Mr. President, do I need to ask unanimous consent the present amendment be temporarily set aside? Mr. President, in the 5 minutes I have, let me discuss it very briefly with my colleagues. This amendment would allow Medicare beneficiaries…
Mr. President, do I need to ask unanimous consent the present amendment be temporarily set aside?
Mr. President, in the 5 minutes I have, let me discuss it very briefly with my colleagues.
This amendment would allow Medicare beneficiaries the freedom to move between plans for the first 2 years that this benefit is in effect, from 2006 to 2007. Under the present bill, you have to make a decision immediately and then you are locked into that decision for a year. Then you would have an open enrollment period for a month after that, and then you would be locked in for another year.
What we are offering with this amendment is initially seniors be given a 2-year window in order to decide which plan works best for them. Then you would go to the 1 year with the 1-month open enrollment. But, initially, given the tremendous amount of potential confusion about which of these various alternatives would work best for people, they ought to be given a bit more time than to have to make an almost instantaneous decision about which of these plans is best suited for them.
One of the hallmarks that has been used to describe this bill is it is to give people choice--flexibility and choice. All we are suggesting is an additional 2 years, if you will, not requiring an immediate decision but a 2-year window in order to make that choice so people are more well informed.
There are a number of areas in the underlying bill that do not go nearly far enough, in my view, to serve Medicare beneficiaries. But I believe this is a good first step, at least as presently proposed. I am inclined to be supportive of this bill. These are some small points I think could help make this a better bill.
If enacted, the underlying bill would require, as I mentioned, Medicare beneficiaries to choose a prescription drug plan and to stay with that plan for a minimum of 1 year. With the enactment of such broad and sweeping changes in the Medicare Program, I am fearful many Medicare beneficiaries will face great uncertainty trying to find the best plan to meet their particular needs. Beneficiaries would be faced with a menu of plans offering varying premiums, copayments or coinsurance, drug formularies, and all the other variables that make up a prescription drug benefit. It may not be immediately clear to people over the age of 65 which of these plans is going to best suit their needs. It is not difficult to imagine a scenario where this could become a significant problem, possibly even affecting the health and well-being of the beneficiary we are trying to assist with this legislation.
A senior on a tight budget might enroll in a plan in an area that offers slightly lower premiums and coinsurance. Perhaps that beneficiary is on blood pressure medication and, after enrolling in the plan, discovers the particular medication--which she has been taking for years and has proven to be effective for a condition, with minimal side effects--is not part of the formulary for the plan she chose immediately.
What I am suggesting is, What are her options? As the bill is currently written, she is stuck with that plan for at least a year. So she can try to navigate the hurdles and obstacles that would allow her to take an off-formulary drug, or switch to another drug that might not be as effective or cause severe side effects. These are not optimal choices.
One of our stated goals is to give seniors as much of a choice as possible, and I am firmly behind that goal, as I mentioned at the outset of these remarks.
I do not want to suggest for a second that we should reduce choice or create simplicity, nor do I question the importance of cost-control mechanisms such as formularies. However, with choice and differentiation comes uncertainty. I believe we can greatly relieve this uncertainty by allowing those initially choosing prescription drug plans for the very first time the opportunity to move from one plan to another to determine which of these plans offers the best plan to fit their needs, and to give them the opportunity of doing that for a 2- year period, and then go to the open enrollment period and a 1-year after that.
I asked people in my own State to take a look at this proposal. In fact, this language comes from them. Their suggestion is this language I have on this chart. I will read from it:
The amendment which you are proposing is essential to
ensure fair and informed access to the health plans which are
planned under the terms of S. 1.
By the way, these people are very much supportive of what Senator Grassley is doing in this bill. They say:
Our experience with Medicare beneficiaries in Connecticut
and nationally has shown that the ability of a Medicare
beneficiary to change from plan to plan, especially during
the period after initially choosing a plan, is of utmost
importance. Making choices about which health plan is best is
often confusing for a Medicare beneficiary, especially for
those who are elderly, frail or having medical problems.
