Medicare Prescription Drug, Improvement, and Modernization Act of 2003-Conference Report-Continued

MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003-CONFERENCE REPORT-CONTINUED

Mr. REED. Mr. President, opinion has already been registered with respect to this Medicare proposal before us today. I think one of the more interesting comments was from the Des Moines Register editorial board, describing this legislation as "a big, sloppy kiss to the pharmaceutical and insurance industries." That is essentially what this bill is. It is a huge payoff to pharmaceutical companies and to the insurance industry. It is not really about giving seniors what they deserve and what we have all labored for many years to provide them with; and that is, comprehensive drug coverage.

There is another fallacy that is operating, too, in our debate today. That fallacy is that this bill is the best we can do, so let's just move on. I think it is a fallacy because I checked this morning the discussion of the vote early, early this morning in the House of Representatives. Apparently, the last few votes that were arm-twisted into supporting this bill from conservatives in the House was based upon the logic that if this bill failed, the next bill, which would come promptly after this bill, would be, from their perspective, worse; but from the perspective of seniors, much better because it would not represent "a big, sloppy kiss to the pharmaceutical and insurance industries." It would represent a commitment to provide prescription drugs-real prescription drugs-and maintaining the Medicare system. And that is what seniors want.

So I believe we can make this bill better simply by holding our ground, by debating it extensively, by not rushing to judgment, by not surrendering to artificial deadlines of the Thanksgiving holiday or even the Christmas holiday.

This is the largest proposed change in the Medicare Program since its inception in 1965, and to rush through this in a few hours, not because of the substance of the bill, but because of the timetable for airplanes and trains to get home for the holidays, is wrong. We should stay here and do our job, just as thousands and thousands of young Americans are staying across the globe and doing their job to protect us.

I think there is another issue here, too; and that is the notion that this is the end of the privatization argument. On the contrary, this is the beginning of privatization. That is the quid pro quo for the support, particularly support of conservatives, of this bill in the House and here in the Senate. I can envision and anticipate that with each new reconciliation bill that is forced upon us, with a procedure that does not allow unlimited debate in the Senate, we will see again and again the slow erosion of the traditional Medicare Program, under the guise of cost savings, under the guise of competition, under
the guise of so many other claims and so many other excuses.

So we are at a position where we are looking at legislation that represents, again, a massive giveaway to pharmaceutical and insurance companies, that does not provide an adequate benefit for seniors, and that really does begin the privatization of the Medicare Program.

Since 1965, Medicare has provided dependable health care for our seniors. But we have all recognized in the last decade or more the rise of pharmaceuticals as a principal, and expensive, way to treat diseases. We have all recognized that Medicare must adjust to this change. We have urged and fought to get an adequate benefit for our seniors for drug coverage.

Now, in Rhode Island, with 14.5 percent of the population over 65, this is of central concern to me. And I have worked very hard, as so many others have, to try to get a good drug benefit program, but not at the expense-not at the expense-of Medicare.

Now what has happened is that the administration, their allies in Congress, the pharmaceutical industry, and the insurance industry have all gotten together and have attempted not just to provide a drug benefit that is adequate for seniors, but to provide a drug profit bonanza for the pharmaceutical companies and the insurance companies and to alter fundamentally the shape of traditional Medicare.

Now, in the wake of the Gingrich revolution in 1995, Newt Gingrich declared his intention of letting Medicare wither on the vine. His undisguised hostility to Medicare met a swift rebuff from Democrats but, more importantly, from the American people because they understand the critical need and the value of Medicare.

Today, this hostility to Medicare persists, but it has been camouflaged under the cloak of a prescription drug benefit. As a result, we are on the verge of a historic bait and switch. Under the guise of providing drug coverage, the Bush administration is beginning the unraveling of the Medicare Program. The bait is drugs; the effect is the slow unraveling of the Medicare Program.

This bill was cobbled together by the administration, by their allies in Congress, and by lobbyists for the drug and insurance industries to entice support based upon the notion of a drug benefit. But the goal, ultimately, and the plan, in effect, is to privatize Medicare.

