Veterans Health Care Funding Guarantee Act of 2003

Mr. President, I rise to oppose the Dorgan amendment on importation of foreign drugs. It is essential that my colleagues understand the gravity of what we are about to vote on today. My colleagues yesterday passed the Cochran second degree amendment by voice vote, ensuring that none of the provisions in the Dorgan amendment would become effective unless the Secretary of Health and Human Services certifies to Congress that the implementation of the Dorgan amendment would (1) pose no additional risk to public health and safety, and (2) result in a significant cost savings for Americans.

While this safety and cost savings certification threshold determines whether the Dorgan importation language would ever become effective in the first place, I believe that in this era of increasing bioterrorist threats, now more than ever, we should not pass new drug importation legislation at all. Allowing the importation of drugs from Canada by pharmacists and wholesalers would simply encourage further proliferation of schemes to use Canada as a transshipment point for sending unapproved, expired, counterfeit or otherwise dangerous drugs to American consumers. The Assistant Deputy Minister of Health Canada clearly stated in a May 9 letter this year that, ``The Government of Canada has never stated that it would be responsible for the safety and quality of prescription drugs exported from Canada into the United States, or any other country for that matter.''

Allowing pharmacists and wholesalers to import drugs directly from sources outside the U.S. will further encourage the proliferation of purportedly ``Canadian'' Internet Pharmacies that are not from Canada. A 2003 Global Options report stated that 33 percent of so-called ``Canadian'' internet pharmacies are not from Canada. One was ``Canadarxfree.com'' and the actual country of origin was Mexico. Another, ``Trustedcanadianpharmacy.com'' had Barbados as the actual country of origin.

Another troubling real-life example cited by Bill Hubbard, the Senior Associate Commissioner for Policy, Planning and Legislation at FDA during a June 12, 2003 hearing before the house Government Reform Subcommittee was, ``. . . we have an example of an 82-year-old gentleman who bought two drugs from a website.--[H]e was told on that website and when he made the phone call that he was getting a U.S. produced drug, sold in Canada and sold back to him. He got Indian drugs that are not approved, have no labeling, no information and he called the FDA and was outraged why are we letting this stuff in.'' The FDA determined the drugs were counterfeit.

The so-called documentation requirements in the Dorgan amendment could easily be circumvented, forged and lack verification standards. In July 2002, the Department of HHS sent a letter to Senator Cochran that described the problems with allowing pharmacists and wholesalers and even individuals to import drugs from Canada, ``Since counterfeits can easily be commingled with authentic product, either by the case, by the bottle or by the pill, there is no sampling or testing protocol sufficient to protect against the grave public harm they pose.''

All of my concerns about importation and risks to the health and safety of Americans that I have expressed do not even include the reasons I believe this Dorgan amendment is truly unnecessary. We are in the midst of debating and passing a landmark Medicare prescription drug bill. Through this historic legislation we will provide our seniors with affordable access to medicines, without exposing them to the very real risks of counterfeit, subpotent, unapproved, adulterated, or misbranded drugs from importation. We have also gone a step further in addressing the affordability of medicines by overwhelmingly supporting the Gregg-Schumer amendment yesterday, which will allow generics to enter the market faster. Together with the President's recently issued final rule, this amended bill will save Americans money by improving access to more affordable generic drugs. I commend the President for proposing in this 2004 budget request, an unprecedented increase of $13 million in spending for FDA's generic drug programs. By increasing the program's size by almost one-third of its current size, FDA will be able to hire more generic drug application reviewers and approve generics faster.

With all of the new information we now have about the dangers of importation and fraudulent websites, we owe it to our seniors to pass a meaningful, comprehensive Medicare drug benefit without exposing them to the very real risk of obtaining counterfeit imported medicines.

I again urge my colleagues to vote ``no'' on the Dorgan amendment, even as modified by my second degree amendment.

I yield 2 minutes to the Senator from Mississippi.

Mr. President, on my leader time, I rise to speak in opposition to the Dorgan amendment on the importation of foreign drugs. Before the vote, I want to let my colleagues know that I do believe this amendment has the potential for opening doors that would be dangerous in this day and time. I say this in spite of us passing by voice vote the Cochran amendment yesterday, which does two things. It says none of the provisions of the underlying Dorgan amendment would become effective unless the Secretary of Health and Human Services says it poses no additional risk to public health and safety and, two, results in significant cost savings for Americans.

I supported that amendment. We all did; it was a voice vote. That is very important. It does change the threshold a bit, but I will vote against the Dorgan amendment because I believe in this era of increased bioterrorist threats, we, now more than ever, should not open the door and pass new drug importation legislation at all. The reason I say that, very quickly, is the Canadian Government has stated:

The government of Canada has never stated that it would be

responsible for the safety and quality of prescription drugs

exported from Canada into the United States, or from any

other country.

If we open this door, Canada has the potential for--first of all, they cannot certify safety but, secondly, become a transshipment port for other countries if we open this door to Canada. There are a number of statements that have been made. The other concern I have is on the documentation requirements. I am afraid, in the Dorgan amendment, they could be forged or circumvented, and there is a lack of verification standards, I believe.

Lastly, it is important we understand our underlying bill to which the Dorgan amendment is being applied has as its purpose to make drugs more affordable and lower that burden overall. I am hopeful we will accomplish that with the vote at the end of next week--drugs that are certified to be safe, that have gone through the FDA approval. I will be voting against the Dorgan amendment. I encourage my colleagues to do likewise.

Mr. President, for scheduling this afternoon, in 15 or 20 minutes I am going to speak for 20, 25 minutes, and then Senator Byrd is going to come over later as well. We have plenty of time, but if sometime in the next 30 minutes or so I may have the floor for 20 or 30 minutes, that will be helpful.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, on this Friday we have had a number of speakers come forward over the course of the morning and the afternoon on the topic of how best to improve Medicare, strengthen Medicare, preserve it, and build upon what we have learned in the past to bring it up to date and to give seniors the opportunity to receive the type of health care available today of which most people in the private sector are able to take advantage but to which, because of the structure of Medicare today, seniors simply do not have access in a way they really deserve: Things such as prescription drugs, which, as we heard debated 20 or 30 minutes ago by the distinguished Senator from Florida, are so absolutely critical to the health care toolbox, to the armamentarium out there today to take care of seniors and individuals with disabilities to prevent more serious illness for people on those pills that keep their blood pressure down at a reasonable level, that prevent debilitating strokes, prevent massive heart attacks; if they do not take that pill, those acute diseases that become chronic diseases occur, or episodic acute diseases occur.

There is such a high barrier for prescription drugs that they are less likely to reach out and get the drugs. The whole purpose is to reverse the burden in a way that is sustainable over time. As politicians, we want to help people, we want to help them now. But if we do it in a shortsighted way, we can create bigger problems for people 3 years out, 5 years, 10, 15, 20 years out, or at this time we must think 30 years out.

In the next few minutes, I will again step back and look at where we are in health care, what we are doing. Then we will be able to come back in next week and look at a lot of the individual amendments. They can be very technical. They involve a lot of terms that are unfamiliar to even a lot of Senators but also to the public at large.

In the next few minutes, I want to take this big-picture look and introduce the demographic challenge that should be the backdrop for all of our discussions when we look at health care for seniors, for promises we are making today that we are writing into legislation to make sure we are doing it in a way that can be sustained over time. This is talking to seniors but, even probably more directly, to the near seniors and to the younger generation because it is their health care we are talking about. It is their money we are using, in large part, to pay for the health care security for seniors today. Thus, I think we have to look at it in this intergenerational way.

In the big picture, the U.S. health expenditures for the dollars spent in 2001 and 2002 are similar, although this chart shows the most recent data for today of all health care dollars spent in the United States of America. The red on the chart is public expenditures, public programs--what is government--and the blue is the private sector. It is an interesting chart because it shows about half of the health care dollars run through government programs--Federal, State, and local--and half of the health care dollars are spent in the private sector.

What we have the opportunity to do now is marry these two with public-private partnerships, to take care of one segment of these health care dollars, and that is this 17 percent, this bright red 17 percent--almost a quadrant--but 17 percent of the overall health care dollar which is spent on and for and by senior citizens and individuals with disabilities, about 40 million people. That is 17 percent.

What we were concentrating on the last week, really the last several months, is this part of the pie. Medicaid, which is lower income, other Federal programs, other State and local programs are the other public programs--46 percent of the overall pie.

What we are going to be doing is capturing the very best out of the private sector, in terms of health care delivery, technology, prescription drugs--which, remember, are not up in this red sector-- capture the best of the private sector with the best of the public sector, marry the two, and thereby give the seniors who fall into this sector here, this piece of the pie, better health care, better value that can be sustained over time. We are capturing the best of this section with the best of this section, marrying public and private.

It is a new concept. Traditionally, Medicare has been command and control, Washington, DC-based: we dictate; we say what is in it, what is not in it. We dictate, micromanage the decisions. The problem with health care today, with the advances in health care delivery, with the new innovations, with the human genome project, with the new technology, it is not being adopted into this sector. To me, that is sort of the big picture I want to begin with.

The challenge, if we are looking long term, if one of the goals of what we do now is we must be responsible for the future, we need to recognize what the demographic backdrop is. What does the future look like? The future looks different now, from a demographic standpoint-- demographic being numbers of people, ages of people, genders of people. That is what I am talking about when I am talking about demographics. That backdrop is changing more radically than ever, than at any time in the history of this country. I will tell you why shortly. It is changing in several ways.

This chart is the number of Medicare beneficiaries. That 17 percent I just showed you was of the overall health care dollar, how many people fall in that section of that pie chart. Just look at two bars on this: This is the year 2000; this is in the year 2030. The important thing is there are 40 million beneficiaries--beneficiaries just means seniors, people who are in the program in the year 2000. You see it goes up, but just jump over and you can see it is 77 million in the year 2030. It seems like a long time from now, but it is not. That is not very long from now. But from this green bar to this green bar is a doubling in the number of seniors.

Historically, we did not have that. I will show why we had this doubling that we have to face up to if we are responsible legislators.

No. 1 is the baby boom. I love this chart because it is the way I view the baby boom. You see, it really is a baby boom. This, along this Y axis, is births per woman. You can see how it has changed over time. This is 1940, 1950, 1960, 1970, 1980, 1990, 2000--so we are about where this dotted line is now.

You can see that we had this baby boom, this fertility curve, this increase in population right after 1945, up to about 1970, with the peak around 1959, 1960. You just add 60 or 65 years to this part of the chart and you quickly get out to 2010, 2015, 2020. That is what we need to look for. In other words, this fertility curve, this baby boom, this increase in the population has just moved right across this chart, and this baby boom is going to begin to hit us in about 2008--5, 6, 7 years from now. It just begins to hit, and then over the next 5, 10, 15 years it peaks and then goes back down. But it goes back down over a period of about 30 years. So we are talking 2010 out to 2040, 2050.

The big thing is this anomaly is unprecedented in entitlement programs. This is what we have to prepare for.

If this is the Medicare system here, and we are taking care of seniors, we are going to have a doubling in the number of seniors. One of the reasons is because of the baby boom. The other reason--and I am proud of this reason. I think we all are. I am, as a physician, because physicians focus their lives on health care and improving length of lives as well as quality of life. This is probably, to me, the easiest way of looking at the fact that people are living longer now than they did 10 or 15 years ago, and as we improve health care, as we do better with preventive care and better technology and get people to eat better and exercise more, we are going to continue to have these seniors-- which are already doubling in number--live longer. Let's just take an example.

This is what it was like in 1940, 1950, 1960. What this means is-- let's say I am 65 years old. If I am 65 years old, in the year 2000 I would be predicted to live another 20 years. This is years of life remaining at age 65. That is pretty good.

Let's say if it were for me, 60 years old, I would be 65 plus 15 is 80.2 years of age. If I were a woman, I would be able to say I am 65 years of age, and I am

going to live 20 more years. That is pretty interesting.

But the good news is that when Medicare started, when you were 65, say, back in 1965, if I was 65 years of age, they would say I am only going to live 13 more years. But because health care has gotten better now, I am going to live 15 more years, and if I am out in 2030, I am going to live 17 more years.