Comparing plans and choosing the right plan can be a
complicated process, and Medicare beneficiaries who discover
they have not made the most informed choice, whose experience
with a plan demonstrates it is not adequate to meet their
needs, or who have changes in their life circumstances, need
to have some ability to change from one plan to another. Only
with this ability to change can they be assured the
opportunity to receive the kind of health care they want, and
the fullest health benefit they need, to meet their
individual circumstances under the Medicare program.
Mr. President, I ask unanimous consent for 30 additional seconds.
All we are asking is, instead of forcing people to make that initial decision, they be given that 2-year window to sort this out. And then you move into the 1 year and the window opens, and so forth. I do not think this has any significant financial implications. It is just allowing people to make intelligent, good choices which all of us want to provide people, particularly older Americans who could be terribly confused by choosing formularies and coinsurance and copayment plans. All that has to be done at the outset once this bill becomes law.
I have used a little more time than I said I would to try to explain the amendment, but I want it to be clear to my colleagues why I think this is a
very reasonable suggestion to make an improvement to this bill.
I thank the Presiding Officer for his indulgence.
Mr. President, I ask unanimous consent that my colleague, Senator Lieberman, be added as a cosponsor of this amendment.
Mr. President, if they don't want to talk, I will be glad to take a little more time to explain this amendment.
Mr. President, I thank the man from Iowa for yielding the 1 minute.
The man from Connecticut appreciates the man from Iowa giving him 1 more minute.
Mr. President, very briefly, the existing underlying bill says you have to make this choice about which plan you want to go into almost immediately once this proposal becomes law. We are suggesting that at the outset you give people a 2-year window to shop wisely. They may make the decision right away. They may make it within a month or two. But knowing how confusing this can be, knowing that different formularies provide for different medications, we ought to provide people at least some opportunity to get this right to the extent they can. So this is merely opening up that window from an immediate choice to a 2-year choice--anytime within that 2 years to make that right choice.
There have been some who wondered, if you move from one plan to the next, what are the cost implications? I will be glad to respond to that. We do not think that is terribly complicated to figure out. If you have reached your deductible levels, obviously, the same would have to apply. You would not start all over in that 1-year period. So whatever costs you have incurred, whatever expenditures you have made or not made would move from one plan to the next, at least as far as the cost goes.
So the additional time should not have any additional financial or fiscal implications but merely the choice of saying to people, who are older Americans: You get a little more time to sort this out. That is all I am suggesting with this amendment.
I would hope the committee might support it. It is not a radical proposal.
I thank the Senator.
I ask unanimous consent for an additional 30 seconds.
Mr. President, this is one time. Unlike Federal employees, who are 30 or 35 years of age, this plan is all new. What we are saying is, for the very first 2 years--that is all, just the first 2 years-- give seniors the flexibility so they do not have to sign up for a plan immediately. You get a couple years within that timeframe to make your choice, then you go into the 1-year cycle as all the rest of us do. But for older Americans, it is very confusing--very confusing--for them to have to make that choice at the get-go, right at the very beginning. So that 2-year window, to have some flexibility to make a choice that best serves your interest, I think is a reasonable request to make for our older Americans. That is the end of it.
Madam President, I ask unanimous consent that the pending amendment be temporarily laid aside.
Madam President, I call up amendment No. 998.
Madam President, I ask unanimous consent that further reading of the amendment be dispensed with.
Madam President, this first amendment is intended to address one of the major problems with this bill, and that is the impact the legislation could have on Medicare beneficiaries who are currently receiving prescription drug coverage under the employer- sponsored retiree benefit plans.
I will quickly point out to my colleagues who may be saying we voted on this with the Rockefeller amendment that this is very different. The Rockefeller amendment was designed to provide encouragement to employers to supplement the existing prescription drug benefit. This amendment is designed to provide that encouragement only to employers who would be picking up the total cost of the prescription drug benefit, not just acting as a supplement. So it is very different. It is not the wraparound. This is an optional choice by the retiree or the employer. If they are the primary provider of the drug benefit, they would be covered by this amendment.
For employers intending to act as a supplement to the coverage, we decided that today; unfortunately, it was voted down. With that in mind, clearly in this bill most of us believe what we ought to be trying to do is support, not supplant, the valuable efforts of employers already providing prescription coverage to retirees.
