, taking those dollars away from other preventive services that could be paid for, other direct services that could be given to our seniors, and it was put into providing subsidies for the private sector.

Now we see in the new numbers how all of this has changed with the revelation of the tremendous increase in the cost of the Medicare bill which we were told after it passed. We are now told the first estimate of $14 billion being diverted is now really $46 billion being diverted-$46 billion not going to pay for our seniors receiving help with their medicine, to afford their medicine through Medicare, but being diverted to essentially privatize or help private plans be able to compete because it costs more to provide Medicare coverage and prescription drug coverage under private plans. We see greater costs there.

Then right at the time we need to be doing everything possible to leverage and lower our costs, we know this Medicare prescription drug bill actually says in the middle of the bill that Medicare is not allowed to group purchase, to get bulk discounts, which is astounding. Every time I say that to a group of people at home in Michigan, they look at me in bewilderment: What in the world were you thinking that you would not try to get the best possible price through a bulk discount? Yet we know that one of the reasons there is increased costs in this bill is because they are not doing bulk purchasing.

Why are they not doing bulk purchasing? Because the pharmaceutical industry does not want that to be done. They do not want us to get lower prices. They want us to pay the highest possible prices. So, unfortunately, this bill says that, which is another reason why I opposed the passage of the Medicare bill.

Over and over we are seeing situations unravel that cause me great concern, not only about the new dollar amount, the new substance in this bill, but also about the process that brought us to the passage of the Medicare bill. I will speak now to some of what we have been hearing and reading in recent days and weeks.

The Government's top expert on Medicare costs was warned he would be fired if he told key lawmakers about a series of Bush administration cost estimates that could have torpedoed congressional passage of the White House-backed Medicare prescription drug plan. This was written on March 12 of this year, just last week, in the Miami Herald. We know there were new estimates, new actual costs that were identified, and we were not told about them before the passage of this bill.

We know that between November 20 and 24 of last year, administration officials repeatedly stated without qualification that the prescription drug bill "will not cost more than $400 billion over 10 years." In making these representations, administration officials relied on CBO estimates without citing the conflicting estimates from their own analysts. This comes from a special report Health and Human Services Secretary Tommy Thompson gave at the time, as well as other news reports.
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We then found out after the new year on January 29-not November, now we move up to January 29-the administration announced the Medicare drug bill would cost at least $534 billion over 10 years-$139 billion more, just as we find the new subsidies for private plans, insurance companies, and HMOs have gone up, and certainly there is no cost containment in this bill.

On January 30, the President indicated he learned of the new estimates only 2 weeks earlier, but yet we find on February 12 Secretary Thompson testified to the House Ways and Means Committee that they were given the final higher drug cost on Christmas Eve of 2003, which contradicts the President's earlier statements.

Then on top of having conflicting information about the cost and when the administration knew about the cost, we also hear from a colleague of mine in Michigan, Representative Nick Smith, who said last fall unknown GOP colleagues had tried to bribe him into voting for the contentious prescription drug bill on November 22 by promising campaign help to his son who is running to replace his retiring father. This was reported in the Washington Post on March 15 of this year.

We now know there is an ethics investigation going on in the House of Representatives regarding this process. We know when this bill first came up in the House, they did not have the votes for it and kept the board open an unprecedented 3 hours plus to change votes, to get the votes for this Medicare bill.

Republican colleagues have said that if they had known the true cost at that time, they would not have voted for it. The cost was hidden. We did not find out what the true costs are, and then we see tremendous pressure on colleagues to vote for this bill, and now the Ethics Committee is looking into what happened in at least one circumstance.

Then we move to another area of great concern to me, and that is the advertising of this particular legislation, this new Medicare bill. According to the New York Times on March 16:

The administration then attempted to rally support and take political credit for the prescription drug plan with Government-produced TV ads masquerading as news reports. Actors were hired by the Department of Health and Human Services to pose as television journalists purveying facts, upbeat "news" segments about the expanded Medicare coverage.

I also have concerns because in that particular taxpayer-funded advertising, we have found, as a result of a GAO report and a request for investigation that we asked to have done on March 10, the GAO concluded that the Bush administration's Medicare advertisements contain notable omissions and other weaknesses. While they indicate they are not unlawful, they have notable omissions and other weaknesses.

One of my concerns about all of this is that we are seeing a lack of truthfulness regarding the cost of this bill. Many of us had great concerns about this bill in the beginning. We had colleagues being told one thing and then finding out another, saying if they had known, they would not have supported the bill; high pressure tactics going on and an ethics investigation now related to what was done in the House; and then we see taxpayers' dollars being used to put forward less than accurate information.

The PRESIDENT pro tempore. The Senator's time has expired.

Ms. STABENOW. I ask for an additional 1 minute.

The PRESIDENT pro tempore. The Chair has no authority to allocate additional time. It has already been allocated.

Ms. STABENOW. Without objection, I ask for an additional 1 minute.

The PRESIDENT pro tempore. The Chair is compelled to object. The time has been allocated.

Ms. STABENOW. I will simply indicate then I have deep concerns about this whole process, and now we find it affects the bottom line.

The PRESIDENT pro tempore. The Senator's time has expired.

Ms. STABENOW. I urge colleagues to relook at this Medicare bill and what is in the best interest of seniors.

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