You have not only more seniors but each one of those seniors is living longer. Thus they are going to be in the Medicare system for a longer period of time than what we would have thought or predicted back, either in 1965, the year 2000, or 2030.

If we are good, which I think we are in terms of science, technology, health care, this is going to increase more and more. I don't know where it is going to stop. Nobody really knows, in terms of how long people will live. But it is interesting, doubling the number of seniors because of the fertility curve, and each one of those seniors will live longer, of which we are all proud.

As an aside, this differential between women and men is pretty remarkable. If I am talking to a woman 65 years of age, I say you are going to live 20 more years. If I am talking to a man, you are only going to live 15 years. Why is that? There are a lot of hypotheses, and we don't fully know why the difference, why it is. But the point is they both are going to live longer.

This is sort of a summary chart. In 1970, we had 20 million people. Now we have 40 million people. You are going to see this line break. In 2030, we are going to have 77 million people. Again, the summary chart: A lot more people coming out of the system. That is one component.

Let's say this is the Medicare system. We say trust fund but it is not really a trust fund like in a bank or the way you envision money accumulating and then paying it out. That is just not the way it happens. It is a pay-go system, which means for every senior over here taking out for health care, you have workers--that is most of the people who are probably listening to me right now, people who have been working--who have to support it. The moneys they pay on April 15, or whenever they pay their taxes, go out to support these seniors. The money we are spending is not money seniors paid in in the past; it is a pay-go system. That is why this trust fund is not really a trust fund.

What is interesting there, not only do we have a doubling of the number of seniors, but we have fewer workers paying into the system, which the very next day are paying out to support an increasing number of seniors. This is fascinating because it, too, is a part of that fertility curve, in the 1940s and 1950s.

You will see in 1970 there were 7 of these individuals, 7.3 to be exact--paying taxes to support every senior in the system. What is interesting is that in the year 2000 that has come way down. Instead of having 7 people over here working to support each senior, you have 3.9--say 4. You have these 4 working. So, therefore, they are having to work twice as hard or pay twice as much for taxes, or work twice as many hours a day than they were working in the past because you have fewer of them supporting each worker--for health care.

Again, with the fertility boom, as it comes through, this is going to fall, by 2030, to only 2 or 2.4 workers, and they are going to have to work that much harder to support whatever we promise and whatever health care we give to seniors.

All of sudden, we saw a huge challenge. We can promise so many things right now. We can promise to improve their benefit. We can promise to give them whatever they ask for and what they want. But in doing so, if we fulfill our obligation to both this generation and also the next generation, we need to do so in a way that can be sustained. We have a doubling of the number of seniors with fewer people paying in, which compounds the challenge of technology and adding benefits and the challenge of looking at chronic care.

The product of that is, if we didn't change the law at all--if we just kept the Medicare law as it is, which is not realistic because it will change no matter what--we are spending about $226 billion a year now. In 2030--not with this bill--we are going to be spending $448 billion and fewer people are going to be paying into that system to expend the $448 billion that we have today. That is why you will hear again and again from Members such as the Senator from Oklahoma, Mr. Nickles, and also the Senator from New Hampshire, Mr. Gregg. They will again and again remind me and our colleagues in our caucus that whatever we do, we need to do it in a way that can be sustained over time. We can't be making promises that cannot be in any way upheld or fulfilled in the future by putting an unnecessary and unfair burden on that next generation.

This is a chart which I almost hesitate showing. This summarizes and puts things in perspective why we have to address Medicare now.

No. 1, because seniors deserve better health care security. It is just too obvious to me that without prescription drugs, and without preventive care and disease management within Medicare today, they are not getting what they deserve.

The second issue is as important as Social Security. At some point we need to come back and address Social Security as well as the cost of the demographic shift because of our responsibility to seniors and that next generation.

But if we look--this is the financial challenge--at the unfunded promises over the next 75 years--I am not going any further out than 75 years, but it is important having gone out 30 years to mention the next 75 years--if you add up all of the unfunded promises, promises that are made, mandates that are in the law but we haven't determined how to best pay for them; as comparison, the debt held by the public of $3.6 trillion, just for comparison purposes--if we look over the next 75 years for Social Security, what is the shortfall there? That is why we have to come back and address it at some point, and I am not sure when it will be. But it is $3.6 trillion, and somebody is going to pay for it. We are going to have to address that.

But Medicare and health care for our seniors--this is not the bill on the floor; this is today, the current law as it exists--there is a $13.3 trillion Medicare shortfall over the next 75 years.

That is one of the reasons I think it is important for us to address Medicare now, relatively early in this Congress, why we should not delay, why we do need to finish the bill next week, and have the House do the same, have the President sign it as soon as possible, but also stress the point that we have to get this thing right. We have to do it responsibly because what we are doing as a product of modernizing Medicare is making sure we get the very best value, that it is an efficient system, that it is adding a brandnew benefit of prescription drugs which even isn't calculated in this. This $13.3 trillion is Medicare as we have it today.

One of the things we are going to do is add the $400 billion benefit over a 10-year period--not 75 but a 10-year period on top of this already $13.3 trillion Medicare shortfall. We are going to add a benefit on top of that. That is why we can't just add a benefit on top without addressing Medicare overall. That is why you heard the President from day 1 say yes, we have to have prescription drugs; yes, we have to improve the nature of the benefits; but at the same time we have to address reform because not to do so would be irresponsible as the leader of the United States of America. And the same thing goes on in this body today.

That is why the bill we have brought to the floor is not just a Medicare package and not just a bill that says let us promise pills to seniors, but says, yes, those medicines are critical and vital, but at the same time we have to address the overall integrated delivery of health care which, I would argue, allows us to have a more efficient system, a system that has more value, and a system that allows us to address, as we look out to the future, this huge unfunded promise we have made in the past.

When we are in the middle of talking about each of these individual amendments and the technical nature of materials, it is hard to back up and look at some of these principles that underlie doing this thing right--doing it in a bipartisan way, allowing ample time, as we have had all week, to fully debate the amendment process.

This is the issue Senator Dorgan talks about a lot, and he talks about

the Finance Committee a lot. And we are beginning to talk about it a lot on the floor. I don't want to get into the debate, but it will be a backdrop for much of the discussion next week.

If you look at Medicare beneficiaries and a pie chart of 40 million people, all of those 40 million people are not very expensive in what they actually expend in terms of health care expenditures.

Over here, these are all the beneficiaries. This is 100 percent of the 40 million people. Over here is health care expenditures.

The point of this is, if you just focus on the orange, 6 percent of all Medicare beneficiaries, about one in two--if this whole body were filled right now, there would be only about five or six of them in the whole body, just six desks, who would be responsible for 50 percent of all the money we put in Medicare. Of that $220 billion which we put in, only six desks--you probably see these six desks around me--would be responsible for half of that money. Why? Because they are sicker; they have more chronic diseases.

Right now, I think as we say in approaching a program that is sustainable that gives very good care, wouldn't it be great to be able to identify this 6 percent which accounts for 50 percent of these expenditures--or it could be the top 15 percent or 14 percent--this 6 percent, and the 8 percent which accounts for 76 percent--wouldn't it be great if we made absolutely sure that in that population we gave them the very best care possible in terms of prevention, in terms of management, in terms of coordination, in terms of an integrated way of taking care of their health care problems and making sure they are treated and cared for?

I am absolutely convinced--and I say this having taken care of thousands of Medicare patients, which I was blessed to be able to do before coming here--if we had the data system to be able to identify who they are and had them in the appropriate system to manage their care, they would be better cared for with a better value for the dollar.

But this is a fascinating chart on which very few people have focused. We will get back to it I think in the debates next week.

I mentioned Senator Dorgan. He and I have been discussing the same charts many times. This chart is very similar to the prescription drug expenditures as well. We can focus on certain populations.

This is an extension of Senator Dorgan's conversation, and my conversation with him. These ``CCs'' are ``chronic conditions.'' A chronic condition is something such as congestive heart failure. Congestive heart failure is when the heart gets big, it just does not pump quite as well. It is like water behind a dam; it begins to fill up in the body. It fills up in your lungs. You get short of breath and swelling in your feet. If you see people who are a little short of breath, typically it is an element of congestive heart failure, if they have heart disease at all.

But what is interesting is, if you look at Medicare expenditures, for people who only have one chronic condition such as heart failure, they account for about 4 percent of expenditures. If they have two chronic conditions--say, heart failure and diabetes--they would account for an additional 7 percent of expenditures. If they have three or four or five chronic conditions, they account for about 65 percent of expenditures.

What I am suggesting is, if you could identify people with five chronic conditions or four chronic conditions--and right now, it is amazing, because in Medicare, in our data base, you really cannot do that, but in a newer system, an up-to-date system, if you could identify these people and then manage them better, to make sure you had integrated care, coordinated care--maybe it would be a phone call from a nurse once a week, to say: Have you weighed yourself today to see if you picked up any weight? If you have picked up weight, you better come in and see us because your lungs are filling up with water. But in a newer system we could catch it before they are hospitalized, and all of a sudden you have saved the hospitalization or maybe someone's life.

That sort of integrated care is just not a part of Medicare today, and it should be. Thus, if we better manage these people--and ``management'' is not a great word. If we better treat them, if we better care for them, we would cut overall costs and improve the quality of care. We simply cannot do that in the Medicare program today.

Thus--and this comes to what this bill is all about--how do you address some of those issues? The bill on the floor allows us to address each of the issues I have mentioned.

In 2006, seniors, after having had access to a prescription drug card--and every senior could have a drug card in about 9 months from now. If we can pass this bill next week, get it through conference, have the President sign it, probably 6 to 8 months after that every senior could have a prescription drug card that would give them some benefit in terms of lowering the cost of their prescription drugs. That is a pretty good, immediate response, if we can get this bill through on time.

In the year 2006, though, the prescription drug card begins to be replaced by three options an individual senior would have. They could keep what they have today--traditional Medicare--and with that they could have access to an insurance drug package; No. 2, they could take advantage of Medicare+Choice, which is a coordinated care, integrated care type program; or, No. 3, they could take advantage of a PPO, which is an integrated health care, coordinated health care delivery system that includes prescription drugs, preventative care, and that chronic disease management.

Thus, as we look ahead in designing this program--and this, as shown on the chart, is sort of the general outlay of the bill itself--you will hear about a lot of amendments over the next week, and those amendments will talk about, for example: Well, what about the size of the drug package in each? A decision in the bill was made to have this same drug benefit under traditional Medicare and Medicare+Choice, which, by the way, has 5 million people in it. And this other program has 35 million people in it today. This prescription drug benefit is the same.

Some people might say: Well, we ought to change the benefit. Some people will say: Let's make sure this is a truly competitive model that takes advantage of what we know in the private sector works, which has more market-based principles--yes, that is highly regulated by the Government--to make sure those benefits are delivered; and those benefits have to be a part of each PPO that comes forth and bids, but let's make this more competitive. And Monday and Tuesday and Wednesday we are going to hear a lot about how to make this a really up-to-date system and as competitive as possible, which would improve quality and improve the value of each dollar put into the system.

So you will hear about market-based competition. It will be maximized in this area, as shown on this part of the chart. Again, people will be able to keep exactly what they have today. So I say to seniors who are listening, you do not have to worry about things being taken away from you or the question: What is Government going to do? Are they going to come in and take away benefits you already have? No. You are going to get access to additional benefits, even if you stay in traditional Medicare. You will be able to take advantage, like 5 million people do, of an HMO.

People start running when they hear that word HMO, but let me tell you, 5 million people who are in these HMOs are pretty pleased because they have access to prescription drugs today or people can choose this PPO model, which is the model that works best in the private sector today. It is the model most people who have employer-sponsored insurance today have. It definitely is the model of the future because of this continuity of care delivered in a seamless way as we look to the future.

Mr. President, I am going to cover just one more little bit different concept as a preface to what we will be talking about next week in the Medicare debate, and that is on what is called the donut. Now I am coming back down from 35,000 feet to about 5,000 feet to look at what will be one of the hot topics and an issue that will be debated in terms of what is called a gap or a donut. I guess those are the two words that are used mainly.

The concept is that people will get a lot of assistance, especially if you are

under the poverty level or under 160 percent of the poverty level. There is no donut for 44 percent of all seniors. There is no gap. There is no donut. I will come back and talk a little about what the donut is. If you are under 160 percent of poverty--that is about $16,000, $17,000, if you are married, of income every year as a senior--there is no donut, there is no gap.

