Medicare

MEDICARE

Mr. GRASSLEY. Madam President, I didn't interrupt the Senator from Connecticut, so I hope my colleagues will let me give my remarks in rebuttal unhindered by any other obstacles.

It is about time that we pass a prescription drug bill for Medicare. It is about time that we strengthen and improve Medicare, as we have been telling the voters for three elections.

In the 2000 election, it was an issue. It was an issue on the floor of the Senate last summer. It didn't pass last summer because the other party in this body wanted an issue for the election coming up last fall. The leader of the other party took it away from his own chairman of the committee, so there could not be a bipartisan bill put together.

In the Senate, nothing gets done that is not done in a bipartisan way. Maybe a lot of people don't like that about the Senate, but it has been that way for 214 years, and our country has functioned well. This is the only body in our political system where minority interests are protected. We are going to have broad, bipartisan support for this bill, and we are going to pass it because when Republicans won the last election, we won it because there were a lot of things buried in this body by the leadership of the other party because they wanted issues for that election and because they thought they would increase their strength in this body and get more of what they wanted this year than last year.

But they miscalculated. The people of this country put the Republicans in charge of this body. But they didn't put the Republicans in charge of this body to do things just in a partisan way because we in the majority party know that nothing gets done here that doesn't have some bipartisanship with it.

As chairman of the committee of jurisdiction over Medicare, taxes, international trade, and a lot of other social programs, I have the privilege of having a good working relationship with the former chairman of this committee, now the ranking Democrat, Senator Baucus. We started out on Medicare prescription drugs, like we did on some other issues this year, to put together a bipartisan approach so that we could deliver on the promises of the last several elections-not just the last election, but the last several elections. Both political parties have been saying that we are going to strengthen and improve Medicare, and one of those strengthenings and improvements is going to be a universal and comprehensive and voluntary prescription drug program.

We are about to deliver on it, and people on the other side don't like it because they had an opportunity and they lost that opportunity because they wanted to do something in a partisan way. Previous speakers on the other side have raised this point about the AARP backing this plan. They are saying they are caving in to political pressure.

It seems as though, as far as the other side is concerned, the only time the AARP is political, in the eyes of the Democratic Party, is when AARP agrees with the Republican Party.

Senator Baucus and I have been working together, and we will bring to the Senate, after the House passes it tonight, a bipartisan, bicameral compromise out of conference, which will deliver on the promises of the last three elections. We are even going to deliver on the promise of the Democratic Party, where they were going to provide prescription drugs for seniors. The only thing I can think is that they regret it. They had an opportunity a year ago, when they were in the majority and when our President wanted to work with them, to do it, and they didn't take advantage of it.

I want to speak about this product that we have before us. It was just yesterday, after 4 months of conferencing, that the conferees agreed to a bipartisan breakthrough on a conference report that will make comprehensive prescription drug coverage a reality for our 40 million Medicare beneficiaries, both seniors and disabled. After 4 months of hard work, the conferees approved a sweeping package of new prescription drug benefits and other program improvements that makes good on our commitment to our seniors.

I am urging all my colleagues to support it. Since 1965, seniors have had health insurance without prescription drugs. By reaching agreement yesterday, the conferees came one step closer to changing that. The Senate can make history by improving this compromise report.

This important breakthrough came because of the tireless work of our committee members, both Democrats and Republicans, over the last 5 years. Senators Frist and Breaux led the way on prescription drugs before any of us were listening. Senators Snowe, Hatch, and Jeffords, along with Senator Breaux and this Senator, carried the torch as members of the Finance Committee, but also because we wanted to do things in a bipartisan way. We even called that a "tripartisan way" because Senator Jeffords lists himself not as a Republican or Democrat but as an Independent. That is an effort we have exceeded in the bill, but it was an effort that somewhat blazed the trail to where we are today, and I am glad to have been a part of it.

Finally, this breakthrough came because of the President's unyielding commitment to getting something done for seniors once and for all. Last December 10, I had an opportunity to meet with the President, as he knew I was going to be the new chairman of the Senate Finance Committee after the Republicans had won control of the Senate. We, in fact, had that meeting, anticipating all this time we had to work to get ready, a long time before Congress even convened. At that meeting, the President said two things that I remember. I did not take notes, but I remember very well that he was willing to commit political capital to this effort and that he was willing to put money in his budget for that effort.

The President delivered on both of those statements because his budget put $400 billion in over 10 years for this bill. That is exactly what we in the Senate wanted. We approved that last March. By June, the Senate Finance Committee had reported out a strong bipartisan bill by a vote of 15 to 6, building upon the agreement with the President and the agreement of the Senate for $400 billion for the budget.

The Senate, as you know, passed S. 1 on strong bipartisan grounds in June. The other body passed a similar bill, H.R. 1, that same night. I believe the committee report is measurably better than either S. 1 or the House bill, H.R. 1. It contains improvements, refinements, and changes that are better for seniors and better for the doctors and the hospitals that serve them.

We have come a very long way in getting to this point, and I am proud of where we have ended up. I will do everything I can to ensure successful passage of this conference report over the next few days.

