Health Insurance Reform

HEALTH INSURANCE REFORM

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Mr. DURBIN. Will the Senator yield for a question?

Mr. NELSON of Florida. I am happy to yield to the distinguished assistant minority leader.

Mr. DURBIN. I understand we are only about 5 days away from the deadline for people to sign up for Medicare prescription Part D. I know the Senator has joined me and others in suggesting this program could have been done differently, a lot fairer, a lot simpler, could have more competition so that seniors would have had even lower drug prices. Sadly, major parts of it were written by the pharmaceutical industry and by the insurance industry.

I know the Senator from Florida has spoken to many seniors, as I have, and knows that as they have tried to understand the program and sign up for it, some of them have been overwhelmed. In Illinois, there are over 45 different programs from which to choose. I talked to pharmacists, who are a good source of information, who tell me the seniors come in, throw up their hands, and say: What are we supposed to do?

I ask the Senator from Florida, when you reflect on the fact that there are some 35.8 million Medicare beneficiaries who have drug coverage, according to the administration, isn't it true that 70 percent of those people--more than 26 million--already had prescription drug coverage before this program was underway? And of the 16 million who previously did not have coverage, about 10 million or so have signed up. So we still have about 6 million of the 16 we were trying to sign up for drug coverage--sounds to me like a substantial percentage, 6 million--who have not signed up at this point, about 40 percent. They are facing a penalty.

Do I understand the Senator from Florida has joined with others, including myself, in legislation extending the deadline for signing up, also saying to the seniors: If you made a mistake in choosing a program, we will give you a makeover, a do over, so that you can change the program within 1 year without penalty? I ask the Senator to explain.

Mr. NELSON of Florida. The distinguished Senator from Illinois understands correctly. If the deadline were extended until the end of the year, the administration's own figures are that an additional 1 million-plus senior citizens would sign up of that group of 6 or 7 million. If that is a million seniors who would not suffer the economic hardship of an additional 6 or 7 percent penalty or the economic hardship of not being able to have the right drug they need because they signed up with a mistaken decision of a wrong formulary, then is that not worth it for the sake of the senior citizens to grant a compassionate extension?

Mr. DURBIN. I ask the Senator from Florida, does he believe, as I do, that if we would have allowed the Medicare Program to bargain with the drug companies to get, by bulk discount, the lowest prices for seniors, just the way the Veterans Administration does, that the end result would have been at least one kind of standard program, Medicare Program, with lower prices which other private companies could have competed with, if they chose? Wouldn't that have offered the lowest price to the seniors and one simple standard program to turn to if they had any doubts about the right choice?

Mr. NELSON of Florida. The Senator is correct. As a matter of fact, it is something the Federal Government has been doing for over two decades in the Veterans Administration. The Veterans Administration buys prescription drugs in bulk. As a result, the cost to veterans is $7 per month for their prescription drugs. Using the law of economics in the private free marketplace, buying drugs in bulk, you can negotiate the price down. But when this body passed the prescription drug bill 3 years ago, Medicare, the Federal Government, was prohibited from purchasing in bulk and negotiating the price down.

Mr. DURBIN. How much time remains, Mr. President?

The PRESIDING OFFICER. Less than 1 minute.

Mr. DURBIN. The administration has argued the reason they didn't let Medicare bargain down in bulk discounts is because they wanted the market to work its will. Am I correct in remembering that they also appropriated hundreds of billions of dollars to subsidize the insurance companies that were going to offer this? Is that kind of massive Federal subsidy consistent with free market economics?

Mr. NELSON of Florida. The Senator's point is not only correct, but it is so pointed that anyone who hears it should suddenly say: Ouch.

Mr. DURBIN. I thank the Senator.

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