There is a memorable scene in America cinema in the movie "Patton," of George C. Scott, who plays the illustrious general, watching the retreat of the German forces from the Battle of El Guettar.

He bellows at the top of his voice: Rommel, I read your book.

Of course, the obvious inference is people will declare their intentions years before and then carry them out. And that is exactly what is happening here. If you read the Gingrich book, if you read the conservative "book", this is about the privatization of Medicare. Now it might take a few years because tactically the lessons have been learned since 1995. You can't get up on the rooftops and announce: We are ending traditional Medicare. This is a program that allows, in my view, more choice than an HMO because traditional Medicare allows seniors to choose their doctor, to change their doctor. In fact, if you ask most seniors if they could, they would have that choice without any type of condition whatsoever.

That is what is happening here. The intention is clear. But the tactics have been adjusted since 1995, since they ran into popular opposition. Now it is a subtle change, a series of changes over time, reconciliation bill after reconciliation bill. That would be incredibly disastrous to the system and a disservice to our seniors.

The drug benefit is scheduled to begin in roughly 2006. Conveniently, it is after the 2004 election, and it also allows additional time to fiddle with the benefits before any of this becomes real in the lives of our seniors. One can anticipate that these benefits will be adjusted as our fiscal crisis becomes deeper and as we try desperately to constrain costs within not just this program but every other program. The benefits, as they exist today, are a monthly premium averaging about $35, a deductible of $250 or so before Medicare covers 75 percent of an individual's drug costs. But because of inadequate funding in this bill-the $400 billion was never enough-and because of the lavish contribution to HMOs in a $12 billion slush fund, the lavish contribution to health savings accounts of $6 billion, we already have defects within the drug protection for our seniors because if a senior's drug costs reach $2,200, Medicare will pay nothing until that senior has already paid out of pocket $3,600. There is a gap, the proverbial donut hole. Must this donut hole exist? One could argue it has to. But certainly, if we had extra resources, if we had the $18 billion that this bill lavishes upon HMOs and insurance companies, why don't we simply close the gap? Because we are not interested in providing the best benefit under available resources to seniors. There is another priority: Let's go ahead and begin the slow privatization of Medicare.

There are those who say: Well, something is better than nothing; we will take anything now.

Again, we can do better. We could do better in this Congress because the fear last night that motivated those last few holdout votes was that the Senate would do better, that we would bring another bill to the Senate and to the House, and that bill would not have such a big gap; that bill would not be such a big sloppy kiss to the pharmaceutical and insurance industries; it would be something seniors could use, something seniors could use much more effectively than what we are presenting them today.

They should recognize, too, that "something is better than nothing" doesn't apply because the price of that something is the withering away of Medicare. We know what this is about. We know that if unchecked, that is what you will insist upon and demand over each coming year.

Medicare works because it covers every senior. It spreads the risk. An essential, fundamental point of any insurance plan is spreading the risk. It works also because Medicare is willing to subsidize the cost of providing health care to seniors. The reason the private insurance industry did not cover seniors before 1965 is simple: It was too expensive. They couldn't make any money on it.

It took the Government to say: We will use public resources to subsidize the health care costs of these seniors, and we will try to do it in an efficient way by first cutting out the overhead of a private health insurer, cutting out the profits of a private health insurer, making this a nationally based program having the broadest possible coverage for all seniors. That is the essence of Medicare.

This bill is turning that on its head. This bill is fragmenting the pool of seniors who will be covered. It is tilting the playing field against traditional Medicare by providing incentives for insurance companies. It is giving money not directly to subsidize the health care of seniors but to subsidize the bottom line of insurance companies. That is the only reason they will play in the senior market, because they are being paid to do so, paid in the form of their profits, not essentially in the form of services to seniors.