Of course, the conference report can't and won't be all things to all people. Like any compromise, no one is left perfectly happy. That probably means that the conference committee came out just about at the right place. I urge all my colleagues to go beyond the perfect and to focus on the good that the conference agreement accomplishes.

The greatest good at the heart of this conference report is a comprehensive prescription drug benefit that will give immediate assistance starting next year and continuing as a permanent part of Medicare to every senior. Not only is it comprehensive, it is universal, and if nobody wants to participate in it, they don't have to. It is voluntary as well.

The conference report provides affordable comprehensive prescription drug coverage on a voluntary basis to every senior in America. The coverage is stable, it is predictable, and it is secure. Most importantly, the value of the coverage does not vary based on where you live and whether you have decided to join a private health plan. For Iowans and others in rural America who have been left behind by most Medicare private health plans, this is an important accomplishment that I insisted on way back as early as January of this year. I haven't budged on that commitment and that protection is in this conference agreement.

Overall, the conference agreement relies on the best of the private sector to deliver drug coverage, supported by the best of the public sector to secure consumer protection and important patient rights. This combination of public and private resources is what stabilizes the benefit and helps keep costs down.

Keeping costs down is essential not just for seniors but for the program as a whole. Throughout this bill, we have targeted our resources very carefully, giving additional help to the poorest of our seniors. Consistent with the policy of targeted policymaking, we have worked hard to keep existing sources of prescription drug coverage, such as employer-sponsored benefits, and to do it in a viable way.

This conference agreement goes great distances to keep employers in the game providing drug coverage, as they do now, to their retirees under those plans that were promised to people after retiring from their employment.

We all worried very much when we passed this bill in June that, as CBO scored our Senate bill, it might cause 37 percent of the corporations to drop their employees on the Government plan. The House bill had a 32-percent drop rate, according to the Congressional Budget Office. As a result of the conference activity and what we have done to shore up existing retiree plans, that percentage is now much less than 20 percent due to the substantial investment made by conferees to ensure that employers can continue offering the good coverage they have for a long period of time.

The conference report includes additional subsidies. It also includes regulatory flexibility that will do much more to help, rather than threaten, employer-sponsored coverage for those who currently receive it.

Still, we all must acknowledge that decisions about scaling back coverage or dropping it altogether are bound to be made regardless of whether we pass this conference report. But I am confident that the balanced policies before us are a very good deal for employers and their retirees.

I want to make it very clear to people listening who might be worrying about corporation retirees losing their health coverage because of something we are doing here, we are doing our darndest to supplement these plans and to give regulatory flexibility so these plans are not dropped. But Congress cannot pass a law that says corporation X, Y, or Z, some day, if they decide they want to dump them, might be dumped. That could be happening in some corporation in America today. This law is not even on the books. That happened in my State earlier this year and last year and the year before, not because Congress was talking but just because that was the policy of that corporation. It is something they felt they couldn't afford any longer, and they did it.

That could happen even after we pass this legislation, but where would we be if we didn't pass this legislation? The 35 percent of the seniors today who have no coverage whatsoever, and probably never have had it in retirement, will still not have drug coverage. Also, the corporations that dump their plans might not have anything either. By passing this legislation, even considering all the resources-about 20 percent of this legislation contains resources for these corporations to keep their plans-if they would drop them, at least these people have something on which to fall back.

I would think that is a better situation than the uncertainty of, Is my corporation going to dump me or are they not going to dump me?

If they are dumped, then they have zilch, unless they want to buy an expensive Medigap policy or something like that. So we are trying to have a safety net for all seniors, and we are trying to do it in a way that is very helpful. So I want to make that very clear. We cannot force corporations-never could and never will be able to-to say they have to provide health care coverage and prescription drug coverage for their retirees. But we do have a plan that is very good for people who do not have prescription drugs or people who might have prescription drugs today but tomorrow might not have it. This is a safety net and a darn good safety net.

Beyond just prescription drugs, the conference report is a milestone accomplishment for improving traditional Medicare, especially in rural America. The conference report includes the best rural improvement in the Medicare equity package that Congress has ever passed. The rural health care safety net is coming apart in rural areas. It is difficult to recruit doctors to rural areas because of low reimbursement. The conference report begins to mend that safety net.

As many in this Chamber know, hospitals, home health agencies, and ambulance companies in rural America lose money on every Medicare patient they see. Rural physicians are penalized by bureaucratic formulas that reduce payments below those of their urban counterparts for the same service. The conference report takes historic steps toward correcting geographic disparities that penalize rural health care providers. Providers in rural States such as Iowa practice some of the lowest cost, highest quality medicine in America. This is widely understood by researchers, academics, and citizens of those States, but not by Medicare.

Medicare instead rewards providers in high-cost, inefficient States with bigger payments that have the perverse effect of incentivizing overutilization of services and poor quality. This is very noted in my State.

The Des Moines Register has been very clear in informing the people of my State that Iowa is 50th in reimbursement in Medicare on a per beneficiary basis over a year, 50th of the 50 States, but yet under indices we are fifth or sixth in quality of care.