This chart I show you deals with those individuals who are below 100 percent of the Federal poverty level. What this chart shows, in the blue, is the percent of your total expenses in a year that is paid for by the plan. The green is the amount that is paid for by the beneficiary.

So if you have $1,000 of drug expenses a year, and you are below the poverty level, you will have almost 98 percent of all of your drug expenses paid for by the plan, and you will pay $25--very little. It is a very generous benefit.

I will have one more chart that goes above the poverty level to 160 percent of the poverty level.

If you have $2,000 of expenditures in drugs a year, again, if you are below the poverty level, the plan pays for 98 percent of all your drug expenses. If you have $3,000 of expenditures a year, again, the plan pays for about 95 or 98 percent of all your drug expenses. You can see that goes up. If you have $7,000 of drug expenditures a year, again, the plan pays about 98 percent of that.

And this is one of the beauties. Remember, none of these people get prescription drug coverage through Medicare today. I do not know what it is below the poverty level, how some of them get it through other plans. In fact, if you look at all seniors, about two-thirds do get some element of prescription drug coverage somewhere. And we have to be very careful because we do not want to have everybody coming to a Government program.

But the point I want to make is, if you are under the poverty level or indeed at 160 percent of the poverty level, the plan itself is very generous. We are going to hear on the floor next week the question: Is that too generous? Or maybe it is not generous enough. It is hard to argue it is not generous enough, given the fact that 44 percent of all seniors are going to have no donut and get a very generous benefit, and everybody is going to get a benefit.

Referring to the same chart again, for example, this shows, for an individual who has $1,000 of drug expenses or $2,000 of drug expenses, how much they are going to pay for those prescription drugs. So whoever is listening to me right now, they would be able to know how much they could spend on drugs every day and know where they are going to fall.

For example, if you were a heart transplant patient of Bill Frist 10 years ago, you would have probably had about $7,000 in drug expenses every year. Every time I transplanted a heart or a lung, the patient would have anywhere from $5,000 to $7,000 of drug expenses every year. Drugs are expensive and can take your life savings. For every patient I had who had a heart or a lung transplant, they did not go through that procedure without expending $6,000 to $7,000 on prescription drugs every year.

Most of them are seniors. That is one of the reasons why this plan means so much to me. I have a personal interest in that these are people whose faces I have looked into and eyes I have looked into over the years.

Let me go above 160 percent and you see it looks different. What I want to focus on, of the 40 million people out there, of the seniors, the 50 percent richest, 50 percent highest income people. They still get a lot of help. Just graphically look at it. Remember in blue and gray here is the percent paid by the plan. This is 100 percent at the top. So you can see it is anywhere from 30 to 50 percent coming all the way through. This chart, you can look at it all sorts of different ways, but the point I want to make, in the bill, when we talk about gap, it doesn't mean you will be left out. If you fall into what is called a donut or gap, you benefit all the way up until that level, and then through that gap you pay for your prescription drugs. But then at the other side of the gap you are picked up again.

Thus, at the end of a year, what happens? The gap is right about $4,500 to about $5,800. I am looking to my staff member because the figures have changed a little bit as we tried to narrow the gap over the last several weeks. But that means the gap is somewhere right around $4,500 to this bar here, this is $6,000. But, remember, if you are an individual and you are listening to me and you have $4,500 in expenditures, still about 45 percent of all your expenditures are paid for by the plan. And if you are in the gap, the so-called donut, it is little bit less, it is a couple percentage points less, but still right at 42 percent, at $5,000. And then if you are into $6,000, you are back up around 40 percent, $6,000, $7,000, $8000, coming up. The reason why I show this chart is because I have seniors calling me now and saying: What about if I am in the hole of that donut? What about if I am in that gap? Does that mean the Government excludes me, doesn't help me? The answer is absolutely no. You just pick where you are on here and graphically you can see that these are for the wealthiest seniors, and the bar graph I showed you for the poor. I am showing you the two ends, the two extremes. But above 160 percent of poverty, this is the gap right here. So still you are getting huge assistance at the end of the year.

Again, probably the best example, because the gap is between $4,500 and $5,800, would be the $6,000 that at the end of the year you are in the gap between $5 and $6,000, and you are still getting about 40 percent of your drugs paid for. Some people say it should be higher; some people say lower. The point is, on the gap itself, it doesn't mean you are left out in the cold. Over time we tried to minimize it and keep it as small as possible.

We will come back to that later. It is a concept that takes a little bit of time to explain. Depending on who is arguing which side in terms of the gap, there will be some, as you try to make the point, who make that gap sound real bad. Others might minimize it. The reality is, you will be helped wherever you are, even if you are in the gap. You will get huge help as you go forward.

I rise today to address the matter we are debating in the Senate. I believe this legislation to provide a Medicare prescription drug benefit holds tremendous promise and also tremendous peril.

I applaud the leaders of this effort, Chairman Grassley and ranking member Baucus, for bringing this bill to the floor and working in a collegial, bipartisan manner to present it to the Senate and to the American people. It is absolutely essential we finally deliver on the promise many have made for years that we will pass a prescription drug benefit and make it available and absolutely secure to our seniors.

However, 3 weeks ago this Chamber learned a very important lesson. We learned about the importance of details and how a very small change in a very large piece of legislation in a conference report can mean 12 million children would be left out of a child tax credit. Therefore, I think it is imperative we spend the time to ask the hard questions about this legislation and that we exercise caution. So much is at stake for the people we represent.

For example, right now this bill excludes the lowest income seniors who are eligible for both Medicare and Medicaid. In my own State, 219,000 seniors and New Yorkers with disabilities fall into that category. We leave them at risk of a State's decision to curtail or limit or even eliminate certain Medicaid drug coverage and long-term care coverage.

Now we are all in a rush to try to do this to help our seniors, but we do not want to rush through this legislation at the expense of getting it tragically wrong. We have to go over this bill line by line and word by word. The details are changing every minute.

The Congressional Budget Office says one thing, committee staff say another thing. We do not know how much it is going to cost. We do not know exactly what all of the elements will end up being, particularly when we look at what the House has passed. Speaking for New York, that is totally unacceptable. Then we read today in the newspaper the President has a very different idea about two central features of this Senate proposal.

Let's address the real problems and not gloss over them and not rush to some judgment because we are going out on recess in a week. My constituents, from the 80-year-old widow in Utica to the 85-year-old man living in a nursing home in the Bronx, are counting on me to go over this process with care and to cast my vote in a way that will help them, not hurt them.

As I have been talking with my colleagues and certainly as I have been reading the commentary in the press, there is a lot of confusion about this bill. The question is, what exactly does this bill do? How does it work for our seniors? I bet we would get many different answers if I were to ask that on the floor of the Senate.

My constituents and people all over America are trusting us to examine this bill carefully and to gauge the consequences. If we do not take the time to do it, how will we know we are doing what is right?

I am deeply concerned in this case that old saying about haste making waste could certainly come true. For starters, why is this plan so complicated? Why would we purposefully create what I call a new Medicare maze instead of establishing a solid, straightforward foundation for generations to come? We have to look at how this would actually work for the people we say we are trying to help.

I have tried to map it out. Here is the question: How do you get prescription drugs under this plan? I have tried to put myself in the position of a senior, a person with a disability. It quickly became clear this will be a very confusing and in some instances a discouraging process for the vast majority of our seniors.

Here is where we should start in looking at how to answer this question. How do you get your prescription drug benefits under this plan? Let's start with the fact that if you are a senior or a person with disabilities, you are out of this process--no Medicare benefit for nursing home residents, for seniors. Who needs a Medicare benefit more than people in our nursing homes? They are the ones frailest, most at risk; they need more help in order to keep alive and have some quality of life, but they are gone. They are not in this program. If you are in a nursing home and you are getting support through Medicaid right now, you are not eligible. Instead, they would have to rely on what they do now, which is Medicaid. But they would be in an entirely different system, totally at the mercy of the individual States.

I don't know about other States, but in New York we have certainly made an effort to keep faith with these frailest people, seniors in nursing homes, people with chronic and life-threatening and debilitating disabilities, but we are not taking care of them in this plan. They drop out of the Medicaid maze before they even get started.

This plan is really for a senior who has to choose between traditional fee for service with a private drug plan or Medicare Advantage, the private PPOs.

We have created a new Government agency. I don't think a lot of people recognize that. This new Medicare Advantage will be administered by a new agency, the Center for what is called Medicare Choices, created under this bill. So we have ourselves a new bureaucracy. We are going to be spending money on bureaucrats and administrators, instead of on drugs, instead of taking care of our poorest seniors in nursing homes. Even before any benefit is available, this new bureaucracy gets built up and drains scarce resources out of what we can spend for our seniors.

To go back to our seniors here, our seniors have to choose between multiple plans. As you can see, they might have a PPO, with a $45-a- month premium, or an HMO, with a $32-a-month premium. They may have private plans that are available to them. They have to make these choices. Certainly I am all for choice, but we know, from what drug companies themselves have said, there will be many regions of our country where there will not be a lot of choice. So before seniors make that choice, they will need to register how the prescription drug benefits differ under each of these various proposals and whether the drug they need--this is a very personal consideration--whether the drug they need will be covered under the plan they are analyzing.

If a senior looked for the lowest premium--and I can guarantee most seniors will look for the lowest premium because most of our seniors are hard pressed, on fixed incomes, and they are going to be trying to save their dollars, so they will look for the lowest premium--the senior would choose the HMO at $32 a month.

But suppose this HMO doesn't cover the senior's doctor, someone the senior has relied on and trusted for years, but that doctor is not in the HMO? So the senior turns to the plan with the next lowest premium. On here, that would be private plan 2, where the premium is $37. But suppose the formulary used in this private plan doesn't cover the drug the senior needs. Let's assume the senior is on a drug for high cholesterol, and assuming the senior read the fine print, assuming the senior has informed help--which I think is a leap of faith in many parts of our country--the senior may sign up for this plan and not really know it does not cover the drug that has been prescribed for his or her condition.

So what does the senior do? She is in the plan. She finds out it doesn't provide the drug. She has a grievance procedure she can go to. Imagine, we have an 80- or 85-year-old widow. She is trying to understand this. She is in the plan. She gets to keep her doctor, but she doesn't get the drug the doctor wants her to take. The doctor says: In my professional judgment, this is the best drug for you, but I am sorry, the plan you are in doesn't include it on the formulary--the list of drugs that are permitted.

So what can the senior do? The senior can take a drug off the formulary, whether or not the doctor thinks that is the right thing, or the senior can file a grievance and can go through this grievance process, with a hearing, to try to get the drug that the senior's doctor tells her she should be taking for her high cholesterol.

If we do that, we know we have consumed valuable time. We have created yet another bureaucracy. Not only have we created this new Government agency to run this program, now we have created a whole grievance process, putting lawyers to work, putting advocates to work, to try to figure out how to get the drug the woman wants or get the doctor the senior wants. So we have used up a lot of paper, used up a lot of time, and unfortunately taken hard-to-have, scarce resources out of doing what we all want them to do; namely, get the drugs paid for that our seniors require.

Let's suppose we go from year 1--because this doesn't go into effect until 2006, so we are not quite sure how it is all going to work, but suppose we go from year 1 to year 3. I could not get everything on the chart, so we will skip 2007; we will go to 2008. These private plans are new. They have not refined all their business models. We know when the State of Nevada tried something similar, drug companies said: Wait a minute, there is no money in this for me. I don't want to provide drugs to the sickest, oldest people in America. I can't make anything on that. So they dropped out.

I think it is fair to assume that at the end of those first 2 years when a plan's contract expires, it may decide to drop out, just as Medicare HMOs have dropped out. As I am sure all of us have heard from our constituents, the number of Medicare+Choice plans has decreased by over half in the last 5 years, leaving thousands of seniors in the lurch when they pull out of the markets where the seniors live.

Those who did not pull out, they stayed but at a huge increase in price. They cut back benefits and raised premiums--15.5 percent last year alone. So all of a sudden, now, we have what used to be a $32 plan being a $47 plan. This is a monthly premium.

