Statement Of Senator Patrick Leahy
On The Medicare Prescription Drug Bill Conference Report
November 25, 2003

[Senator Leahy voted against this final version of the bill, which passed the Senate today (Tuesday); in June he had voted for the Senate’s much-different version.]

Mr. President, seniors need and deserve a stronger prescription drug bill than this one. 

The creation of the Medicare program in 1965 was a tremendous accomplishment.  With Medicare, older Americans would never again have to face a terrifying future with no health care coverage.  And since that time, millions of elderly and disabled citizens have come to know and trust the quality health care that Medicare ensures them.  But Medicare’s success is marred by one significant factor: the lack of coverage for prescription drugs.  When Medicare was created, prescription drugs did not hold the pivotal role that they now have in health care treatment and maintenance.  Medical science has advanced since Medicare’s charter was enacted, and senior and disabled Americans have been waiting a long time for Congress to remedy this gaping hole in coverage.

We need a meaningful prescription drug benefit under Medicare, and many of us have been pushing for years to accomplish that.  This movement has steadily grown, and for six years we in this body have been debating and working toward this goal.  In June of this year the Senate passed a bi-partisan prescription drug bill that I supported.  I supported that bill – even though I thought it was weaker than what we need – because it was a solid start.  And that is why it gives me grave concern to see the direction this conference report has taken.

We have before us eleven hundred pages – which we have had little more than three days to examine – that run far afield of the goal of adding a prescription drug benefit to Medicare.  It concerns me that some of the provisions in this bill – provisions which were never a part of the bill I supported in June – will do more harm than good.  I know that many of my colleagues worked long and hard to produce this bill.  I respect their efforts and their best intentions, but Vermonters and Americans need and deserve far better than this.  We passed a decent bipartisan bill once before this year.  I know that we can do better than this compromise before us, and that is why I will be voting no.  Instead of trying to rush through eleven hundred pages so that we can go home for Thanksgiving and adjourn for the year, I think that we need to keep working on this important issue until we get it right.    

Mr. President, I am concerned that the measure before us moves Medicare down the road of privatization and does not adequately protect the access to the prescription drug benefit of rural seniors in traditional Medicare.  I am concerned that fewer low-income seniors will be helped with their costs, and it troubles me that the need to bring down the ever-escalating costs of prescription drugs has not been addressed in this bill.

Under the conference agreement, a significant amount of money – twelve billion dollars – is set aside in a slush fund for the Secretary of Health and Human Services to entice insurance companies into Medicare.  The conference agreement also includes a proposal to experiment with privatization of the Medicare program in at least six areas of the country.  This troubling provision could impose increased premiums for millions of seniors in traditional Medicare, potentially forcing them to leave the program that they know and trust.  And making this experiment even worse, the federal government will overpay private plans – putting Medicare at an unfair disadvantage – to offer the same benefits that traditional Medicare covers for less.  Mr. President, why are all of these extra payments necessary?  If the private insurance model is so effective and efficient, why do we need to pay them more than we pay for traditional Medicare?  No one can credibly argue that doing this makes sense.

The reason that we needed Medicare in 1965, and the reason that we will continue to need Medicare in the future, is because the insurance model fails elderly and disabled people.  It is not all that complicated.  As we get older we inevitably get sick and we need to take more trips to the doctor and to the hospital to manage and maintain our health.  This costs money, and the insurance companies know that they lose money when the bills have to be paid not occasionally, but frequently.  Instead of sending billions of dollars to insurance companies, it is far better to use those resources to strengthen Medicare and to create a stronger and more reliable prescription drug benefit run directly by Medicare.

In the earlier Senate bill, I accepted that we could try this private delivery model for the prescription drug benefit because rural seniors in traditional Medicare – this is all of the seniors in Vermont, by the way, because private plans have chosen not to operate in our rural state – would be assured of having a choice of two stand-alone drug plans.  And if those two plans did not exist in Vermont’s region, then Vermonters in traditional Medicare would be guaranteed access to a standard government fallback plan.  Unfortunately, this essential protection was weakened in the conference agreement.  Instead, Vermonters will be considered to have adequate choice – and therefore no access to the government fallback plan – if there is only one stand-alone plan and one managed care plan.  What kind of choice is that?  The choice that Vermonters in traditional Medicare will have under that scenario is either to sign up for that one stand-alone plan that happens to be offered, or to forgo the new prescription drug benefit altogether.  That doesn’t sound like much of a choice at all. 

I am also concerned about the impact that this bill will have on low-income Medicare beneficiaries.  It is true that the bill provides generous subsidies to low-income seniors, but the earlier Senate bill covered more people: almost one million Americans who would have had access to a subsidy under that bill will not receive help with their premiums, deductible, and cost sharing under this bill.  Three million more Americans will not qualify for help because they have minimal savings and other assets.  In Vermont, that amounts to about seven thousand people who will be worse off under this agreement than under the Senate bill.  Furthermore, thousands of Vermonters who currently have prescription drug coverage under the Medicaid program could end up with less generous coverage under this plan.

The real winner under this agreement is the drug industry.  Many express concern over the high cost of creating a Medicare prescription drug benefit.  I would suggest that we could have done something very simple to bring down the cost:  We could have used Medicare’s market power to negotiate lower prices for the medicines the program will be buying.  Instead, this compromise agreement actually prohibits this common sense approach to cost containment.  Thanks to objections by the drug industry, provisions designed to speed low-cost generic drugs to market were weakened in the conference agreement.  And last, but certainly not least, the drug industry prevailed in their efforts to block a provision to allow Americans access to lower-priced medicines from Canada.  This is unacceptable.  A majority in the Senate voted to allow re-importation and the House of Representatives overwhelmingly supported a strong re-importation provision.  Somehow, the conference agreement is weaker than either provision passed in either body.  How long do we intend to force Americans to continue to pay the highest prices in the world for their indispensable medications? 

It is wrong to have hijacked this bill as a locomotive to pull the drug industry’s baggage.  House leaders have taken the industry’s side over consumers’ interests on issue after issue.  They have given the industry a veto over giving Medicare the market leverage to bring down costs.  They have done the drug industry’s bidding by blocking drug reimportation.  It is wrong to pad the drug industry’s wallets at the expense of the seniors of Vermont and the nation.

I remain concerned that cuts in payments for cancer drugs and services – estimated to be in excess of eleven billion dollars over the ten year budget window – threaten access to cancer care across the nation and particularly in rural areas.  And though the conference agreement does reduce the number of retirees likely to lose their employer-based coverage as a result of passing this bill from the Senate level, the Congressional Budget Office still estimates that close to three million retirees will lose their coverage.  That number is still far too high and could affect thousands of Vermonters.

Finally, I question why we set aside six billion dollars – money that could be spent to reduce the troubling gaps in coverage under the prescription drug benefit – to create Health Savings Accounts that have nothing to do with Medicare and that many analysts predict will boost the costs of comprehensive employer-based health insurance across the country.

I do credit this bill with some good provisions to provide increased payments to doctors and hospitals, particularly in rural areas.  I fully support these provisions, but their inclusion cannot overcome the problems in the rest of the bill. 

Mr. President, I hope that I am proven wrong about the impact that this bill will have on the Medicare program and on the help, or lack thereof, it will provide to Medicare beneficiaries.  I think we can do better and that we must do better.  As seniors learn over the course of the next two years what kind of coverage they will be getting – as they see how complex the system and the benefits are – I predict that they will agree and that we will be returning to the drawing board very soon on prescription drugs.      

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