Medicare

CONGRESSIONAL RECORD
SENATE
Oct. 7, 2004

MEDICARE

Mr. GRASSLEY. Mr. President, just over 10 months ago, we passed a bipartisan bill called the Medicare Modernization Act dealing more with the prescription drug issue than anything else. But regardless of what you want to call it, it is the most sweeping improvement in Medicare since its creation. The Medicare Modernization Act delivered on a promise, a promise to provide beneficiaries a much needed prescription drug benefit and to revitalize Medicare so beneficiaries can receive quality care and benefits into the future with no sunset.

The Medicare bill passed with the support of a bipartisan coalition and more than 300 organizations ranging from the AARP to the U.S. Chamber of Commerce. Advocacy groups that did not necessarily support the bill then went on to form an organization called the Access to Benefits Coalition. They worked after passage of the MMA to ensure that low-income beneficiaries enroll in the Medicare drug card and get the real assistance to which every senior is entitled.

Still, on the floor of the Senate, we hear partisan attacks against this Medicare bill, continuing yet 10 months since it was signed into law. This is much to the consternation of organizations such as the Access to Benefits Coalition, which is saying that partisanship ought to be set aside and we ought to concentrate on getting people into the benefits that are in the program, even if you don't necessarily agree with the legislation.

Week after week, month after month, we have heard attack after attack against this Medicare bill. This is despite the fact that study after study shows the drug card program, for example-and that is only a small part of this most comprehensive improvement in Medicare in its 38-year history-is delivering real savings to beneficiaries.

As I listen to these attacks, I am reminded that it is always easier to tear down than to build. But if you tear something down, it seems to me those tearing it down ought to have something to replace it. So what was their plan? I haven't heard about a plan for the future, so I have to look back. What were they suggesting at that time when they had an alternative plan? And this was when the Democratic Party controlled the Senate. They did have a plan to offer, but the Democratic leader bypassed the Finance Committee, where we developed bipartisanship, to bring their proposal to the floor because they didn't want a bipartisan program. They wanted their own program. They knew they couldn't get their own program. They wanted an issue for the 2002 election rather than a product.

This alternative was drafted by Senator Graham and Senator Kennedy. Their bill was S. 2625. It had 30 Democratic cosponsors, including the Democratic leader. They offered two proposals as amendments on the Senate floor. Fifty Democrats voted in favor of the first proposal. Forty-five Democrats supported the second, which, I might add, was worse than the first. The Democratic Leader as well as Senator Kennedy and Senator Kerry supported both of these Democratic proposals.

In stark contrast with the bill that the President signed last December, the Democratic proposal, Graham-Kennedy, had a drug benefit that was not permanent. Our legislation is permanent. That is right. Their proposal would have ended at about the time baby boomers were beginning to retire. What a promise: Prescription drugs, and in 2010 you have nothing.

Chart No. 1 has the language of one section of their legislation. I read:

No obligations shall be incurred, no amounts shall be appropriated, and no amounts expended, for expenses incurred for providing coverage of covered outpatient drugs after December 31, 2010.

You can't be clearer than that. Seniors and individuals with disabilities deserve better than the false hopes of a drug benefit that expires after 6 years. But that is exactly what the first Graham-Kennedy amendment did. It simply rode off into the sunset after 2010, just at the very time that 77 million baby boomers start to retire. The fact that the Graham-Kennedy proposal offered a drug benefit that ended 6 years after it started ought to be unbelievable. You would never think that Senators would think of doing something like that-false promises, a costly program for a few years, and then it ends. But they sunset the benefit to hide the true cost of their proposal. At the time the Congressional Budget Office said it would cost over $100 billion each year to extend the Graham-Kennedy drug benefit past the sunset, $100 billion a year, and they had no plan to pay for this enormous cost.

To make their drug benefit permanent, Congress would have had to cut all other Government programs by more than 10 percent or increase taxes on all working Americans by an amount equal to 2 percent or greater. That is the same as a tax increase of around $1,500.

Besides vanishing in 2010, under the first Graham-Kennedy amendment, the Government could limit beneficiaries to just a single one-size-fits-all plan. The Secretary of Health and Human Services could have simply decided that you could get your coverage through that one plan-period, no choice.

Even more amazing, the first Graham-Kennedy amendment proposed a drug benefit that could only cover up to two brand name drugs in any therapeutic category. What does that mean? It means if your doctor prescribed a different brand name drug and it is not on the preferred list, then you don't get the plan to pay for it.

I will give you some examples. Let's take high cholesterol. There are more than eight well-known brand drugs to lower cholesterol. The single Government plan under Graham-Kennedy could pick Lescol. Say your doctor prescribes Mevacor. Well, you would get no coverage at all. This scenario could have been repeated for arthritis, high blood pressure, any other chronic condition that many beneficiaries have. Does that sound like a plan that is incredibly fair? No. Well, that is the plan, and it is far more restrictive than what the private plans offer today. Certainly the new Medicare law has no such requirement.

The first Graham-Kennedy amendment also set co-payment amounts in law-$10 for generics, $40 for brand drugs. To offer a lower copayment, the plan again had to ask for the Secretary's approval, a bureaucrat in the seniors' medicine cabinets for sure, not something that you are going to see under the bill that the President signed last December.

In addition, just like thousands of drugs could have been shut out, Graham-Kennedy could have shut out thousands of pharmacies because it told the Government to set up a preferred pharmacy network under that one Government plan, and the Secretary had to establish the pharmacy access standards. In contrast, the bill the President signed set strict rules about pharmacy access to make sure that plans include beneficiaries' neighborhood pharmacies in their networks.