Let's say our senior waited it out, finally got the prescription drug she needed through a grievance hearing, but then after 2 years the plan she was in with the drug she needed did not find the market profitable and chose to pull out. The Government would have to be sure there was a Federal fallback in place, so our senior might then go into the Federal fallback. The Federal fallback would guarantee, for a limited period of time, that the senior would get the drug and the doctor of her choice. But this would only be for a limited time, only until this new Government agency could negotiate with private plans--and they can potentially subsidize up to 99.9 percent of their risks--in order to get two plans back into the marketplace.

Our senior would then have a plan at a higher price, with the Government basically subsidizing--some might argue, bribing--the private plan to come back into the marketplace. But by year 4, our senior might again have to change plans for the very same reasons, about coverage, including doctors, including drugs, and as you can tell, this is the most streamlined version I could put on one chart of what it is we are debating.

I think it is important to recognize that this new Government agency is giving a huge gift in a subsidy to these private plans, but it is giving another very large gift because it is basically saying you come into our plan and we will waive all State insurance regulation.

I don't know about you, but people who have dealt with insurance companies of all kinds sometimes have problems with them, and they go to their State insurance commissioner who is close to the problem, and they try to get it worked out and get some support. That will be gone. You will not have the right to go to your State insurance commissioner because this new Government agency up here will have said: All bets are off. We beg you to come into the market. We will pay you to come into the market. And guess what the sweetener is. We are not going to hold you to any of the regulations with which you would otherwise have to comply.

Last year, we passed in this body a prescription drug benefit known as Graham-Miller. It was simple, had the same premiums, deductibles, and copays, and there were no dropoffs. It was over 50 percent more generous than the bill before us today.

I know many of my colleagues prefer this Medicaid maze because they are such strong supporters of competition. So am I. Goodness gracious, competition, the free market, we all know that is one of the pillars of American success.

But I don't champion competition for the sake of championing it when it comes to health care and when it comes to the elderly and the frail and people who use the bulk of prescription drugs in our country. I champion it when it actually produces a good result.

Competition on a skewed playing field that excludes certain plans from staying in the market and creates inefficient administrative and transaction costs could actually leave customers less informed, less well off, and spend these scarce health care dollars on creating a new bureaucracy whose primary purpose is to somehow subsidize insurance companies.

I think drug plans should not compete for profits by attracting only the healthiest of people and dumping seniors they consider bad risks. They should not compete by cutting corners in quality. They should compete with each other on quality and price. Of course, the way to do that is to set some uniform benefit package to try to have a uniform premium so you can compare apples to apples and not apples to oranges to kumquats or bananas or whatever else is in the fruit basket. The Senate bill has taken some steps to try to rationalize its system. The House of Representatives' bill lacks even the basic protection for seniors. It lacks what we call a Federal fallback; that is, when your HMOs or PPOs or drug insurance programs pull out on you and don't give you the drug you need or won't let you see your doctors, then you can go into what is called the Federal fallback. The House doesn't even have that. They somehow magically assume--although we have seen no evidence of it and it defies common sense--that there are going to be all of these drug companies and all of these insurance plans competing to take care of that elderly woman or that elderly man with all of these drug costs.

As I mentioned, New York State has 219,000 low-income seniors who qualify for both Medicare and Medicaid. They are excluded. I fear they are being put at risk because they are going to have to rely on State programs in these times of big budget problems.

There are also some other people I worry about when I look at this Medicaid maze. For example, retirees who bargain for and obtain health care benefits for their retirement. The Congressional Budget Office says a third of Medicare retirees with drug benefits would lose coverage under this bill. In our State, that is 365,000 people.

Then we have another. New York has put into place its own prescription drug plan to help people who have incomes up to $50,000. If you go to New

York and you have friends or families in New York, you know we have a higher cost of living. In our State, middle-class people with big drug costs pay for those costs. There are 317,000 who are enrolled in the State's EPIC prescription drug program, and nearly 900,000 are excluded because they are in nursing homes or they have disabilities and under the calculations may have their retiree benefits put at risk, or who are going to have their State prescription guarantee also put at risk-- one in three Medicare recipients in New York. Never in the history of the Medicare program has a Medicare beneficiary been denied access to a covered benefit. I am just so troubled that we are excluding our lowest income seniors. I don't know how we justify that.

I have a letter from our Republican Governor which I ask unanimous consent to have printed in the Record.

Mr. President, Governor Pataki has written to ask that in this plan Medicare cover the drug costs of these seniors and New Yorkers with disabilities. The Governor's record explains the importance of including these people who are called, in the jargon, ``low-income dual eligibles.''

Furthermore, I believe we should eliminate the penalty against retirees. By refusing to count retiree benefits as out-of-pocket expenses, this bill assures that 365,000 New Yorkers will never make it through the coverage gap. We should also try to support States such as New York that are putting their own money into programs to provide for continuing coverage.

The gap in coverage is very disconcerting. I don't even really get to that on this Medicaid maze.

I think it is important to recognize there is on average a $275 deductible and at least a $35 monthly premium that could certainly vary widely. As we have seen in these examples, depending upon where you live, and depending upon who is available, there is a 50-percent subsidy until your costs are $4,500. And then you go cold turkey. Some people call that a doughnut hole. That is not my image. There is a brick wall which you run into. Spend your money, and after that you get no help--none at all--until you get to what is called the catastrophic threshold of $5,813 in drug costs.

Many of us have heard from our constituents. In fact, we are deluged in my office with phone calls, e-mails, and other contacts from people asking, How is this going to affect me? What does this mean in my life? I think that is the real question. How do I get prescription drugs under this plan?

I want to talk about this one story, a woman named Arlene Francis. She lives in the Buffalo area. She was married to a Bethlehem Steel retiree who passed away. At one time, she had the retiree drug coverage that was part of her husband's contract with Bethlehem Steel. As we know, Bethlehem Steel went into bankruptcy and was bought by another company. All retirees and spouses of retirees lost their coverage.

Arlene takes Fosamax, a drug for osteoarthritis, which costs $68 a month. She has a hormone replacement patch. She takes antibiotics as needed. She is pretty healthy, when you think about it. That is not a lot for someone to be paying for prescription drugs and getting the coverage she needed. But it is a stretch for her because she has a very limited fixed income. Her drug costs total $998 a year. She relies on our New York program called EPIC, which covers seniors on a sliding scale up to $35,000 for singles, such as Arlene, who is a widow, and $50,000 for a couple. Under EPIC, her annual fee is $36 a year. Her copays are $3. Her share of her yearly $998 drug expense totals $336-- roughly a third of what the cost would be.

But what happens under this proposal is very troubling to me. She would pay monthly premiums every month. Let us say we get it at the lowest level of $35 a month. That is $420 a year. She would pay a $276 deductible and a 50-percent copay. How much would she pay to get $998 in drugs? She would pay $1,157.

Arlene and many of my constituents aren't going to get anything from this bill. It is voluntary. You argue they don't have to go into it. But we are changing the incentive and the structure of delivering drug coverage for many people in a State such as ours which already tries to help people, which I believe will lead to the limitation or the elimination of the program we already have. Under this program, the Federal Government isn't lifting the States' costly burden of prescription drugs. It even adds some administrative costs on the State Medicaid offices that have to do all of these calculations.

Because a State will not receive reimbursement from the Medicare program for the benefits it provides up to the Medicare level, it very well could make a rational decision that it is just not going to continue doing that, and either cut back or end the program, which will be very bad news for the 360,000 seniors in our State, like Arlene, who rely on this very cost-effective way of getting their drugs covered.

When we have the Congressional Budget Office stating that seniors with prescription drug costs of $1,115 or less would end up paying more through premiums, deductibles, and cost sharing, they are not getting anything from this bill.

On the other end of the income and expenditure level, the bill falls short for patients with high drug costs as well. Even seniors who spend $5,000 will get only $1,700 in benefits. They have to manage 66 percent of the costs on their own.

I think we could do more to eliminate the gaps in coverage and to tear down the brick wall that stops people from getting help while they still pay for it until they reach the catastrophic level.

I will be introducing a series of amendments. But I think it is important to recognize the fundamental issues I am raising today about the Medicare maze are going to require all of us to work on it.

I am very pleased that one of the most important ways we can assure that competition is helpful instead of harmful is to ensure the plans actually do compete on quality.

So I appreciate that the bill includes a measure I have supported, along with Senator Hatch and others, to commission the Institute of Medicine to develop ways to think about paying for

quality outcomes. I have also filed an amendment to encourage the development of quality standards so that our seniors have some basis of comparison to choose among different plans.

I believe it is important to provide information about the efficacy of drugs and their cost-effectiveness so that seniors and others can see for themselves whether we are getting our money's worth for this $400 billion investment. I would like that information on the Internet. I would like it made available through the long-term ombudsmen, the Medicare and Medicaid representatives in every State.

I started by saying I think this legislation does hold tremendous promise. But I have tried to outline some--not all but some--of the questions I am having to answer from my constituents who come to me with very specific issues, who ask me how this will affect their lives, whether this will make them better off or worse off financially.

I believe it is important for us to be able to really scrub this, understand what it does and what it does not do, and also recognize that on the other end of this Capitol the House has a very different approach. I applaud the work Senators Grassley and Baucus have done. But let's not forget, this body tried to protect lower income working families by giving them the child tax credit--people who pay a higher proportion of their income in taxes than I do, but who were told, at the other end of this building, that because they may not pay income tax, they should not get help for their children.

I have to ask, if that is the attitude on the other end of this building, if they have already passed a bill that is not going to help many seniors but provides even more of a giveaway to drug companies to try to get them to offer these plans, how can we trust, at the end of the day, that the more thoughtful debate and version we are working on here in the Senate will be what comes out of this process?

I was very disappointed when it was reported in the papers today that the President has weighed in on the side of giving subsidies, increasing benefits to insurance companies--not in the Senate version, but in the House version--and that the President does not want a Federal fallback. This is a huge difference in philosophy, in ideology, and, I believe, in life experience.

Medicare has worked. Since 1965, it has removed not only so much of the concern and worry and anxiety about growing older, of facing acute and chronic health care problems, it has removed a lot of burden from the American family.

My mother just recently turned 84, and I feel very fortunate that I am in a position to be able to help her. But I know, very well, that a lot of other families trying to save for tuition, for college for their kids, trying to make ends meet, when it comes to mortgages and car payments, they may not be in that position. Therefore, they look to Medicare to really help spread the burden of taking care of our elderly from one generation to the next. It is part of our social contract in America. We have a basic bargain: If you work hard, if you are responsible, we are going to help, through our Government, to make sure you do not fall into poverty, that you are not left without health care. We are going to do that because that is the kind of people we are. Those are the values we have. This could be a giant step back from that commitment.

Let's not also forget that this $400 billion, which we are trying to set aside, comes at a time when we are looking at deficits and increasing debt, which will impose even more burdens in the future on middle-class Americans and their families. So I hope we are able to answer the questions and, most fundamentally, explain clearly and unequivocally how someone gets their prescription drug benefits.

I do not know that I could take this chart to a senior center, to a nursing home, and explain this. I do not understand why it has to be so complicated, why we have to create a new Government agency, why we have to waive insurance regulations, why we have to cause this level of confusion and uncertainty among people who should have the peace of mind in their later years that they do not have to worry about filing grievances, fighting for their drugs and their doctors. Why are we doing this? Why are we creating these obstacles, this Rube Goldberg system that is going to be extremely hard to explain and very hard to understand?

Finally, I do not understand, either, why we are waiting until 2006. Medicare went into effect within a year--a totally new system, with no new agency to administer it. We were able to do it in a year. President Johnson went to Independence, MO, and signed that bill with former President Harry Truman, who had been one of the first of our leaders to say: We need to take care of our seniors.

That bill was signed, it has worked well, and it has a very low administrative cost. Two to three cents out of your tax dollars, your contributions that go into Medicare, go into administration, go into any kind of costs that can be compared to the high percentage that these private insurance companies spend. Some of them spend 30 to 40 cents out of your dollar, not on taking care of you but on taking care of themselves.

So at the end of the day, Medicare has worked. I am very proud of our country for making that commitment. Yet I worry that what we are about to do is not only difficult to understand, difficult to administer, and confusing but may very well be the beginning of undoing traditional Medicare.