I suggest that if the market for senior health care was there to be exploited by private companies, it would have been exploited in 1965, in 1955, in 1945, but it wasn't. And we all know because this body contains people who at least have reached middle age. We all can remember in every home there was an elderly relative-a grandmother, a grandfather, an aunt or uncle-who had to live with you because they could not afford the price of health care; they could not afford the price of a nursing home. That all changed, not because private health insurance companies stepped up to the plate. It is because Medicare and Medicaid stepped up to the plate. And we are about to change that fundamentally. There are those who will say this is just a modest demonstration program. No, this is the first step. The path has been charted. The direction was declared years before. You just have to read the book.

This bill fragments senior health care coverage. It does so along the lines of age and health. By giving incentives to HMOs, it will encourage them to enroll the youngest and healthiest seniors.

Here is how you make money as a health insurance company. First you get a large subsidy from the Federal Government.
Then you carefully select your risks so that they don't incur costs. That increases your profits. That is what any of my colleagues would do if they were directing an HMO, that is what I would do, because their business is to provide profits to their shareholders. That is what is going to happen. It is not because suddenly they have thought of a much more efficient way to deliver services to seniors.

Frankly, the way they derive efficiencies is to ration health care. We all know it because we have all heard the complaints from seniors and from doctors: They won't pay me for what I am doing. It takes me 6 or 7 months to get a bill through, and they give me 10 percent of what I claim as my true cost.

That is what the doctors tell me. They don't want to work with private insurers. They like Medicare. They like the fact that it is predictable. It pays them on time or certainly in a predictable range of time. That is not what HMOs do. They are
in it for the money. That is the essence of what they do.

We think we can change the morbidity and the mortality rates of seniors and the costs associated with senior health care? We can't.

So what do we do? We give the HMO's subsidies, and then they will use the subsidies and the leverage of this new law to seek out the healthiest risk, and they will maximize their profits.

That is clear because Wall Street certainly has already voted on this bill. Pharmaceutical stocks are soaring; health insurance HMOs are doing very well. That is what is happening.

What happens also is that we take these healthy seniors out of the pool of traditional Medicare. Then what happens to the cost of traditional Medicare? It goes up. We no longer have the 65-year-old or 68-year-old marathon runners and triathletes. We have 85- and 90-year-old frail elderly who need increased care. No insurance company is going to underwrite those people if they can avoid it, and they can avoid it very easily. So the cost of traditional Medicare will go up.

Then, of course, a year or two from now the people who say this is not about privatization, this is about choice, will come in and say: Look how expensive Medicare is. The private sector is doing so much better. And we will see, I think, the inevitable erosion of traditional Medicare. The irony is that we already know traditional Medicare delivers high quality at essentially a lower cost than an HMO.

A report by the trustees of Medicare this year estimated that reimbursements for HMO enrollees would exceed the average cost of traditional Medicare. That makes sense. Medicare is not advertising on every billboard in Rhode Island like the Plan 65 is. Medicare is not putting out glossy 25-page brochures describing its great programs, or advertising on the radio for profit. Medicare doesn't have to run a multimillion-dollar profit. Medicare is not paying a CEO of an HMO $26 million, or $9 million a year. It is obvious why they are running more costs.

So, again, we know this already. We have Medicare+Choice. Every year, they say "we need greater reimbursement." Why are we then trying to tilt resources to induce private companies to come and do something that seniors will say general traditional Medicare does just as well? It is not about efficiency or a new innovative way of paying for health care, it is about ideology and catering to special interests-that big sloppy kiss again to the pharmaceutical industry and the insurance industry.

The Bush administration proposal, this proposal, divides seniors along the lines of income. For the first time, we are using means testing to determine how much someone must pay to participate in Medicare. Now, one could argue that if this was a last-ditch effort to save traditional Medicare and you had to make sufficient financial calls, you could consider means testing. But this is not about saving Medicare, this is about privatizing Medicare. This is about not saving the system but essentially destroying the system. It creates this fragmentation along the lines of income. When you start seeing the costs accumulate-when seniors start seeing those costs accumulate, a very wealthy senior might say, I don't want to participate anymore, and they will begin walking away from the system. That is not a lot of people, but once you have a public program, and people say, I don't want to participate any longer, and you see the income lines start dividing people it will undercut the support and the strength of the system.

