Statements on Introduced Bills and Joint Resolutions

Floor Speech

STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS -- (Senate - October 23, 2007)

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By Mr. DURBIN (for himself, Mr. Akaka, Ms. Stabenow, Mrs. Boxer, and Mr. Obama):

S. 2219: A bill to amend title XVIII of the Social Security Act to deliver a meaningful benefit and lower prescription drug prices under the Medicare Program; to the Committee on Finance.

Mr. DURBIN. Mr. President, nearly 4 years have passed since Congress enacted the Medicare Modernization Act. Adding a prescription drug benefit to Medicare was long overdue, and many senior citizens and people with disabilities are relieved to finally have drug coverage.

But the drug benefit was not structured like the rest of Medicare. For all other Medicare benefits, seniors can choose whether to receive benefits directly through Medicare or through a private insurance plan. The overwhelming majority choose the Medicare-run option for their hospital and physician coverage.

No such choice is available for prescription drugs. Medicare beneficiaries must enroll in a private insurance plan to obtain drug coverage.

A report released today by the Medicare Rights Center, with the support of Consumers Union, identifies the problems this decision to rely exclusively on private drug plans has created.

Seniors are having trouble identifying which of the dozens of private drug plans works best for them. Anyone who has visited a senior center or spoken with an elderly relative knows that the complexity of the drug benefit has created much confusion.

Each drug plan has its own premium, cost-sharing requirements, list of covered drugs, and pharmacy network. After you have identified the right drug plan, you have to go through the whole process again at the end of the year because your plan may have changed the drugs it covers or added new restrictions on how to access covered drugs.

Medicare beneficiaries often cannot obtain the drugs they need because they are trapped in an appeals process that the Medicare Rights Center calls ``hopelessly dysfunctional.'' Drug plans often do not tell beneficiaries that they can appeal a drug plan's decision to deny coverage of a drug, even though they are required to do so. Beneficiaries who do appeal soon find that it is a long and difficult process.

The complexity of the Medicare drug benefit also has made beneficiaries more vulnerable to aggressive and deceptive marketing practices. Some insurers try to steer seniors into more profitable Medicare Advantage plans. Some seniors have been signed up for Medicare Advantage plans without their knowledge, and, unfortunately, there have also been unscrupulous insurance agents who have misrepresented what benefits would be covered.

Adding to the frustration with the program so far is accumulating evidence that private drug plans have not been effective negotiators, which means seniors end up paying more than they should.

Drug prices are higher in private Medicare drug plans than drug prices available through the Veterans Administration, Medicaid, and other countries like Canada.

A report by the House Oversight and Government Reform Committee estimated that taxpayers and Medicare beneficiaries would have saved almost $15 billion in 2007 if administrative expenses in the drug program were as low as the traditional government-run Medicare program and if drug prices were the same as Medicaid levels.

It should come as no surprise then that the average beneficiary who stays in their current Medicare drug plan will see their monthly premiums increase 21 percent in 2008.

Today, I am introducing the Medicare Prescription Drug Savings and Choice Act. The bill would create a Medicare-operated drug plan that would compete with private drug plans and would require the Health and Human Services Secretary to negotiate with drug companies to lower drug prices.

This is the kind of drug plan that Medicare beneficiaries are looking for. According to a survey by the Kaiser Family Foundation, 2/3 of seniors want the option of getting drug coverage directly from Medicare, and over 80 percent favor allowing the government to negotiate with drug companies for lower prices.

The Health and Human Services Secretary would have the tools to negotiate with drug companies, including the use of drug formulary. The best medical evidence would determine which drugs are covered in the formulary, and the formulary would be used to promote safety, appropriate use of drugs, and value.

The bill would establish an appeals process that is efficient, imposes minimal administrative burdens, and ensures timely procurement of nonformulary drugs or nonpreferred drugs when medically necessary.

The Secretary would also develop a system for paying pharmacies that
would include the prompt payment of claims.

Seniors want the ability to choose a Medicare-administered drug plan. Let us give them this option, just as they have this choice with every other benefit covered by Medicare. Many seniors will find direct Medicare coverage to be a simpler, more dependable, and less costly option than private drug plans.

Mr. President, I ask unanimous consent that the text of the bill be printed in the RECORD.

There being no objection, the text of the bill was ordered to be placed in the RECORD, as follows:

S. 2219

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