The report of the President's letter today certainly gives me pause that we would not even have a Federal fallback. Our people who live in rural States, live in poor urban areas--who are not the most attractive clients for insurance companies because--guess what--they get sicker, they are poorer--where will they get their care if our Government does not have that fallback to provide the safety net?

And what do we do as States are making these budget cuts to take care of the hundreds of thousands of our poor residents in nursing homes, our people with disabilities, who depend upon this program?

We cannot forget about the larger issue at hand. Our fundamental responsibility and our goal must be, as a nation, to help our seniors by providing a prescription drug benefit that is reliable and comprehensive. And if we are to go down the route of introducing competition, then let's make sure it is competition on cost and quality, not competition to eliminate more and more of the sickest of our elderly or the people with disabilities whom we are trying so hard to take care of.

Our goal is not just choice or competition, it is compassion; it is coverage for those who need it. We have a rare bipartisan opportunity to do this. Let's get it right in the Senate, and then let's fight with all of our energy to make sure it is not changed in a conference committee with the House, so that we can, in good conscience, tell our seniors we have done the best we can to make sure they get the benefit we promised.

Thank you, Mr. President. I yield the floor.

Mr. President, I send an amendment to the desk.

Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. President, I thank the distinguished ranking member and congratulate both him and Senator Grassley on what is obviously an extraordinarily important, complicated, and difficult road--to try to move toward prescription drug coverage for seniors in America. I wish to share a few words, if I may, at the outset, before moving specifically to the amendment, and to talk generally about the bill itself.

Obviously, all across our country we have accomplished an extraordinary service for seniors through what we have achieved through Medicare. It is one of the great social programs of the United States of America. I can remember years ago a shared responsibility by Republicans and Democrats alike. I think it was President Nixon who signed the enormous proportion of it into law in the beginning of the 1970s. We lifted a great many seniors in this country out of poverty as a consequence. It has benefited millions of Americans who would otherwise go without quality health care and otherwise either be forced into poverty or remain in poverty. The face of poverty in the United States of America changed because of this program.

I might add that it is a Government program. Often, the Government comes under great criticism. But the truth is that this is a program that has worked, a program that has made a difference in the lives of our fellow Americans, and a program that a large proportion of America appreciates, respects, and doesn't want to see destroyed. I think we have a duty to try to strengthen and improve the program by adding a comprehensive, affordable, and guaranteed prescription drug benefit to Medicare.

Notwithstanding the very best efforts of the chairman and ranking member and others on the committee on which I serve, there are still questions as to whether this in fact does that at this point in time.

That doesn't mean it isn't perhaps for some people worth voting for. I haven't made a final decision with respect to final passage. That may depend somewhat on what we achieve over the course of these days. But we need to put to the test the question of what we are doing versus what we could do. This is a fair standard for us to try to measure.

My concern today is that the underlying bill as currently drafted is a good start, it is a good foundation, but it doesn't fulfill the full measure of the promise of comprehensive, affordable, and guaranteed in ways in which I think we could do it. Our Nation's seniors, I fear, will experience a very severe case of sticker shock when they learn how far the bill falls below their expectations for relief.

Also, I wish we did not have to wait until 2006. I have serious questions about why, given it took us only 11 months to set up Medicare itself, it takes us 2\1/2\ years to set up the Medicare drug benefit. Frankly, it is beyond my acceptance of what is a legitimate reason. I know the reasons. I have heard the reasons. But think about that: We set up the entire Medicare Program in about 11 months, and now we are told to add a benefit within it, we ought to wait about 2\1/2\ years. I think it has far more to do about budgets and far more to do about elections than it does with the realities of what we need to do.

Seniors, obviously, need this relief. Nearly 40 percent of Medicare beneficiaries report having no--zero--prescription drug coverage. And the average amount they pay out of their own pocket for prescription drugs has increased from $644 in the year 2000 to $996 in 2003. These expenses are projected to grow to $1,147 in 2004 and $1,454 by 2006, which is the year when the benefit actually gets implemented. So we are talking about a much larger bill than we have today.

People who are measuring this bill by what we have today are actually measuring it short of what the need is because the need is going to be the year

of implementation, 2006, and then we will have more than doubled the amount that individuals are paying for prescription drugs. That means the average annual out-of-pocket spending by seniors for prescription drugs will have doubled over that period. And I think seniors are to going to question: Well, if they all knew that, why am I still having such a hard time paying for prescription drugs?

Now, again, I want to underscore, I know how hard it is for the chairman and Senator Baucus to try to do this. And the reason it is so hard is because we have been given an arbitrary number. And I will say something more about that in a minute.

Let me say, for a moment, what I think is good that we have accomplished. No. 1, we have rejected President Bush's efforts to force seniors into private plans. We have rejected the President's plan to disadvantage seniors who want to stay in traditional Medicare and to keep the same doctors they have now. We have rejected the President's plan to give a windfall of incentives to PPOs to encourage their participation in the program. And we have adopted certain longstanding Democratic principles that include significant cost-sharing protections for low-income beneficiaries, a guaranteed fallback plan, and some key efforts that are targeted at improving the traditional fee-for-service benefits under Medicare.

But there are concerns I expressed in my ``no'' vote in the Finance Committee, and I want to express those concerns now on the Senate floor.

First of all, there are crucial areas I would hope we would try to find a way to improve. The most important of those is this gap in the coverage, in the donut hole as it is called, where seniors are charged a premium, but they do not get anything for the premium.

It seems to me there ought to be adequate protection to ensure, also, that employer coverage is not substituted or dropped. We do not want to create a situation where employers are covering people today, but because you have a fallback situation, they may decide, OK, we are going to drop that coverage, and, in fact, people are downgraded in what is available to them because there are not enough private people coming in to make up for that; therefore, the fallback is what they get. In addition, we must improve the stability of the fallback plans to minimize confusion and inconvenience to seniors.

Finally, I think we have to protect lowest income seniors by making sure they, too, can get the Medicare benefit. We ought to guarantee--or do our best to guarantee--a uniform national premium, somehow, for that benefit, and try to eliminate the new increases in beneficiary cost sharing under traditional Medicare and be more aggressive about providing additional benefits under the program.

But the stark reality is, all of these constraints are not the fault of Senator Baucus or Senator Grassley. There is a reason we are operating under this straitjacket where we have had to tell a bunch of seniors they are going to pay a premium, they can buy insurance, they get to buy insurance up to $3,000--whatever it is--$4,500, and then they stop, but they continue to pay premiums. They continue to pay, but they are not going to get any benefit. They have to go back and start paying their full premium. But then when they get up to the $5,800 of catastrophic level, it begins to cut back in.

The reason we are there is fundamentally that $400 billion is all the Congress was given to deal with this--the arbitrary: Let's pick a number. Here is what we will put into prescription drugs.

I think every American has a right to ask--and they will ask over the course of the next years--why they were limited to $400 billion when the U.S. Congress chose to take $3 trillion off the table in tax cuts that went to upper income Americans over the course of the last 2 years.

Now, that is a fair question. That is the choice in America today. We make choices. People sent us here to make choices. And the choice made on behalf of the American people is that it is more important to reward people earning $315,000 a year than to make certain a lot of seniors don't have a donut hole in their coverage in prescription drugs.

When I heard Senator Craig Thomas a moment ago say not that many seniors are going to be left out, I said, well, that is interesting because in the next breath he said we can't afford it because it is going to cost $200 billion. Well, if it costs $200 billion, it sounds to me as if somebody is being left out to a pretty large amount of money.

You cannot have it both ways. If it is expensive, it means it is meaningful to a lot of people. And if it is meaningful to a lot of people, we ought to be thinking about why we are not doing it.

Warren Buffett--the second richest man in the United States of America--wrote a letter a couple weeks ago where he said: Well, I own my own company. And now that I own my own company, and I've been given this very nice dividend benefit by the Republicans, I can pay myself $1 billion. And when I pay myself $1 billion, I'm not going to have tax, in this first year, on $365 million of it. It's tax free. That's it. He said he thought it would have been better to give 365,000 families in America $1,000 each. He did not think he ought to get that benefit.

Now, I think it is going to be fair for a lot of seniors in this country to ask the question, as we go forward, why Warren Buffett thinks that, and a whole bunch of people here think it is OK to do something else.

So if we are going to offer a prescription drug benefit that stands the test of time, the test of coverage, the test of fairness, and ultimately the test of the compact that Medicare created with our seniors, I think we ought to try to eliminate the coverage gap in this bill.

I think it is hard to turn to a senior at some point in time and say: Look, we want to help you buy drugs, but we are only going to help you up to the point where it gets really expensive. Then, when it gets really expensive, you are going to have to start carrying the bigger weight until it gets really, really expensive, and then we will come back and help you. It seems to me a lot of seniors are going to be asking questions about that choice.

I think we also could do better in protecting seniors with retiree coverage. The current bill contains a flawed definition for the true out-of-pocket costs by prohibiting any drug spending payments made on behalf of Medicare beneficiaries by an employer-sponsored plan from counting toward the stop-loss threshold.

In other words, they have an employer. That employer has given them a plan as a retiree, and they retire. They are qualified for Medicare. They paid into their retiree plan. It is their deal. But that is not now going to count toward their out-of-pocket expense. So they could, in fact, be left without the coverage that they deserve as a consequence of this definition. And that means that retirees covered under employer-sponsored plans will likely never reach the stop-loss threshold, and they will effectively be denied benefits under the catastrophic portion of the Medicare plan, even though they qualify for Medicare and worked just like everybody else for retirement and put money into the system.

Seniors who have retiree prescription drug coverage from their former employer worked a lifetime. They made wage concessions over the years, with the expectation they were going to receive those benefits. This bill comes along and, in effect, denies them benefits and treats them unequally in the context of the Medicare plan. It is unfair to change those rules after the fact. We ought to try to change it and reward employers who do the right thing and provide retiree coverage for their employees.

We also ought to try to strengthen the guarantee of a fallback plan and provide seniors with more stability and less confusion. Under the current bill, when a fallback program is available, it may not be available for very long. Medicare beneficiaries who are in the fallback program and like it will have to leave that program if two private insurers decide later to serve their region. In other words, the bill says there is only a fallback if you don't have two providers. But the minute you have two providers in a region, people who may have gone into the fallback program will have to turn around and leave the fallback program because there are now two providers, even if the two providers are providing more expensive premiums than they had in

the fallback. So they will be forced out of their fallback into a more expensive plan which a lot of seniors are going to find both oppressive as well as very confusing to them as to why they have to do that.

Some people are going to argue there is another area of concern. That is how we treat low-income seniors in this bill. These are our most vulnerable and poorest seniors. They are eligible for both Medicare and Medicaid. But under the bill, they are going to get their benefit from the Medicaid Program. They won't be allowed to go into the Medicare Program because they are poor.

Some people are going to come to the floor and say: Wait a minute, a lot of States offer a better benefit in Medicaid. It is true. Some do. But we are not offering them an option. We are telling them they have to get it from Medicaid. And the problem is a whole bunch of States have a very limited Medicaid drug benefit. For instance, in the State of Texas, the benefit covers only three prescriptions. That is not a lot of protection. So we are forcing people into Medicaid in a State where, because they are poor, they have to take Medicaid, and they may only have three prescriptions available to them in the whole program. We are asking for trouble if that stays the way it is.

Moreover, we all know a lot of States are facing the worst deficits in a generation. That means States are beginning to cut back their benefits. There isn't one of us who hasn't seen a State where a Governor is forced to start to clip back on Medicaid. That means we are going to see higher copayments. We will have tighter formularies, more bureaucracy, and we will not necessarily be achieving the goal we are seeking.

Requiring low-income seniors to stay in a Medicaid prescription program is a bad deal for seniors because of the States that provide an inferior prescription drug benefit in Medicaid. We are now essentially creating the very thing we have always tried not to do. We are creating a second-class tier of citizens based on their income within the Medicare Program. We will for the first time say to seniors who paid into Medicare through a lifetime that just because now in their old age, because of their low income, they are going to have to accept a lesser benefit. That is wrong. For the first time in the history of the Medicare Program, seniors will be denied a benefit simply because of their income. It is a terrible precedent. It strains the social compact that was the foundation of Medicare in the first place.

