Prescription Drug and Medicare Improvement Act of 2003 - Continued

PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT ACT OF 2003—CONTINUED

AMENDMENT NO. 969

    Mr. GRASSLEY. Mr. President, I yield myself such time as I might consume.

    I know the Senator from Connecticut has well-intentioned motivations behind his amendment. The reason why I oppose the amendment is not because of any ill intent. But we have very carefully crafted this product before us after the Federal Employees Health Benefits Plan and the open season and the practice there. As far as I know, we do not run into Federal employees complaining because they cannot change more often than once a year. So I am going to ask my colleagues to vote against this amendment.

    It has some costs. I will speak about that. The open enrollment period in S. 1, as I said, is modeled after the annual open enrollment period of the Federal Employees Health Benefits Plan. I believe this program has been in place for more than 40 years, so we have a lot of experience with it. Consequently, it is a good pattern for us to craft the legislation before us for senior citizens in retirement for their health benefits.

    Each year seniors would be able to examine the choice of plans and select the plan that is best suited to their needs. The amendment before us proposes to allow seniors to change plans more than once during a continuous open enrollment period that would last for 2 years. While this may seem a good idea on the surface, it is an invitation, I believe, to more expensive health care for our seniors. I think it is going to lead to chaos and plan instability.

    It is very important, at least in the opening years, as we get these new programs underway that there be some predictability in order to encourage more plans to compete. The more plans competing, the better benefits we ought to get for our seniors at a lower price.

    It seems to me that providing a long, continuous open enrollment period allows any and all seniors to wait until they are sick before enrolling in a more comprehensive plan. You can understand that we need to have a situation where people are seen buying insurance and doing it in a way in which they manage their own risk as opposed to doing it in the case of only an emergency. This is where you get the insurance aspect that is so important in what we are trying to accomplish.

    So if you do that, as the Senator from Connecticut suggests, it is going to add costs to the program because it permits healthy enrollees to stay in the cheaper basic plan until an illness drives them to a generous plan. The generous plan then would become the plan just for sick enrollees.

    I have a statement here that the CBO says this would have a cost of $8 billion over the years 2004 to 2008, and $23 billion for the 10-year period 2004 to 2013.

    I am going to yield back the remainder of my time.

    The PRESIDING OFFICER. All time has expired.

    Mr. DODD. I ask unanimous consent for an additional 30 seconds.

    The PRESIDING OFFICER. Is there objection?

    Without objection, it is so ordered.

    Mr. DODD. Mr. President, this is one time. Unlike Federal employees, who are 30 or 35 years of age, this plan is all new. What we are saying is, for the very first 2 years—that is all, just the first 2 years—give seniors the flexibility so they do not have to sign up for a plan immediately. You get a couple years within that timeframe to make your choice, then you go into the 1-year cycle as all the rest of us do. But for older Americans, it is very confusing—very confusing—for them to have to make that choice at the get-go, right at the very beginning. So that 2-year window, to have some flexibility to make a choice that best serves your interest, I think is a reasonable request to make for our older Americans. That is the end of it.

    Mr. GRASSLEY. Mr. President, I ask unanimous consent for an equal 30 seconds.

    The PRESIDING OFFICER. Without objection, it is so ordered.

    Mr. GRASSLEY. Mr. President, I have some sympathy for what the Senator from Connecticut says because so many times I have said to my constituents, this is voluntary. You are going to have your choice to go into another plan or change plans. I emphasize the ability to change plans. In addition, we have to have some stability even in the early years. Most importantly, when we are developing a new prescription drug benefit, the most vast improvement in Medicare in 35 years, I think it demands more stability than when you get down the road a ways.

    I move to table the amendment and ask for the yeas and nays.

AMENDMENT NO. 982

    Mr. GRASSLEY. What the Senator from New Jersey wants to do I wish we could do. I personally was somewhat astounded when we asked experts at the Congressional Budget Office, experts at the Office of Management and Budget, experts in the Department of Health and Human Services, how much time it would take to get this new prescription drug program underway. We were advised to start it in the year 2006.