I listened intently to my colleague from Texas say it is so unfair to have the minimum wage workers pay as much as the very wealthy who pay in. I am someone who is pretty sympathetic to minimum-wage workers. Unlike many of my colleagues on the other side, I think we can increase the minimum wage, and I think we can do that right now. They have avoided a vote on that for months and months.

Let me tell you, you have to recognize that, through our tax system, those upper income Americans are paying much more into the Medicare system during the course of their lifetime. But that is beside the point. I think that is a footnote. The fundamental point is that this program has worked so well because it is a social insurance program, not a welfare program. It is a program which every senior comes to, regardless of their health, age-other than meeting the 65-year-old threshold-or their income. It is really a common ground. That has a value above and beyond simple accounting, or who is paying what and who is doing what. So this is another way the program is divided. Again, I believe this is the wrong approach.

Now, this whole proposal eliminates the stability, dependability, and reliability of the Medicare Program. It is unfortunate that this process was essentially hijacked behind closed doors. All of the conferees didn't even meet. Two of our colleagues on the Democratic side, Senators Baucus and Breaux, were admitted to the conference, but there were others who were deliberately excluded, which is against, if not the rules, the spirit of the Senate. I think that is wrong. This is not a product of the free interchange between all interested parties, this is simply a backroom deal. If they weren't willing to deal, they could not get in the back room.

This legislation will affect all seniors. That is another reason we need more time on this floor to debate this bill, explain the bill, to have the opinions registered by seniors who are not dazzled at first by an attempt or a first glimpse of a drug benefit but by the underlying reality of the bill.

There is much to be criticized in the bill, but I believe there are three general areas. First, when I was considering a drug benefit for seniors being attached to Medicare, I believed it had to meet three tests: affordability, accessibility to all beneficiaries, and uniform coverage. This bill fails those tests miserably.

In terms of affordability, seniors will pay, over the next 10 years, $1.8 trillion for drugs-a staggering total. We began this debate with $400 billion over 10 years for Federal support-much too inadequate, I believe. We were stuck with that. But as I pointed out in previous remarks, we didn't use all the money in this bill to creatively and innovatively help seniors buy drugs. It went to help the insurance companies and pharmaceutical companies.

We are beginning with a benefit scheme where a senior will have, first, a $250 deductible, roughly $35 a month premium; and if they do that, and they pay the deductible and the premiums, 75 percent of their cost of drugs up to $2,250 will be absorbed by the Federal Government.

But these deductibles and premiums will increase each year. Our seniors should know that. In fact, by 2013, CBO estimates that beneficiaries will be paying a $445 deductible and almost $60 a month premium, and a quarter of their drug costs will be deferred up to $4,000. So we are looking not at a fixed benefit for seniors over the next 10 years, we are looking at increased premiums and deductibles.

I mentioned the donut hole before. Even paying these fees, this doesn't provide for continuous coverage for our seniors for the drugs. They will spend up to $2,250, and then they will get nothing. I would like to be around in at least-perhaps if this bill passes-I hope it doesn't-a few months or years because it doesn't really begin until 2006-when our offices get flooded with calls saying: I just got a bill for my premium this month, but I was informed that I will get no help with drug costs, and I have to choose-not between eating or buying drugs, but I have to choose between paying my premium or buying my drugs. That will happen to seniors when they get in this donut hole, this gap. That will be their choice.

I hope we are preparing good answers by saying: Oh, that is just the way it works. Keep paying your premium because if you don't, you will never be able to qualify for help $2,000 or $3,000 down the road-after you have spent that much more on drugs. It is a baffling system of insurance.

It is interesting because I have heard so many people on the floor talk about and say: We are just going to give the seniors what we have in the Federal Employees Health Benefits Plan. I can tell you, we don't have a donut hole in the Federal Employees Health Benefits Plan. We don't reach a point at which our drug coverage stops, while we spend some more money. No, we have what most insurance plans have; we have continuous coverage. Our deductibles and premiums might be different, but we have continuous coverage. So this is nothing close to the Federal Employees Health Benefits Plan.