Over at the other end, there is Louisiana, No. 1 in reimbursement, about $7,000 per beneficiary per year compared to about $3,400 for Iowa, the lowest of the 50 States. More money to be spent on Medicare for seniors' medical care does not guarantee quality of care because Louisiana is listed 50th in quality of care. So we want to make sure that where one is getting high-quality delivery of health care, there is reimbursement that takes that into consideration. So the conference report begins to reverse that trend.

It also includes long overdue pilot programs that will test the concept of paying for performance and making bonus payments for high-quality health care. This benefits taxpayers and, most of all, patients.

Beyond prescription drugs and beyond rural health care, the conference report goes at great length to give better benefits and more choices-the right to choose is very basic in this bill-available to our seniors. It specifically authorizes preferred provider organizations-we call them PPOs-to participate in Medicare, something the current law does not fully allow. The idea is that these kinds of lightly managed care plans more closely resemble the kinds of plans that we in the Federal Government have and close to 50 percent of working Americans have. Baby boomers then, when they go into retirement, will be able to compare fee-for-service 1965 model Medicare with these new PPOs. I think they are going to find new PPOs closer to what they had in the workplace than traditional Medicare, but they have the right to choose. We think they ought to have that right, too, because traditional Medicare has not kept up with changes in the practice of medicine like the private health plans employees have in the workplace.

PPOs have the advantage of offering the same benefits of traditional Medicare, including prescription drugs, but they do that on an integrated, coordinated basis. So this creates new opportunities for chronic disease management and access to innovative new therapies. Unlike Medicare+Choice, we set up a regional system where plans will bid in a way that does not allow them to choose the most profitable cities and towns. They cannot do cherry-picking. Systems like this work well for Federal employees such as the postmaster in my hometown of New Hartford, IA. He has a choice of several plans. We want to give that same choice to his parents, who today have only Medicare and nothing else.

Are PPOs right for everyone? It is the right to choose that is important about this bill. Let the seniors decide. Our bill sets up a playing field for PPOs to compete for beneficiaries. We believe PPOs can be competitive and offer a stronger, more enhanced benefit than traditional Medicare. But let me be clear, no senior has to choose PPOs. My policy has been to let seniors keep what they have, if they like it, with no change. All seniors, regardless of whether they choose a PPO, can still get prescription drugs. They do not have to choose that, but they can choose that as an add-on to traditional Medicare if they want.

So I hope I have protected all of my colleagues, and maybe my colleagues do not need any protection, insisting on the voluntariness of this and the right to choose. I think it is pretty essential for people who are older, who do not want change in their life, not to have to make a change in their life.

I fear maybe, as the Senator from Iowa, that somebody is going to come up to me someday and say: Grassley, just leave my Medicare alone.

They do not follow Congress closely, but they read here and there and they get nervous: What Senator is taking away their Medicare? I can say to Mary Smith in Columbus Junction, IA: You do not have to worry about anything. If you are satisfied with the Medicare you have, you can keep it. If you want to join a prescription drug program to add to it, you can do that, but you do not have to worry about Medicare. If you like it the way it has been all your life, we are leaving it alone.

I think that sounds like protection for Senator Grassley, but I am concerned about the cynicism my seniors have about Government, maybe because they do not study it as much as we do or understand it as much as we do. I want to reduce that cynicism, but I want them to have confidence in their Medicare as well. I think this right to choose gives them that confidence.

The conference report also includes other important policies that I believe make a much stronger, better bill. First, we make wealthier people pay a slightly higher premium. Why should someone who makes $80,000 a year or more pay exactly the same price for coverage as someone who makes $30,000 a year? The conference report makes wealthy seniors pay slightly more, and this is a very important and rational step toward stabilizing Medicare's growth.

The conference report also injects new and transparent accountancy rules into Medicare, making the trustees show in a comprehensive way what all of Medicare's assets and liabilities truly are. There are also expedited procedures for committee consideration of legislation that addresses any future Medicare funding crisis without changing the Senate rules.

Finally, and in my view most importantly, the conference agreement authorizes health savings accounts. I have been a long-time supporter of medical savings accounts. Now they are going to be called health savings accounts. Such tax-favored accounts encourage responsible utilization of health care services. They offer low-cost insurance to farmers and other self-employed people. For too long, medical savings accounts have languished under regulatory inflexibility. The provisions in the conference report go to great length to make medical savings accounts a stronger, more accessible option for more Americans, and I think that is very appropriate because it adds to the right to choose.

We are in a unique moment in our history as far as health insurance legislation is concerned. We have a limited opportunity to deliver on our promises to get this done once and for all.

Let me remind everyone, there is $400 billion sitting in front of America's seniors. If we let partisan disagreement prevent us from snatching it up for them, shame on us because, what do you think the chances are next March of this Senate adopting a budget with $400 billion set aside for Medicare? I think the chances of that happening are not very good.

Let's not allow the perfect to be the enemy of the good. I urge my colleagues to continue in the bipartisan tradition of the Finance Committee and deliver a balanced bipartisan product that does right by our seniors.

I yield the floor. I suggest the absence of a quorum.