So under their plan, there was one choice, with one formulary and one pharmacy network that may or may not cover the drugs beneficiaries need or allow them to use a pharmacy they want. Take it or leave it.

Under Graham-Kennedy, that outcome was the strong possibility facing beneficiaries who have waited long enough for a prescription drug benefit. The MMA established a good program that the President signed last December.

When I think about the Graham-Kennedy prescription for drug coverage, I cannot help but think of those little warning labels that you sometimes find on the side of your prescription bottle. In this case, it should have said this: Warning. This Graham-Kennedy plan may not help you at all because if you take a non-preferred drug, it won't be covered. You will only be guaranteed "reasonable" access to a pharmacy, and the Government will determine what is reasonable. Worst of all, if you need drug coverage after December 31, 2010, there won't be any plan for you or for anybody else.

Again, 50 Democrats, including Senator Kerry, supported this.

When that amendment failed, Senator Graham and Senator Kennedy came up with an alternative which, hard to believe, was worse. Most seniors would not have even gotten a basic prescription drug benefit under the second Graham-Kennedy plan because it wasn't a universal benefit. And we have a universal benefit signed by the President of the United States.

So that's right, under the Democratic plan, the proposal did not offer a basic drug benefit to 70 percent of the seniors who had incomes above 200 percent of the Federal poverty level at that time.

Seniors across the country would have been left behind. Let me show you. In my State of Iowa-and I am saying this to Iowans if the plan passed by the President doesn't fit just right, it is voluntary, so if they don't want to do it, they don't have to. But under the proposal offered the year before by the Democrats, 64 percent of the people in my State would not have had any basic program whatsoever; 67 percent left behind in Arizona; 72 percent left behind in Washington; and 70 percent left behind in Colorado.

The second Graham-Kennedy amendment violated a fundamental tenet of Medicare-and that is a tenet of the legislation we passed-that it be universal. They called for disqualifying any beneficiary who earned $1-just $1-more than 200 percent of the Federal poverty level. So $1 was the difference between eligibility and ineligibility for this basic coverage.

Under the bill that the President signed, all Medicare beneficiaries are eligible to participate on a voluntary basis in the Medicare prescription drug benefit.

There is also a big gap in coverage. We also have been hearing from opponents of the bipartisan bill that passed the Congress and was signed by the President, about the gap in coverage. They refer to it as the donut hole.

Again, looking at their second attempt-we have it here. After looking at this plan that was put forth, my only conclusion is that this concern about a gap is newly found because most beneficiaries would not have received any basic coverage under their plan. To qualify for catastrophic coverage, a beneficiary would have to pay $3,300 out of pocket.

Talk about a hole. The majority of beneficiaries would not even get a donut.

The Congressional Budget Office estimated that 66 percent of seniors would not meet their catastrophic coverage threshold in 2005.

For a beneficiary who would meet the threshold, and based on average spending, it would take about 10 ½ months-sometime around Thanksgiving Day-to get any help under the catastrophic benefit.

You know that what most beneficiaries got under the second Graham-Kennedy plan is a 5-percent discount off of their drug costs until they spent $3,300. And they proposed setting the 5 percent discount in law.

I might add that 5 percent is much less than discounts available under the Medicare-Approved Drug Discount Card Program.

Study after study is showing higher discounts. A recent study by the Centers for Medicare and Medicaid Services (CMS) showed discounts of 12 to 21 percent, and in many instances, even more. Competition among the card sponsors is leading to higher discounts for beneficiaries.

So much for the idea that direct Government involvement rather than market competition would get beneficiaries a better deal.

That is not the end. On top of all this, the last version of Graham-Kennedy did not even really offer a Medicare drug benefit because states would have administered it under their Medicaid programs.

An analysis conducted by the Centers for Medicare and Medicaid Services at that time showed that many States would have had to shoulder a sizable new financial burden if the Graham-Kennedy plan passed-a $70 billion unfunded mandate.

Arizona, Arkansas, California, Colorado, Iowa, Louisiana, Montana, Oregon, South Dakota, Washington, and West Virginia were among the hardest hit States.

At a time when States were already struggling, the second Graham-Kennedy approach would have left them with few other avenues except raising taxes to implement the drug benefit.

So while the opponents of the new Medicare drug benefit have been here on this Senate floor yelling sometimes at the top of their lungs about it, this was their plan, which was supported by 45 Democrats including the Democratic leader and Senator KERRY.

In addition, the second Graham-Kennedy plan-as well as the first-did nothing to strengthen and improve the Medicare program.

The Medicare bill we passed last year added new coverage choices and benefits. It addressed provider payments issues to make sure that beneficiaries have access to physicians and hospitals because otherwise a prescription drug benefit-or any benefit for that matter-would be meaningless.

So I think we can clearly see that the Graham-Kennedy proposals were bad medicine.

Mr. President, as I said, it is one thing to tear something down when you have a better plan. But, as you can see, this was their plan.

Their first plan offered a drug benefit that was not a permanent part of Medicare and it had limited drug coverage, a one-size-fits-all benefit-take it or leave it. Their next plan didn't give 70 percent of seniors even basic coverage, it had a huge gap in benefits, and a Medicare low income benefit that wasn't even run by Medicare.

To me, that was unacceptable in 2002 and it's unacceptable today. Instead, last year a bipartisan coalition worked to give beneficiaries a meaningful and permanent Medicare prescription drug benefit and a revitalized Medicare program.

I yield the floor.
BREAK IN TEXT

Mr. GRASSLEY. Madam President, just to remind the Senator from Massachusetts, I was chairman of the committee during this period of time for 4 months-from January until May of 2001. The Democratic Party chaired this committee from June of 2001 through all of the debate on the Medicare issue. I was not in charge of that committee at that time.