The Economy

THE ECONOMY -- (House of Representatives - May 05, 2004)

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Mr. ALLEN. Mr. Speaker, several people are saying how much seniors are going to have to pay for these drugs. The trouble is, one part of the problem is, it is their tax money that is being used to promote the program. We have just seen the Federal Government spend tens of millions of dollars to promote the underlying prescription drug benefit that will not take effect until January of 2006. Now there is an $18 million taxpayer-funded campaign hitting the airwaves to promote these new Medicare cards.

So the public has to pay for the TV advertising, to persuade them of something that is not true, that is, that these cards
will actually help them.

There was an article in the Portland paper today quoting one woman, 70-year-old Jean Houston of Waterville, Maine, who said she has already tried calling the Federal Government's toll-free number to enroll. She has not gotten through yet. "I tried to sign up," she said. "I called five times yesterday and three times today." How long will it take Jean Houston just to get through?

Now, CMS says, well, they have got a Web site. They can just go to the Web site. Most seniors do not have computers that are linked to the Internet. That is just a fact. And the idea that they are going to sit down and try to choose among 50 different cards with all sorts of different drugs when the pharmaceutical companies can change the drugs that are on the cards any given week, week after week after week, this is just absolutely nonsense. But there is an explanation. My staff tells me that CMS has now admitted that if we get seniors to work through this absolute maze, this absolute nightmare of 50 different prescription drug cards, it will help prepare them.

It will get seniors used to working with private plans, private insurance plans. Instead of the Medicare plan, which has the same benefit and the same additional premium for everyone in the country no matter where they live, we are going to have lots and lots of private insurance plans. The systems that are failing the small business community today are going to be inflicted on seniors in Medicare, and it is not right.

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Mr. ALLEN. Mr. Speaker, I would just like to follow up by what the gentleman is saying because this may seem to many people in this country to be a very odd result. Why on earth would the Republicans in Congress and the President put pass this kind of complicated plan? Well, remember what they said when they passed it. They said that in the long run, this would help save money, this would be cost efficient. We would have competition between plans and that would drive down costs.

Not exactly. Right now, right now, the private plans are being paid 107 percent of the cost to Medicare. That clunky old government-run fee-for-service Medicare program that the Republicans wanted it to get rid of. The private plans are being paid 100 percent more than it cost Medicare to deal with the average Medicare beneficiary. We will pay those private insurance plans $46 billion more than it costs the government-run fee-for-service Medicare plan. In other words, we are paying private insurance companies more than it costs to deliver Medicare to Medicare beneficiaries today and for what reason? Why on earth? Well, the insurance industry knows it is money in their pocket. Not millions of dollars, not hundreds of millions of dollars, but billions of dollars. The pharmaceutical industry knows as well.

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Mr. ALLEN. Mr. Speaker, I thank the gentleman for yielding to me.

I want to follow along with what the gentleman from Ohio (Mr. Strickland) has been talking about because just this Monday, the Congressional Research Service issued an important report, and in that report they concluded a couple of things. First of all, they were looking at this issue that was raised by Richard Foster, the Medicare actuary who has testified that he was threatened by his boss, Tom Scully, the head of CMS, that if Foster went to Congress and told them the truth about his projections for what the Medicare bill would cost, which was $150 billion more than what administration was saying, if he went to Congress and told them that, he would be fired.

Let us look at this report. This report was just made public on Monday. One point here it says "Congress's right to receive truthful information from Federal agencies to assist in its legislative functions is clear and unassailable."

They go back to say that according to the report, attorneys at CRS said these gag orders have been expressly prohibited
by Federal law since 1912.

Let me read you one of applicable laws. It is at 5 U.S.C. Section 7211. "The right of employees individually or
collectively to petition Congress or a Member of Congress or to furnish information to either House of Congress or to a committee or Member thereof may not be interfered with or denied."

But the truth is that the head of CMS, appointed by this President, refused to allow his employee, the Medicare actuary, to tell Congress the truth. So on the night of that vote, Republicans and Democrats believed that the only applicable projection was that this law would cost $400 billion over 10 years, when Medicare program officials themselves knew it would be $550 billion.

We have talked about this before, all this money going to the insurance industry, $46 billion more than it cost the government-run program. No wonder it is not cost-efficient. No wonder it breaks the bank. No wonder that it delivers a very small benefit, given the amount of money being spent on it.

This report makes it clear: The law was violated when the Congress was not told what the cost of this bill would be, what the projections of the Medicare actuary would be, and that in itself makes it clear, it never would have passed this Chamber if we had been told the truth.