    In an ideal world, all seniors would have access to our comprehensive prescription drug benefit next year. But our plan, I am sorry to say, cannot go into effect until 2006. Therefore, we need to do something to help our seniors right now. Part of S. 1 does that. They have been doing it because seniors, as I am sure the Senator from New Jersey is trying to respond to, have been waiting a very long time for Congress to act and pass a prescription drug benefit, in the end, helping them with the tremendous costs they are paying for prescription drugs.

    This obviously is not satisfying to the Senator from New Jersey who would like to get this plan underway much sooner. Because of the waiting period until the year 2006 to get the very comprehensive program underway, we included in our plan a temporary prescription drug discount card. This is a voluntary program that all seniors can partake of next year. It is available for an annual fee costing no more than $25. Since our low-income seniors need extra help, this fee would be waived. It provides for a 10-percent to 25-percent discount on all costs of prescription drugs. There are some seniors for whom even a 10-percent to 25-percent discount is still a hardship to purchase prescription drugs. So we have added to this for really low-income seniors to receive a $600 annual help in purchasing prescription drugs during this interim period of time, 2004 and 2005. They will be required to pay a minimal copayment of 10 percent when the spending of the $600 subsidy is in place. Spouses who receive the low-income benefit are also allowed to pool share their deposits.

    When the comprehensive drug program begins January 1, 2006, the discount card program automatically ends. However, low-income seniors will be able to use their allotment of $600 until June 2006.

    Almost 10 million Medicare beneficiaries with significant prescription drug needs will realize savings from this endorsement program. The Center for Medicare Services projects that the Medicare beneficiaries will save between $1.2 billion and $1.6 billion in the program the very first year.

    As I said, I feel, not for reasons I like to give to my fellow Senators, that we cannot expect this comprehensive new prescription drug program for seniors, which happens to be the first major improvement in strengthening of Medicare since 1965, to go into effect. Maybe we can push and push and push, but this first major expansion of Medicare in 38 years ought to be carefully done and done right. Consequently, that is why we have deferred to the judgment of the Congressional Budget Office, Office of Management and Budget, as well as the Secretary of HHS. We have tried to compensate for the long period of phasing with the discount card and the $600 subsidy.

    I wish I could do more. I wish I could vote for the Senator's amendment but I cannot. I ask my colleagues to vote against it.

    I yield the floor.

AMENDMENT NO. 982

    Mr. GRASSLEY. Madam President, I sympathize with those who feel a need to get this program going sooner than we have it in this legislation. But the fact is, CMS has told us it is physically impossible to get this benefit up and running in the year 2004. Now, knowing that, we have provided a prescription drug discount card, starting on January 1, 2004, in order to get immediate relief from the high cost of prescriptions for our seniors.

    The amendment would spend close to $24 billion in fiscal year 2004—the amendment that is before us—and that is money that is not in the budget. We deal with the needs of our seniors in a fair way with this bill, the discount card, and the $600 help for them for each of the next 2 years. So I urge my colleagues to take all this into consideration and oppose the amendment.

    Madam President, I ask for the yeas and nays.

AMENDMENT NO. 998

    Mr. GRASSLEY. I am glad to speak about the man from Connecticut and his amendment but not to support it.
    First of all, we need to remember, with or without this subject before the Senate, these plans could be dropped without any hesitation. We can have the prescription drug plan before the Senate, and there could be some reason some companies would drop that. But right now, remember, our passage of this legislation is very much to fill a gap. We are worried about people who do not have any coverage whatever.

    As I have said before, we are all very concerned about the future of retirees' benefits and making sure retirees are treated fairly. Under the beneficial before the Senate, retirees get the same protection from high prescription drugs and the costs as any other beneficiary. That is a generous subsidy, far greater than they currently get, which would be zero.

    The fact is, typical retiree plans provide much more generous coverage, and the beneficiaries spend much less out of pocket for their prescriptions.

