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

Date: Nov. 25, 2003
Location: Washington, DC
Issues: Drugs


Mrs. CLINTON. Mr. President, this is a sad day for seniors and a sad day for America. I have long fought for a prescription drug benefit, and I am truly disappointed that this bill fails to adequately address this need. Seniors deserve a comprehensive, reliable prescription drug plan. This is no such bill. It is a weak benefit meant to cover the true intentions of its authors-privatizing Medicare. In short, the bill Republicans are passing today is a wolf in sheep's clothing.

This bill, over time, will bring about the unraveling of the Medicare system, breaking a promise we made to our seniors. It does all this under the cloak of a prescription drug benefit that is far too small and far too weak to justify the negative side effects.

To illustrate how this bill begins the demise of Medicare and sets our Nation back in its effort to care for seniors, we need only to look at the years before Medicare, when the private market failed to adequately serve the elderly. This sicker, costlier population was an unprofitable group for private insurers to cover. It was impossible to take care of this pool and still keep premiums affordable. Before we passed Medicare in 1965, 44 percent of seniors were uninsured. Now 1 percent of seniors are uninsured-a lower rate than any other age group. Medicare does this by being able to spread the per-person costs across a large number of people to pool the risk.

This bill, however, fragments the risk pool and allows private plans to "cherry-pick" the healthiest seniors. Left behind will be a group of Medicare applicants that are far more expensive per person. This will create a two-tiered system and start an insurance cost death spiral that will unravel Medicare's financing. Medicare is a promise we made as a nation to guarantee seniors the health care they need in their golden years. This bill betrays that promise. And it does so under the false pretense of a prescription drug benefit. While promising negligible prescription drug coverage, this bill immediately puts benefits at risk for millions of seniors, including retirees, members of state prescription plans and those who are dual-eligible for Medicare and Medicaid-the poorest and the sickest. I voted against this bill for these reasons, and because these flaws will particularly harm New Yorkers.

This bill contains little to prevent employers from dropping retiree coverage. That will disproportionately affect New York, which has a higher percentage of seniors with retiree health than other States. In New York State, 36.5 percent of Medicare beneficiaries have retiree coverage compared to a national average rate of 31.8 percent. Over 200,000 Medicare beneficiaries in New York will lose their retiree health benefits under this bill.

This bill will also reduce drug coverage for the lowest-income and sickest Medicare beneficiaries-those dually eligible for Medicare and Medicaid. In a cost-savings provision, this bill will ban Medicaid from filling in the gaps in coverage by prohibiting Medicaid dollars from covering prescription drugs not covered by the new Medicare drug plan. This could hurt 6 million nursing home residents, people with disabilities, and truly indigent seniors nationwide, and over 400,000 in New York alone.

This bill also fails to protect seniors who hope to stay in state prescription drug plans, like New York's EPIC. Unless corrected, this bill will force EPIC to comply with private drug plans preferred drug list, hampering EPIC's ability to "wrap around" Medicare and supplement the drug coverage. The state legislature will be forced to change the law and the design of EPIC to continue to program.

Retirees, dual-eligible and state plan participants are not the only losers in this bill. The premium support provision will also hurt seniors in various regions selected for this experiment. These seniors will incur a surcharge in their Medicare premiums others will not have to pay. The seniors who want to stay in traditional Medicare but fall in a metropolitan area chosen for the premium support "demonstration" will have a 5 percent surcharge over their counterparts in other States. In the future that surcharge could spike to 88 percent if the "demonstration" is expanded to a full-premium support privatization effort. New York seniors in Rochester and Buffalo are at risk of being treated in that discriminatory manner. New York State also has two other Metropolitan Statistical Areas-Albany-Schenectady-Troy, and Glen Falls-that face the possibility of being chosen and whose seniors are therefore at risk of having to pay more in Medicare part B premiums than other seniors in the U.S.

The bill also hurts seniors and individuals with disabilities by raising every Medicare beneficiary's deductible for physician services immediately, before seniors and people with disabilities even receive any benefits. Yet it fails to deal with the rising price of prescription drugs. It guts re-importation, weakens the generic provisions, and goes through the most unimaginable contortions to undermine government bargaining power, or any other checks on skyrocketing prescription drug prices. At the same time it places a 45 percent general revenue trigger on overall Medicare spending. This puts existing non-drug benefits in jeopardy by placing an arbitrary lid on spending and allowing drug-related spending to grow uncontrollably. That means other Medicare benefits will get squeezed into tighter and tighter fiscal constraints. If they can't fit those constraints, this bill forces those existing benefits onto the chopping block year after year.

I and many of my colleagues have expressed concerns, not just with aspects of this bill, but with the appalling process with which it was thrust upon us. As complex and confusing as this bill is, the senate discussed it for less than a week now. We have not been given ample time to understand this bill, and our constituents have not been given adequate time to discern how it will affect their lives.

Fortunately, there are some provisions included that I support. I am very glad to see that this bill stops the damaging cuts to physician payments and provides a small increase to physicians instead. I am pleased that the bill includes between $300 and $400 million for rural and small community hospitals and health providers in New York, while also providing additional funds for public and other hospitals who serve a disproportionate number of uninsured or Medicaid patients. And while I would have liked to see all teaching hospital cuts averted, I am pleased that at least some improvements were made for graduate medical education, since New York State trains many of the graduate physicians in the nation. This bill also includes a version of Senator SCHUMER's proposal, which provides greater market competition for generic drugs. And finally, this bill contains a proposal that I offered as an amendment on the Senate floor-the comparative effectiveness research provision. This will assure that we spend money on drugs that are most effective, not just the ones that are most advertised.

These positive provisions, however, should have been attached to a good bill. They are not enough to justify undermining the promise of Medicare. I believe New York deserves a better bipartisan alternative than the one that passed today, and I will continue fighting this year, as well as in years to come, to correct the deficiencies I've described today so that Congress might deliver on the long-awaited promise of a simple, affordable, comprehensive prescription drug benefit for all seniors.

Like so many other pieces of legislation we have witnessed in the past two and a half years, this bill is designed to please special interest and not the public. It will be a benefit to drug manufacturers. And it will be an benefit to private insurance providers. They are the big winners here, and that's not right.

We need a bill that will benefit seniors. They deserve a benefit that is comprehensive, wide-ranging, and reliable. Today's bill is mainly a bill to privatization of Medicare. And it's not only seniors who will be harmed. All Americans, young and old, will deal with the financial and medical consequences of this bill for years to come. This is a bad bill for seniors and a bad bill for America.