It might be an interesting experiment-maybe our plan should be changed. Maybe we should have this gap. Maybe we should experience the fact of paying premiums and not getting anything for them.

Again, this is one of the problems we have with the bill. When this bill passed the Senate, there was some good work-some. One of the areas where we had good work was in trying to cushion the blow for poor people who could benefit from this drug bill. Specifically, the Senate bill had a section also for people at 160 percent of poverty. That has been pulled back to 150 percent of poverty-the threshold for low-income assistance. It is estimated that because of that change, over a million beneficiaries with annual incomes between $13,000 and $14,000, approximately, will lose out on their income assistance. Now, an annual income of $14,000 might be a lot of money in some States, but in the Northeast it is very difficult to get by on that.

When you are paying $800 a month for an apartment-and, indeed, we are doing so poorly at providing affordable housing for our seniors that more and more seniors are on the private market-if you are paying $800 to $1,000 a month for an apartment, that is about $10,000, $12,000 a year. And you don't qualify for this benefit? This is protection for low income seniors?

Millions more will be further disqualified by the imposition of an asset test. I must say, I voted against the Senate version of this bill for many other reasons. But, there were some commendable elements in that proposal. One was the elimination of the asset test. The asset test is back. That means if your income is below 135 percent of poverty and you have assets over $6,000, you will be disqualified for low-income assistance.

Let me put it in the vernacular. Assets over $6,000: If you have a Ford Escort, it is probably worth maybe $6,000. Certainly, if you own a Crown Victoria, it is $6,000. So let's tell the seniors right now, if they can afford to have a car or a little bit of savings, they are disqualified from the income protections for low-income seniors because of this asset test. That I think is wrong.

There is another aspect to this bill that has been much discussed and debated, and that is what are we going to do with dual eligibles, those individuals who qualify for Medicaid but also, because of age or disability, are in the Medicare system. There is a lot of discussion about the success of this bill dealing with dual eligibles, making sure they are protected. Frankly, I think the protections are ephemeral.

First, the States are not actually relieved of their fiduciary responsibility for these dual eligibles. The Governors all want the Medicare system to go in and say: You are going to take care of these people; they are Medicare individuals now with a drug benefit. Effectively what we have done is something called a clawback, I believe, which requires the States to keep paying forever.

More than that, I am told, is that before, the Medicaid systems in the State could negotiate better drug prices, and now I believe they are subject to whatever the traffic will bear in terms of prices established by this bill. And there is no cost containment on the drug companies. There are cost containments on what we can spend for seniors, but not on what the drug companies can charge. That is another real major problem with this bill.

When I go up to Rhode Island and talk about cost containment, what seniors say to me is: Hallelujah, you are finally going to be able to constrain these accelerating prices from drug companies. You are finally going to be able to do what we all want you to do-use the market creatively, not price controls but market force to get these prices down. No, because this bill essentially prevents Medicare from negotiating for drug prices effectively against the drug industry. That is why, again, it is a "big sloppy kiss" to the insurance industry and to the drug industry because they have their way. There will be no market power. There will be no Medicare with approximately 41 million beneficiaries saying: Give us your best price, drug companies. It is fragmented by region, by private entities. It is fragmented deliberately so there is no market power.

For those people who preach on and on about the power of the market, that we have to get away from all this command-and-control economic policy, they walked away from using the market creatively to deal with the No. 1 issue that has driven this whole debate: the ever-increasing cost of prescription drugs.

It is not an accident because the people who wrote this plan and the biggest beneficiaries of this plan are those in the drug industry.

There is another aspect of this whole issue of the States and Medicaid. We have prohibited the States from using Medicaid money to help address these increased drug costs. We have essentially said: You can't use Medicaid money for that. Again, this is not only something that is unfortunate, but it puts tremendous strain on the States.

