Statements on Introduced Bills and Joint Resolutions

Floor Speech

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By Mr. DURBIN (for himself, Mr. Brown of Ohio, and Mr. Akaka):

S. 560. 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, this Congress, members from both sides of the aisle recognize the need to reduce the national deficit. Today, I am introducing the Medicare Prescription Drugs Savings and Choice Act of 2011, a bill that would save taxpayer dollars by giving Medicare beneficiaries the choice to participate in a Medicare Part D prescription drug plan run by Medicare, not private insurance companies.

In 2003, Congress enacted the Medicare Modernization Act, which added a long overdue prescription drug benefit to Medicare. Senior citizens and people with disabilities were relieved to finally have coverage for this important aspect of their healthcare needs.

The way the Part D program was structured under the original law, it included a coverage gap known as the ``donut hole.'' Once an initial coverage limit was reached, beneficiaries had to absorb 100 percent of their drug costs until catastrophic coverage kicked in. That meant that approximately 3.4 million seniors nationwide with the heaviest reliance on prescription drugs faced the prospect of paying up to $4,000 out of pocket before they qualified for further assistance from Medicare.

When Congress passed the Affordable Care Act last year, we made significant improvements to the Medicare Part D program. Seniors who hit the ``donut hole'' in 2010 received a one-time $250 check. This helped 109,421 seniors in Illinois pay for their prescriptions during the coverage gap. In addition, this year Medicare beneficiaries will receive a 50 percent discount on brand name drugs in the donut hole, and the donut hole will be fully closed by 2020. This means that Illinois seniors will save $1.2 billion in out of pocket costs over the next decade.

The bill I am introducing today would make yet another improvement to the Medicare prescription drug benefit. The Part D program is 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.

In many regions, dozens of plan choices are available and each 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. Anyone who has visited a senior center or spoken with an elderly relative knows that the complexity of the drug benefit has created confusion.

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

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

The Veterans Administration has authority to directly negotiate with drug companies, and as a result it has cut drug prices by as much as 50 percent. A study published in 2008 found that if Medicare negotiated drug prices on behalf of seniors, $21.5 billion could be saved annually.

The Medicare Prescription Drug Savings and Choice Act of 2011 would provide a simple and stable way to obtain drug coverage, since the plan Medicare-operated prescription drug plan would be available nationwide every year, and would charge everyone the same premium.

It would also save money because the Secretary of Health and Human Services would have the tools to design a formulary and negotiate prices with drug companies. The best medical evidence would determine which drugs are covered in the formulary, and it 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 non-formulary drugs or non-preferred 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.

A Medicare administered drug plan would create a ``win-win'' situation that could save billions of taxpayer dollars and provide a high-quality affordable option to seniors.

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