Another concern in the underlying bill is the lack of the guaranteed premium or uniformity of it. Under this legislation, insurance companies providing the new drug benefit have the freedom to design their prescription drug plan. That is great. I am for the marketplace. I am all for companies offering a private prescription plan to the degree they want to or choose to or can. They can decide what premiums and copayments they want to charge. But the point is, under Medicare, we have always decided there was a fundamental compact with seniors for which they could pay and which ought to have some uniformity of treatment in essence. What we are doing now is throwing that whole sense of the system into the competitive structure of sometimes very limited choices which may ratchet up prices in a way that is going to become very complicated for a lot of Senators and Congressmen to explain to seniors who are used to the Medicare plan being something different in the context of the compact.

The bill promises an ``average premium'' of about $35 per month. But premiums are obviously going to vary from region to region in the country which means some seniors may pay $39 a month in Alabama, maybe $40 a month in Tennessee, but be charged $160 in New York. I believe we have to be very sensitive and thoughtful about what happens to people on fixed incomes. This is not your average marketplace. This is not a place where people even have the same set of choices.

When a senior on a fixed income winds up with high blood pressure, diabetes, perhaps prostate cancer or a mastectomy, any number of different problems that seniors cope with, they are forced into an economic status, not choosing to get into one. The question is whether we are going to do our best to try to protect them from that kind of volatility.

It is estimated in the first year of the program, approximately 35 percent of the Part D beneficiaries are going to pay more in premiums and out-of-pocket cost sharing than they will save from the new drug benefit; 35 percent will pay more than they are going to save from the new benefit. And to add insult to injury in that context, the bill doesn't just fail to provide an affordable, comprehensive drug benefit, but it also increases cost sharing for other Medicare benefits.

In that context, there are two troublesome cost-sharing requirements. It increases the Medicare Part B deductible from $100 to $125. And then it indexes it by inflation and permits a new coinsurance for clinical laboratory services. That means Medicare beneficiaries will be asked to carry the burden of an additional $24 billion in new cost-sharing requirements over the next 10 years. Wait until your grandmother finds out about that one.

For all of my concerns, we have certainly come closer than we have been at any time in recent years to trying to achieve the great goal of putting prescription drugs into some kind of Medicare benefit. I believe with additional persistence, with additional negotiations between us and the administration, we could make those concerns I just expressed go away or we could mitigate them. We could diminish them. I intend to support a number of amendments on the floor seeking to do that.

I have an amendment I have just called up that seeks to do one part of that. Let me explain it very quickly. I want to talk about an amendment I have and I will get to the one I just called up in a moment.

We have talked for a long time in the Senate about mental health parity. It is a goal we really want to achieve in this country. Senator Domenici has been a champion for it. There have been bipartisan efforts to try to get there. I would like to see us end the discriminatory practice of charging seniors in Medicare a 50 percent copay for mental health services, when we only charge a 20 percent copay for the other physician services. Too many seniors have mental illnesses that go untreated, and we should try not to make that worse by making it harder for people to be able to get the care.

I have an amendment to bring parity for mental health services for seniors. I am also working with Senator Sununu to try to improve the Medicare benefit by adding vision rehabilitation services to the list of covered services.

I am also pleased to join with Senator Hutchison and Senator Kennedy as a lead cosponsor of an amendment to increase the Medicare indirect medical education--so-called IME--payments for teaching hospitals. I appreciate very much the efforts of Senator Baucus and Senator Grassley to try to accommodate us to find a way to deal with this issue. It is a critical issue. Teaching hospitals incur a different set of costs, and you cannot measure the Medicare reimbursement against the expenses of the hospital in the same way.

Fifty percent of the doctors in Montana were taught at hospitals in, I think, 11 or 12 States, including Massachusetts, New York, California, and a few others in the country. So 11 or 12 States are spending money in their teaching hospitals to provide the benefit to the rest of the country of that quality medical education. When 50 percent of the doctors in Montana were educated in 11 or 12 States, Montana has a benefit, but it is not measured in the Medicare reimbursement. We need to make up that difference so we can continue to have the quality medical instruction and education in our country from which every American benefits.

In the spirit of improving this legislation, the amendment I offer today, which has bipartisan support, would dramatically improve the bill for some of the things I said I think are problems. It does it for very little money.

My amendment will help seniors who are in the coverage gap. What it does, it doesn't fill the whole ``donut,'' but it will offer significant help to seniors who fall into the donut by expanding access to the existing prescription drug safety net.

The Federal Government currently sponsors a discount prescription drug program for those qualifying entities, such as a community health center or

a public hospital or the Ryan White grantees, and others. Under this program, which is known as the 340(b) covered entities program, they have access to discounted prescription drug pricing for their patients in the program. In other words, if you have a community health center and your community health center has an in-house pharmacy, they could fill the prescriptions for seniors at discounted rates. They are allowed to do it. We have already had that under law. The problem is, we know a whole bunch of community centers and public health hospitals don't have the in-house pharmacies.

The benefit of this is to provide drugs that are significantly lower than the retail and wholesale prices. Based on a recent analysis of 200 very popular drugs, under 340(b) prices, on average, those drugs were 54 percent lower than the average wholesale price. Another recent survey showed that 340(b) prices were 24 percent lower than those available to groups purchasing as group organizations. So it is a sound program, but it is underutilized. Not all health centers and hospitals have an in-house pharmacy.

One of the biggest barriers to participating in 340(b) for many of the qualifying entities is the very expensive upfront capital cost of putting in place a pharmacy in their facility. So what I would do is establish a $300 million grant fund from the prescription drug trust fund created under the bill for HHS to award grants to health centers, hospitals, and other qualifying 340(b) institutions to help them with the startup costs associated with establishing a pharmacy in their entity. CBO scoring of this bill showed there is about a $10 billion surplus available in the current scoring, and so we have come in under the $400 billion. We have some cushion here. If we took that $300 million and made it available to these in-house entities to create those discount drug centers, then we could have those people who fall into the donut hole go to those centers, get the discount drugs, and significantly reduce the impact of the donut, which I think is a worthwhile effort.

We estimate there are up to 2,000 organizations in communities all across the country who would be assisted to set up in-house pharmacies as a result of this amendment. That will mean seniors all across the country who find themselves in the coverage gap will be able to purchase their prescription drugs for as much as 50 percent below the wholesale price. That savings is very significant in the context of what we are facing here.

My amendment is endorsed by the National Association of Community Health Centers, the National Association of Public Hospitals, and the Public Hospital Pharmacy Coalition. I hope it can earn the support of my colleagues so we can address one of the unintended consequences of dealing with only a $400 billion benefit, such as we are today.

I thank my colleagues for the opportunity to share these thoughts with them. I hope we can pass this amendment or have it accepted at the appropriate time.

I yield the floor and suggest the absence of a quorum.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I wanted to come to the floor and offer some comments about the Medicare prescription drug bill. I wanted to give my accolades to the chairman and ranking member of the Finance Committee for how they have so expertly crafted a bill in a bipartisan fashion which is how this body ought to be operated, and so often we are operating exactly the opposite way. There are just too many partisan votes around here. They have shown, Senators Grassley and Baucus, that the spirit of bipartisanship in fact does live and that good work products can be accomplished.

Antispam Legislation

Before I make my remarks on the legislation, I want to recall to mind another bipartisan work product that was produced out of the Commerce Committee yesterday and will be coming to the floor. It is the antispam legislation. I have reserved for the floor to offer a major amendment to it. It is very possible that we will work out and the prime sponsors of the bill will accept my amendment, but it has to do with the question of spam, which is all of that unwanted e-mail everybody gets on their computer.

I was just absolutely dumbfounded; One day I went in my Tampa office and I said: How about printing out for me the e-mail we received today, just one day. And they produced a full letter-sized sheet, single spaced, of e-mail that we did not want, that had come anyway. Of those e-mail messages, two of them were pornographic which, if that is happening in the office of a Senator, you can imagine what is happening all across the country. That is exactly what is happening.

People are fed up. They want the Federal Government to do something about it. Fortunately, we have finally gotten the political will now that we are going to do something about it.

I bring this up not only as an example of bipartisanship reflecting what Senator Baucus has done with this masterful crafting of a legislative package, but I wanted to alert the Senate to the fact that the antispam bill is going to come. I am going to have an amendment that will improve it.

In the bill the only penalty is a misdemeanor. What I want to do is to strengthen that penalty and to give the prosecutors the tools so that the violation of sending unwanted and undisclosed in its address e-mail becomes an element that will trigger the Racketeer Influenced Corrupt Organization act, RICO.

What that does is give prosecutors the tools to go after the criminal enterprise and then take their assets. Let me tell you what is in this morning's paper. Here is a good example of an e-mail scam that used a retailing giant's name in an attempt to capture credit card numbers and other personal data on a nationwide basis. They sent out millions of these e-mails. What they did is, they took a retailer, Best Buy, and they sent a message that said they wanted to offer something on Best Buy. Of course, it was all fraudulent. It was claiming to be Best Buy's fraud department. They said they were informing people their credit card number had supposedly been used in a suspicious purchase through Best Buy dot com. And then it instructed the card holders to go to a special Web link to help resolve the problem.

Then when those Best Buy customers went to that Web link, they offered their credit card number and then ``Katie bar the door.''

Here is obviously a deceptive scheme, taking the advantage of a legitimate business, using a deceptive message in order to obtain credit card numbers which they then will use fraudulently to bilk people of millions of dollars. And because they send out hundreds of millions of these e-mail messages, it is time for us to get serious and not just come in with an antispam bill that is going to spank people on the hand with a misdemeanor but is going to go after the assets of the criminal enterprise under the RICO Act.

I bring this to the attention of the Senate. That debate will be coming up hopefully fairly quickly. I must say, ever since I happened to talk about this down in Tampa that day I just checked my e-mail in the Tampa office, I have gotten so many calls and letters to say: Right on, Bill, right on.

We can't even use our computer and our e-mail anymore, because we are so cluttered up with e-mail. It is time for the Federal Government to do something about it.

We have a crime against mail fraud. The Presiding Officer, as a former U.S. Attorney, knows all about prosecuting mail fraud. If you did that kind of scheme I just showed you in today's Orlando Sentinel, and instead you used the mails and you sent out 100 letters like this same thing, posing as a department store, saying we have reason to think your credit card has been stolen, give us your card number so we can correct this--of course, it is a deceptive scheme; it gets your credit card number so they can charge--you would prosecute under the mail fraud statute. But that is sending out a hundred letters--my goodness gracious--through e-mail--snap, just like that, 175 million e- mail messages. Think how many people are going to bite and how many credit card numbers are going to be stolen--just in this particular case.

That is why we have to give them strong penalties in the bill that is going to be considered by the Senate. That is why we have to be able to hook it as one of the elements that triggers the RICO Act--the Racketeer Influenced and Corrupt Organization Act--so that the prosecutors can go after the assets of the organized criminal thug ring.

Prescription Drugs

Mr. President, I came to talk today about this prescription drug bill. I certainly support this bill, and I am going to vote for it. I commend the chairman and the ranking member for how they have crafted this legislation. I commend the Finance Committee for how it has put it together. If I had my druthers, we would have passed those amendments that we would have had in the last few days that we didn't pass because, clearly, giving an option for seniors to go directly through Medicare for a prescription drug benefit is, in my opinion, keeping faith with the seniors. So many of us have already suggested that we wanted to modernize Medicare from a 1965 health insurance system funded by the Federal Government for senior citizens-- modernize that to the year 2003.

If you were writing Medicare today instead of in 1965, 38 years ago, would you include a prescription drug benefit? Of course you would because the miracles of modern medicine, the miracles of prescription drugs so often today will take care of the ailments and the chronic problems; so that when the Medicare system was set up in 1965--38 years ago--the state of the art of medical care was centered around a hospital and doctors. But hospitals and doctors have new tools today. Some of those tools, by the way, that I will share with you sometimes come directly out of America's space program. They are the spinoffs of technology. Some of them have come out of the State of the Presiding Officer at the Marshall Space Flight Center. I am telling you, there is some miracle equipment that has come out of the space program.