It has been estimated that my State, over the next 10 years or so, could be paying up to $500 million to the Federal Government in this clawback. I hope my Governor is aware of that. I am going to make him aware of that because the states had always expected that the federal government would pay these costs if a Medicare drug benefit was created.

There is another issue. Because of the ambiguity of some of the language, it is unclear what happens to individuals in the TriCare Program and individuals who are in the Veterans Administration program. What happens to their drug coverage? Are they displaced? That remains to be seen.

Also, in terms of the approach to Medicare, as I said several times over, it is just not adding a pharmaceutical benefit. That is what seniors want many of us to do; create a Part D in Medicare, a pharmaceutical benefits with rules, with fair costs, and with protections. The overall effect to the Medicare Program is we are raising Part B from $100 to $110 in 2005, and then indexing it to expenditures in future years. We know that is going to keep going up, and some of the fastest growing costs in the country are health care expenditures.

By contrast, the Social Security benefits are tied to increase in the Consumer Price Index. Here is what is going to happen to seniors: The Social Security check goes up, a very modest figure because of the CPI indexing, and the part B goes up like a rocket because it is tied exclusively to the health care expenditures. In a way, it could lead to the point where Part B is more and more expensive and less and less attractive to seniors.

Again, with the means test, with deductibles, all those things, we could find initially wealthy seniors leaving the system, and that erosion could spread.

There is another aspect to this, too, and that is access to home health services. Again, there was a proposal initially to put on a copay, a co-fee, for home health care. That was defeated. I see my colleague from Maine, Senator Collins, in the Chamber. She led the fight to see that was protected and did it admirably and graciously, as always.

What I am reading in this bill is that we are reducing reimbursement rates for home health care providers by an estimated $6.5 billion over the next 10 years. We already know the home health care industry took a significant cut in the Balanced Budget Act. In fact, many were pushed to the brink of bankruptcy, some beyond and failed and closed their doors.

Now they have to adjust to a $6.5 billion reimbursement reduction over the next 10 years. Once again, why didn't we take some of this money going to the pharmaceutical industry and the insurance industry and keep the home health care industry strong and vibrant? We all know it is a much more efficient way to treat seniors, more so than having them traipse to the emergency room, then having them go home without home health care, and then come back a week later.

Frankly, in my view, that is what made traditional Medicare a very attractive program. We have ransacked many of the aspects of traditional Medicare to fund this experiment, this demonstration in privatization.

Another general topic of concern is the accessibility issues. There is a complicated scheme now that says we are not going to let Medicare run a drug program unless, of course, there are no private vendors. When it left the Senate, the fallback would begin to operate-i.e., a Federal program-a Medicare Program for drug provisions would operate when two drug-only plans were not available in the market. That has been changed. Now, it is a drug-only or another private plan. So essentially we are doing all we can to keep Medicare from running this drug plan, not because of efficiency, not because of anything except special interest politics and an erroneous ideological commitment to use the private market anytime, even when the market and the market for senior health care is not, without major subsidies, conducive to private plans.

If it was, why did we have to create Medicare in 1965? Because no insurance company will voluntarily enroll sick, elderly people unless they are highly subsidized. We did it not because we had a profit motive but because the American people decided in 1965 that this society would be more decent, stronger, and the fabric of this country would be better if we devoted public resources to help seniors with their health care needs.

The other aspect of this, which time and again is repeated, is why do we need a $12 billion slush fund to do what we think private health insurance companies will do anyway? Because we do not believe they will do it anyway. We know they will not. We have to give them lots of money to participate. Why can we not use that money to strengthen traditional Medicare? Why can we not use that money to decrease the gap in coverage? Why can we not use that money to provide further reimbursement to home health care, which we know is an efficient, valuable program? This does not make sense to me on simple grounds of economic efficiency, but it does have a certain logic if one is rewarding their friends and appealing to ideological concerns.

There is another important aspect, too, and that is the fact that we have seniors, retirees, already with health care and drug benefits through their employers. Two point seven million of these retirees are in danger of losing those benefits.