    There has been a great deal of interest in the assumption by the Congressional Budget Office that corporations are going to drop their coverage of prescription drugs for about 37 percent of the retirees in retiree health plans over the next 10 years. What we cannot forget is employers, as I indicated, are already dropping or, maybe more, scaling back retiree health benefits not because of our legislation but because retiree health benefits are rising because of very high health care costs. They have already been dropping plans or cutting them back for at least a decade, a point made by my colleague, Senator Dodd.

    We have worked hard to address this problem in the underlying legislation. One of the most significant future liabilities faced by retiree plans is the cost of prescription drugs. We have given employers serious and generous subsidies. The Dodd amendment proposes to boost subsidies for employers beyond the 64 percent we have given them already. This change would send millions more in taxpayers dollars to these corporations during the next decade. We had to put priorities first.

    We have $400 billion. We have looked at States and the problems of dual eligibles. We looked at corporate retiree plans and what might happen and what can we do to keep those that are going out of business or dumping theirs on a government plan. We have worked with a lot of different problems. We have had to do the best we can to squeeze within that $400 billion. We have tried to help the States to some extent on dual eligibles. We are trying to help corporations with incentives not to dump their retirees on this plan. I can go down a long list we have tried to squeeze in and prioritize.

    The overriding goal was to help those who had no drug plans whatever. That was very much a high priority. We have maybe 30 percent or a little more on private plans. We have people on Medicare with Medigap policies. We have people who are duly eligible subject to Medicaid. But we have 30 percent or more with zilch. We go beyond just helping those who do not have any plan. But that has been our priority. We tried to do it in a way that people who have better—and maybe most corporate retiree plans do have better incentives than what we can provide—and they can continue to have better. But we cannot control entirely what corporations are going to do. Particularly, you cannot do that on the amount of money we have here.

    As I indicated, this is a very expensive amendment that we cannot squeeze into the $400 billion.

    I urge my colleagues to defeat the amendment. I yield the floor.

AMENDMENT NO. 970

    Mr. GRASSLEY. First, let me explain to the distinguished Presiding Officer why we refer to "the man from Connecticut." When I was going to yield him some time, I didn't think of the word "Senator." I said I will give 1 minute to the man from Connecticut, and I apologize.

    First of all, I wish I had an exact number for this amendment. It has some costs, but I do not have an official score from the Congressional Budget Office so I cannot say that this costs X number of billions of dollars at this point. But it does have some cost.

    I am going to try to convince the Senator from Connecticut that we have done a lot in this legislation for people who are low income. Maybe it doesn't go as high up the economic ladder as he would like to have us go. But my point is we have done an awful lot.

    We worked very hard to minimize the gap in coverage with resources provided in the budget resolution which would be roughly $400 billion. The bill also provides generous coverage to lower income beneficiaries, those who have income below about $15,000, and couples with incomes below about $20,000. They, in fact, have no gap in coverage. That is 44 percent of Medicare beneficiaries who are completely unaffected by the benefit limit.

    In the writing of this bill, a conscious decision was made to devote excess dollars to filling in the gap in coverage for all seniors. Under the underlying bill, the average senior at this income level will still save more than $1,600 annually off the drug spending after paying an affordable monthly premium of $35 per month. This is a savings of about 53 percent off annual drug costs for the average senior who would enroll in the drug benefit.

    Let me remind everybody, this drug benefit is optional. People do not have to join it. If anybody is saying I don't want to pay $35 per month to get this sort of coverage, then that person does not have to pay $35 per month for coverage because this is a voluntary program. So the people who enroll in this program would save that $1,600, even beyond the $35-per-month premium.

    While I appreciate what the Senator from Connecticut is trying to do, it cannot possibly fit within the $400 billion that we have. We had to draw a limit someplace. We drew the limit at 160 percent of poverty. So I cannot support his amendment. I am sorry to say that to the Senator from Connecticut.