Part of the miracle of modern health care is prescription drugs. For that, I give great commendation to NIH, to our universities, and all the research institutions, and to the research departments of the pharmaceutical companies that are producing these new wonder drugs of today. But we ought to be modernizing Medicare with a prescription drug benefit that is a part of Medicare. The problem is, we cannot get the votes to do that.

So what the Finance Committee has done is fashion a plan whereby you can offer in the private sector, through a preferred provider organization--a PPO is a managed care kind of concept--and they will provide it or the senior citizen can go and get two separate drug

plans and directly there. But if they fail, there is a backup of the Federal Government doing its own prescription drug plan, according to the elements in the outline of what they have done in the legislation.

I would prefer it if a senior citizen could, in fact, go to the private sector or have the choice of getting their prescription drugs directly from Medicare. That would be the senior citizen's choice. But we could not get the votes for that amendment.

So we are proceeding on with the bill, and I am certainly going to support the bill because it is a major first step along the way to providing prescription drugs for senior citizens. We need to keep faith with those seniors. This is what a lot of us have talked about and said we wanted to do, and this is a first major step to do it. Since the Senator from Montana has come back in, I have been commending him on this package saying that I wish we had adopted a couple of the amendments that were offered over the last couple of days, but that I support the package. I commend him. This is a major first step on the road to keeping faith with our seniors. I appreciate what he has done.

I would like to take a few moments to critique some parts of the bill.

Mr. President, I think the Senator from Montana is ``Merlin the Magician'' to finally be able to craft a package that will get through in a bipartisan fashion with a huge number of votes in this Chamber. And I think if it is appropriate with the ranking member--and I believe parliamentary-wise, it is appropriate--I will lay down a couple of amendments now that can be taken up at a separate time, and then I will discuss them.

Mr. President, I send to the desk amendment No. 938.

I ask unanimous consent that further reading of the amendment be dispensed with.

Mr. President, I send another amendment to the desk.

Mr. President, I will tell you just very briefly about these amendments, and I want to make comments basically on the underlying bill. I think these amendments are such that it is my understanding that they may be accepted--perhaps even in a managers package. But one of them involves extending the Federal role in the end stage renal disease demonstration project, which is a project that we have in Florida. I will speak about it later. It will stand on its merit.

The other is amendment No. 938 to require a GAO study to examine the extent of how concierge care has been expanded in the country and what we need to do about it. I am working with Senator Breaux on this particular amendment.

What is happening is we have a Federal health insurance system for senior citizens that is available to all senior citizens if they qualify on the age. Lo and behold, a practice is arising around the country where some physicians are saying: I will no longer serve you unless you pay me a dollar amount per patient per year--in the case of some physicians in Florida, $1,500 per year. At the same time they are cutting the number of patients they see, they are saying: For this $1,500 entrance fee that you pay, we are going to give you specialized treatment, same day appointments, hot towels; you can call us at any time of the night--all of that personalized concierge care for $1,500 a year per patient. But if you do not pay us that, you cannot be my patient, and, oh, by the way, I still want to receive reimbursement from the Federal Government for the reimbursable services I am giving to you, the senior citizen.

That was not how Medicare was set up. Medicare was set up for all senior citizens, not just those who can pay $1,500 a year to see the doctor.

This concierge care popped up here and in several other States. This amendment is to require a GAO study to examine the extent to which this might ultimately be a destructive force against the Medicare reimbursement system and the entire Medicare system because the logical conclusion of this kind of concierge care is we would have completely two tiers of service within Medicare. We would have those who could pay the $1,500 per year, and, by the way, that is just in one case. There is another case in California where they are having to pay $24,000 per year per patient just to be under the care of that particular doctor. So we would

have two tiers under Medicare. We would have the Medicare recipients, the senior citizens, who qualify, and they would pay that money and would go to certain doctors, and the doctors who were not going to charge that, who would be left over, would get all the rest of the Medicare patients who could not afford to pay the fee.

That is not the way Medicare was set up, and that is not how Medicare is intended to deliver health care services to senior citizens that are paid for by the Federal Government.

Instead of just coming in here and breaking down the door, I took the suggestion of the senior Senator from Louisiana. In this bill, he has a special provision having to do with speciality hospitals, but he first did a GAO study to show the extent to which those speciality hospitals were being utilized. That became the basis for changing the law. That is what I will be doing by offering this amendment No. 938 which we will discuss at a future time.

I inquire of the Senator from Montana--I am just getting ready to get into my comments about the bill--does the Senator from Montana know of somebody else who wishes to speak and, if so, can he give me an indication of how long he would like me to speak? I yield to the Senator.

With the enormity of this subject, Mr. President, I could go all the way from 5 minutes to 55 minutes. So what is the pleasure of the Senator from Montana?

I yield to the distinguished majority leader.

I thank my colleagues. I was actually willing to step down and let the distinguished majority leader go ahead. He is very kind.

I would like to point out some critiques. I want it nailed down that I support this package. I think we can improve it, but at the end of the day, if we have not been able to improve it by the amendment process, it is my intention to vote for it because I think it is a major step in the right direction. Over the course of time, we are going to be able to add to the law and improve it so that at the end of the day, perhaps in a year or two down the road, we are going to have a prescription drug benefit under Medicare for senior citizens.

This legislation does many things, not the least of which is the most comprehensive attempt at expanding one of our Government's most successful experiments, this Medicare Program.

Today, almost 80 percent of our seniors take at least one prescription drug a day and over half of them take an average of four prescription drug medications each day. Prescription drugs are responsible for keeping people out of the hospital and helping them maintain their health. Spending money on medicines not only reduces the suffering of millions but it also reduces their health-care-related costs.

Let me give an example. There is a lady named Ms. Rita Salls from Sebring, FL. She takes at least 12 medications each day and sometimes even more than that. Those medicines are what allow her to continue to live on her own, an independent life.

Like many of our colleagues, when we first ran for the Senate, we talked to our constituents--and we still do--and we said we were going to try to enact this prescription drug benefit under Medicare.

What do many of our seniors without the prescription drug coverage do? They have to skip doses to make their prescriptions last longer or they have to spend less on food. Can you imagine in the year 2003 in the United States of America that there are senior citizens who are having to make a choice between food or their medicine because they do not have enough money? In some cases, they are completely unable to fill a prescription solely based on its cost. The need for this benefit has never been clearer.

While this legislation is certainly an exceptional effort to fulfill our promise for a prescription drug benefit, it does fall short in some categories.

My first concern is as it relates to the provider of the drug benefit. Given Medicare's mixed experience with Medicare HMOs--what we call Medicare+Choice; it is an HMO created under Medicare-- we have not had too good of an experience with that because those Medicare HMOs have folded up and are cancelling out beneficiaries all across the country, particularly in rural areas such as Montana, and many of the rural counties in my State. How do I know that? Before I came to the Senate, I was the elected State insurance commissioner of Florida and I saw in county after county, as the regulator, where I had to go beg, cajole, and wheedle when a Medicare HMO stopped serving a rural county to get another Medicare HMO to come in and fill that role.

Should these companies come in, I still believe there should be the Government's fallback provision in the bill. It is certainly a very important provision. I wish it were in place permanently as the first option a senior could go to, but that amendment from a couple of days ago did not pass. In other words, I believe all seniors should have the option of receiving their drug benefit through Medicare rather than just through the private insurer. I think that ought to be the senior citizen's choice and yet that is not the case with the bill.

Another worry I have is how this plan is going to treat low-income seniors. In my State of Florida, over one-third of the seniors have incomes low enough to qualify for the low-income benefit of this legislation. This is especially true in Florida because the State pharmacy assistance plan in the State of Florida provides only a very limited benefit and is only available to a very small fraction of low- income seniors in Florida.

This Grassley-Baucus compromise provides premium and deductible assistance to seniors well above what Medicaid is required to do and what my own State is doing, but under the bill, some low-income seniors will not be eligible for the Medicare benefit because the plan insists that they continue to receive their benefit through Medicaid. Furthermore, beneficiaries will be subjected to an asset test in order to qualify for the benefit, which could deter some eligible beneficiaries from seeking the assistance in the first place.

Another grave concern I have is the coverage gap faced by the seniors under this legislation. Beneficiaries with drug costs in excess of $4,500 a year will find themselves continuing to pay a premium while not getting any benefit until the catastrophic provision kicks in, which is around $5,700. It is as if we are penalizing the sicker beneficiaries who depend on more prescription drugs.

Assistance to seniors should focus on individuals like Mr. and Mrs. Lomax of Longwood, FL. Mr. Lomax is 67 years old. He cannot afford to quit working because he and his wife would not be able to afford their prescription drug costs. So he continues to provide them coverage through his employer, because the cost of his medications add up to over $600 per month. Under this bill, Mr. Lomax would be required to pay over $4,200, over 40 percent of his annual drug costs.

Another critique I would make of the bill is it fails to address an issue not only affecting our Nation's seniors but anyone who has to purchase prescription drugs. I have talked to my former chairman of the Finance Committee and now the ranking member, Senator Baucus, about this. We realize these are the hard realities because nothing in the bill today guarantees that when Medicare or private plans on behalf of Medicare purchase their drugs from manufacturers that they get the very lowest possible price. If taxpayers are going to have to face the long- term burden of ensuring a viable prescription drug benefit for years to come, we should make certain the Government uses its purchasing power to the best of its ability.

That is a question that no doubt will be answered over the years as this new bill becoming law begins to be added to and perfected over the course of time.

In addition to expanding coverage of drugs in Medicare, this legislation does include some very worthy provisions aimed at easing the States' increasing burden of providing care to our Nation's immigrants. Immigrants and Florida, the two so often go hand in hand because of the desirability of coming to this wonderful country of ours. Where do so many of them come? To the shores of the State of Florida.

In this bill, by allowing the States the option to cover legal immigrant children and pregnant women through Medicaid and the State Children's Health Insurance Program, SCHIP, States will finally be able to obtain Federal dollars to offset the States' costs for immigrants. Similarly, increases in Federal reimbursement for providers of emergency treatment to undocumented aliens is welcome.

Florida ranks fifth among States with the highest population of illegal immigrants. Providing uncompensated care to illegal and legal immigrants is a major and growing problem for many of our hospitals in Florida. This provision in the bill will go a long way in helping to ease that situation.

Another major component of this proposal would increase funding to rural health care providers by more than $30 billion over the next 10 years, but I must say I am troubled by the way this bill pays for necessary increases in provider reimbursements by passing along their costs to Medicare's beneficiaries. They are already struggling to pay for their share of the health care costs. Their share of these costs can often exceed 45 percent of the total. So I think it is unconscionable to think that as we ask them to pay an additional $35 per month for drug coverage and an increased deductible we would ask them to pay for things they have not had to pay for in the past such as new deductibles and copayments on such things as outpatient lab services.

Furthermore, we are again threatening the ability of some of our sickest beneficiaries to receive the care they so desperately need. While we all agree that the method for payment of anticancer agents should be reformed, reducing the reimbursement from 95 to 85 percent of the average wholesale price without appropriate increases in payments for essential patient services could further jeopardize access to quality cancer care in a physician's office setting.

I, along with my colleagues, will do all we can over the course of the next several days to improve this legislation with amendments ensuring that the Government maximizes its purchasing power and ensuring a beneficiary's coverage is stable. They will, hopefully, be accepted. It will strengthen this legislation.

This is a starting point. We must also ensure that is a solid foundation for a comprehensive benefit that fulfills our promises to America's seniors.

Mr. President, certainly we are dealing with an issue and a proposal where there are huge differences. And there have been huge differences for some time. The Senator from New York represents quite a different point of view from several years past.

What we are trying to do is to provide better service, provide some options, provide some modernization of a program that is 40 years old, that has never been changed. So the question really is, How do we best serve all of the people who are in need of service? The question is not, How do we maintain and grow a Federal program, and keep it all Federal? That is not really what most of us have in mind.

We want to look at some alternatives. We want to look for choice, where people who wish to stay in the program as it now exists may do that. And that is what this bill provides. But it also provides an opportunity to move to something that could be different, have some choices, could even in fact be more efficient, more effective. I am afraid it is hard for me to accept the idea that Government programs are more efficient than the private sector. I don't think there is much evidence of that. Certainly what we are talking about here is having some opportunities for a change, some opportunities for some alternatives. I understand

there will be those who will be resisting those changes, but nevertheless we do have a bipartisan bill before us that incorporates that opportunity. We want to do it.