There have been attempts in this legislation that comes before us to bring that gap down. In fact, it was estimated that there were about 4 million retirees who would lose their benefits under previous versions of this legislation. That has been reduced, but 2.7 million Americans-at least 9,000 Rhode Islanders-are likely to lose better private drug benefits that they have today because of this proposal.

I can guarantee my colleagues, we will hear from every one of those 2.7 million retirees-the at least 9,000 in Rhode Island-because that is not what they thought Congress was doing when it was debating a drug benefit.

As I mentioned before, not only does this approach fragment the healthy and young seniors from the older and sicker seniors based upon the cherry-picking of the insurance industry-which they will do-it also fragments them in terms of income because of the nature of this means testing. It might not happen right away, but anyone who is under any illusion that we are setting in concrete this proposal right now has not been here long enough.

I can imagine, my colleagues can imagine, with every reconciliation bill-and for those who are not devotees of the parliamentary musings every year when we come and have a special procedure where there is no filibuster, it is just 50 or 51 votes-we find all sorts of interesting provisions in that bill. We all stand up and say, oh, that is terrible, but I have to vote for it because it is the budget.

What we will find is this means testing will become broader because the principle has been established. What we will find is these demonstration programs for privatization will become larger.

Let me talk about this demonstration program. It allows for demonstration projects to be established in six metropolitan statistical areas where there is a 25-percent private plan participation. Presently, there are 41 MSAs around the country that meet this test, including most of my State of Rhode Island, as well as border communities in Massachusetts. It is estimated that almost 7 million seniors and disabled beneficiaries, one in six Medicare beneficiaries, could find themselves subject to this privatization experiment. That is a heck of a demonstration project, 7 million people.

As I mentioned before, what are we demonstrating? We have had Medicare+Choice for a while. We know the problems. We know that seniors will go into it. In fact, in my home State of Rhode Island we have about 30 percent who have gone into these managed care plans. They went in originally because of the offer of pharmaceuticals and drugs. Every year we get complaints when they change the plan, when they raise the copays, when they do all of these things. We know how it is going to work and we also know that we have to pay more and more each year to subsidize these private plans to participate. As a result, we are going to see tremendous erosion. Seven million seniors could be affected.

What does this mean in terms of their coverage as they look at the competing plans? According to the office of the actuaries at CMS, beneficiaries could pay up to 5 and 25 percent more to remain in traditional Medicare in areas where these demonstration projects are going on. However, the proposal at least caps that increase at 5 percent. Why would premiums go up? Let me go back to two basic points. We are subsidizing the private plan and then they are out carefully selecting to minimize their risks. They do not have to do it by offering inducements. They can put signs up at the health club, go to these 5K races and hand out brochures. They will not go into neighborhoods with high rates of disease. They will not go into senior centers in low-income areas where people have the kind of health issues associated with having earned a low income all of their lives. They will not do that. They will go to the country clubs, to the affluent suburbs, and sign everybody up. Then we will subsidize it.

So when one is a senior trying to make a choice between traditional Medicare and this new plan, well, if they have to pay even 5 percent more, that might make them choose the new plan-not because they have better quality, not because they maintain their doctor, not because of any substantive reason, but simply because it is a little cheaper, in the beginning. Then a year later, when they discover it is a little more expensive, and 2 years later as Medicare continues to decline, the options start evaporating.

So, again, this proposal is not only dangerous but unnecessary. We could have simply done what many Americans think we are doing, create a Medicare drug benefit.

So I believe we can do much better. We should do much better. We have the time to do much better. Anyone who is saying that we cannot spend 2 weeks or 2 months continuing to discuss this bill, I think is putting an undue premium on enjoying the holiday over the health care of seniors and the structure of our health care for seniors that has been in place for more than 35 years.

I hope that rather than beginning the path of privatization of Medicare, providing an inadequate benefit not only because we started out with insufficient funds, but then diverting those funds to take care of the insurance industry and the pharmaceutical industry, that we would go back to principles and try to create, under the $400 billion cap, a program that would work for seniors. I hope we can do that, and I hope we can continue this debate.

I yield the floor.