We are concerned, of course, about having services that reach out to everyone in rural areas. I think I am about as concerned about rural areas as anyone in this body. I come from one of the most rural States. I have to tell you how pleased I am that we have in this bill a substantial program for rural health care, one, by the way, that was turned down by many of the folks who are now worried about the rural areas in the tax bill. But it is here, and it will respond to the needs of rural constituents and rural beneficiaries. And that, of course, is of vital importance to all of us.

With respect to dual eligibles, the Senator, the speaker just recently, has raised a concern about how S. 1 treats seniors who are eligible for both Medicare and Medicaid programs. Those are known as dual eligibles. Under S. 1, these seniors will continue to receive their prescription drug benefit through the Medicaid program.

It is alleged that by having dual eligibles remain in the Medicaid program, Congress is treating them as second-class citizens and subjecting them to lower quality benefits. I don't believe this to be the case, nor is there evidence that it is the case. We worked diligently on the development of this package and reflected these concerns that were raised all the time during last year's debate. Learning from these lessons, we decided it was most beneficial to seniors to continue to build off existing Medicare and Medicaid low- income assistance programs as far as to offer a seamless benefit.

We do not want to divert scarce resources available for this benefit toward the development of a new government bureaucracy. I am confident S. 1 establishes this new benefit in a manner that will provide high quality, accessible care through a system that is familiar to seniors and easy to navigate.

It is also important to note that the Medicaid program is considered by most advocates and beneficiaries to be quite generous and far superior to the current Medicare program. Recognizing that this is a program for persons with low income, the Federal Government only allows States to charge nominal copayments to receive the drug benefit. Further dual eligibles have been and should continue to remain the joint responsibility of State and Federal Governments. However, in recognizing that the Federal Government should play a dominant role in delivering this vitally important benefit, we provide in this bill $14 billion in additional Federal dollars to help pay for increased costs associated with the new prescription drug standards included in the bill.

This is because the bill provides minimum standards to ensure that benefits provided through Medicaid are the same high quality as those provided through Part B of the Medicare program. For these reasons I am confident and I think our committee was confident that dual eligibles will continue to have access to prescription drugs that they deserve.

Some argue we should do more, perhaps even serve this population differently, but this bill was developed in a manner that we believe utilizes scarce dollars efficiently and helps to deliver care that is consistent with the current law and easy for seniors to navigate.

This is a discussion that has already been held to a great extent, how you deal with low income and to do it in a way that is consistent with what we have had in the past and was equal in benefits to what we have had in the past. That is the process that is designed here.

So as we move on, I hope we can continue to provide the things that are really the purpose of this whole bill. And there are two at least. One is to provide, of course, drugs, pharmaceuticals to seniors and do it in several different ways so that it meets the needs of those seniors somewhat dependent on income. The other is to provide some opportunities to improve the distribution system for Medicare, again, a program that has been in place for 40 years, has had relatively little, if any, change. And now we have an opportunity to give some choices to the beneficiaries and develop programs that are more efficient than what we have had in the past.

So it is kind of discouraging to have people stand and want not to change whatever we have had going on for 40 years. We are not talking about changing the benefits. We are not talking about the quality. We are talking about making a distribution system that meets the needs of the changes that have taken place in our society and be able to do that in a way that people would like to and will want to have choices.

So as we talk about these various amendments that will be raised, I hope we will continue to take a look at what it is we have as a goal here, to be able to do these things that have been described and focus on getting the kind of results we really have in mind when we put together this proposal and continue to have bipartisan support for the bill.

I yield the floor.

Mr. President, I agree with what the Senator just said. I ask unanimous consent that the order of amendments provide that when a Republican amendment is offered, it be considered in an alternating fashion with the Democrat amendments; provided further, that it be in order for the amendment to be offered in any Republican slot.

Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. President, I will comment on the amendment, the no premium on the donut amendment.

First, let me say that I wish we did not have a gap in coverage. Unfortunately, eliminating the gap in coverage could add as much as $200 billion to the cost of this proposal. As we all know, we are working within a budget of $400 billion and this bill targets those funds to those who need it most.

Most seniors, however, will not be affected by the gap in coverage at all. This is because their drug spending will not reach limit, or because they qualify for the additional assistance in the low-income benefit, or because they have additional coverage from a retiree health plan, or coverage they have purchased themselves.

Most seniors will not have drug spending in a year that exceeds the benefit limit. According to the Congressional Budget Office, 80 percent of seniors will not even have prescription drug spending that exceeds the $4,500 benefit limit.

That means that right off the bat only one senior in five would even have drug spending high enough to be affected by the gap in coverage at all.

Now, the drug benefit package for lower income seniors does not have a gap in coverage. In drafting this bill we have targeted resources to those who need it most. We made it a priority not to have any gap in coverage for lower income seniors.

This means that beneficiaries with incomes below about $15,000 and couples with incomes below about $20,000 in 2006 will have no gap in coverage. That is 41 percent of Medicare beneficiaries who are completely unaffected by the benefit limit.

In addition, beneficiaries who have coverage from a retiree health plan will not be affected by the benefit limit when the plan provides that additional coverage. Today, about 32 percent of beneficiaries have retiree coverage and this bill provides generous Federal assistance to retiree-sponsored plans so that they can continue to offer coverage to their former workers.

Other seniors will be able to purchase additional prescription drug coverage from their prescription drug plan or through their MedicareAdvantage plan. This additional drug coverage will be seamlessly integrated into their drug benefit package and will ensure that seniors who want additional coverage will be able to get it.

As a result of the elimination of the gap for 44 percent of seniors who have lower incomes and the fact that many seniors have additional coverage, we estimate that only about 2 to 12 percent of seniors will ever be affected by the gap in coverage.

Now every single beneficiary who enrolls in the drug benefit will have comprehensive coverage including coverage against catastrophic drug costs. That coverage is present even for those 2 to 12 percent who are in the gap in coverage. These seniors are always protected against higher drug costs.

Any enrollee will have 90 percent of their prescription drug costs covered if they have $3,700 in out of pocket spending on prescription drugs in a year.

Now Senator Graham calls the benefit limit a sick tax because he believes that seniors should not pay a premium for the coverage for catastrophic costs if they hit the benefit limit. This is like saying that you should not pay for fire insurance if your house isn't on fire.

But of course that is not how insurance works. People purchase insurance to protect them against unfortunate events like a house fire, an accident, or some other tragedy.

To get the coverage in your insurance policy, you pay an insurance premium. If you do not pay the premium, then your insurance policy is not going to give you the coverage.

That is the same idea here with coverage for prescription drugs. Any senior who wishes to enroll in the voluntary benefit will pay a monthly premium for that coverage. The coverage is voluntary and the premium is an affordable $35 per month. And 44 percent of beneficiaries with lower incomes will have very low or no premium at all for the coverage offered in this bill.

Finally, if we were to close the gap in coverage for seniors at higher income levels it could cost over $200 billion, which would require us to take benefits away from the seniors with the lowest incomes. Personally, I cannot justify that action.

Of course, today's seniors receive no assistance from Medicare for outpatient prescription drugs, and this bill changes that by adding a new comprehensive prescription drug benefit to the program. The average senior will save at least 53 percent, about $1,700, off their prescription drug costs after paying an affordable monthly premium of $35. And lower income seniors will have 80 to 90 percent of their drug costs covered.

We have worked hard to minimize the gap in coverage within the resources available for the proposal. We have done that. Most seniors will not have spending that hits the benefit limit, and for those who do, many of those will have coverage above the limit through the low- income benefit package, from retiree plans or from additional coverage provided by their plan.

I urge my colleagues to vote against the Graham amendment.

I urge we not consider the Graham amendment, that, in fact, this has been covered and is covered in the bill as it now exists and is designed to help those beneficiaries with the lower incomes.

I yield the floor and suggest the absence of a quorum.

Mr. President, as we hear more and more about this bill, of course, it causes us to reflect on it and that is the purpose of having conversation, that is the purpose of having debate. There will be much more of that, of course, but it is interesting to listen to what is being discussed, much of it based on the fact we need more money for this and more money for that, when we are adding to Medicare $400 billion, continuing to support the basic Medicare Program as it is financially, and adding to it this additional amount.

Medicare will be improved in every way as this happens. So I know it is a logical time to talk about how we might do more, how we might provide a Government program, as the Senator from New York talked about this morning, for everyone; take all the payments out, and that is a point of view.

I think, however, the concept of this business of Medicare is one in which we all pay into it, we pay something for it. Obviously, one of the principles of health care is for the recipient to pay something. We have found when they do not, it is out of control entirely.

We have a lot of worrisome times about Medicaid where there is no initial payment and we have overutilization. These are all part of the elements that go into it. I know it is great to talk about giving everything to everyone, but the fact is, that is not what is going to happen.

We have to get a balanced program that does what we really want to do. We talk about the gaps and helping people. The fact is, there is no gap for people who are below 160 percent of poverty. If we are going to assist someone, we assist those who are less able to assist themselves. That is what it is all about. That is what we seek to do.

Is it perfect? Of course not. If there were 100 of us sitting here working on the plan, we would probably have 100 different ideas as to how to do it, but we have to come to some consensus as to what our goals are and how we can best achieve those goals. Over time, it is something that is useful.

We have to keep that in mind as we go forward. Obviously, there are all different kinds of ideas, such as the fact we had a tax reduction and, therefore, we should be able to spend more. We had a tax reduction because we have an economic problem. We are trying to fix the economy-- that is why we had a tax reduction--along with terrorism and other needs. To say we should pay more because we already had a tax reduction is not relative. That is not where we are.

Out-of-pocket expenses, of course, are always important, and should be. That is one of the keys. Here we have a program on which we have a certain amount of money we can legitimately spend. How do we best do that? How can we deal with everyone the same? Do we do more for those with low income and those who are less able to afford it? Of course. The true out-of-pocket limit targets the drug benefit to those who need it the most. That is what it is about.

The purpose of out of pocket is to protect seniors from high out-of- pocket costs. It is that simple. Spending that counts toward the out- of-pocket limit spending by the beneficiary. If the beneficiary drug is covered by some other source, such as a retiree's health plan, that money does not count out of pocket.

Seniors with additional coverage are not penalized for having additional coverage. They are protected if they have $3,700 out-of- pocket spending. In addition, they continue to benefit from additional drug coverage beyond that point, of course.

In addition to out-of-pocket spending by the beneficiary, spending by family members or friends also counts toward the out-of-pocket limit, as does spending by State pharmacy assistance programs, by State pharmacy plus programs. These programs target resources to lower income seniors who need additional assistance. They are in place now.

Allowing this spending to count toward the out-of-pocket limits allows these lower income seniors to receive additional assistance and still be protected against prescription drug costs that are not covered by Medicare drug benefits.

We should care about what the individual beneficiary has to pay, not what others pay on their behalf. This is the purpose of out-of-pocket limits in the proposal. Those who reach the amount of spending available will have 90 percent of their drug costs covered.

The House and Senate bills encourage employers to continue providing benefits by allowing them to avail themselves of 100 percent of the subsidies for offering standard benefit. If employers want to provide more, they are free to do so.

These are tough issues as to how we deal with some limitation on the spending and how we distribute it. We will hear more about it, and, indeed, we should.

There will be finally some principles involved as to the best way to spend the amount of money that is legitimately available. I hope we continue to focus primarily on those who are in that category of 160 percent of poverty level, and that is where it will continue to be.

Mr. President, we will continue to hear more. We certainly should hear

more. We will continue to have more amendments, and that is fine. The Senator from Massachusetts was a member of the committee. We worked on it in the first place, and he has had an opportunity for input. Many of these proposals have already been voted on in the committee. Of course, if they are being proposed again, they were not successful in committee. Nevertheless, they should be brought up to this body, and they will.

Again, my hope is we can take a look at where we want to be in the year 2006, but what we want the result to be and make the adjustments that are necessary to get us to that point and not be taking up issues that are not even a part of debate. We are going to have to be very careful that we keep it limited to the issues that do impact Medicare and are in this area. I know we will continue to do that.

Mr. President, I suggest the absence of a quorum.