As presently written, I am concerned the bill would lead many retiree benefit plans to scale back or drop entirely the prescription drug coverage they presently provide. However, this amendment would provide an increased subsidy to employers, because we want to encourage them to provide this benefit to retirees. It seems to me it is in our interest to encourage them to stay involved. They would get a subsidy, as long as they continue to offer prescription drug coverage to retirees only as the primary provider, not as a supplement--not as a wrap around the new Medicare benefit.
The scope of this problem is not small at all. In fact, I was surprised to learn how many seniors would be impacted by the unintended change to retiree benefit coverage. About one-third of all Medicare beneficiaries receive prescription drug coverage through an employer- sponsored health care plan. That is by far the largest source of prescription drug coverage for seniors.
These plans have played a very critical role in providing security to seniors, while Congress has been unable over the last number of years to pass a prescription drug benefit plan under Medicare. Retiree benefit plans should continue, in my view, to play that role even after a drug benefit plan is enacted. In many cases, the drug coverage provided by retiree benefit plans is significantly more generous than the plan we are debating here.
Furthermore, many seniors have become familiar and comfortable with the coverage offered by their former employers.
Understandably, they do not want to give it up for a plan about which they are confused and uncertain or may not be as beneficial to them.
We should be doing, in my view, everything in our power to provide these seniors with a choice, with the option of staying with their employer-sponsored plan. Thus, this amendment.
Unfortunately, the option may not be available for many seniors. That is why I put up this chart. I wish to focus the attention of those who may be following this debate to the left side of this chart. The right side I will talk about briefly, but the most significant numbers are on the left side of the chart. I will get to them in a minute.
While the numbers vary slightly, depending upon which study one consults, they come to the same conclusions, roughly the same numbers, and they are very disheartening. Between 1993 and 2001, the percentage of large employers, those who employ more than 500 people, offering coverage to Medicare-eligible retirees dropped from 40 to 23 percent, almost in half over 7 or 8 years. In the last 2 years, 13 percent of all employers offering future retiree coverage have elected not to do so. Those retaining coverage are experiencing annual cost increases on the order of 14 percent. It has been tremendously expensive. As a result, they are substantially raising the cost-sharing burdens for individuals enrolled in these plans.
The chart on the left-hand side illustrates the crisis that employer- sponsored plans are facing today and are going to continue to face in the future. The numbers are based on a survey conducted by the Kaiser Family Foundation and Hewitt Associates in December of 2002.
The graph shows that the actions large employers have taken over the last 2 years to deal with the rapidly increasing retiree health care cost--these numbers may not be clear to everyone, so I will recite them--a large number of employers have increased individual costs in some way. Forty-four percent have increased retiree contributions to premiums, while 36 percent increased cost sharing. In addition, 14 percent have shifted all costs to the individual retiree, and 13 percent have eliminated the plans altogether. Finally, nearly half of employers surveyed increased cost sharing for prescription drugs, as shown by the bar depicting 49 percent.
The numbers on this chart do not bode well, is the point I am trying to make, for those seniors who currently receive health care benefits from their former employers. Given the enormous financial pressures being felt by employers and the encouragement this bill already provides--in the form of a 64 percent subsidy--to keep employers from dropping coverage, it seems to me that if the employees decide to stay with their existing coverage, we believe that subsidy ought to go from 64 percent to 100 percent of the national average premium. That is what we are trying to do with this amendment.
The Congressional Budget Office has estimated that almost 40 percent of seniors who currently have their prescription drug medicines covered by retiree benefit plans would lose their coverage under the plan before us. So even with the 64 percent subsidy, 37 percent of retirees would be dropped from these plans. We are raising through this amendment that subsidy to 100 percent which we think will do a lot to keep these employer-based plans in place so that retirees would have that option of sticking with those retiree plans.
I supported the Rockefeller amendment. I mentioned that earlier. This is different. This is very different. If you are just supplementing the benefit plan, then you would not be covered by the Dodd amendment. That was the Rockefeller amendment, and the Senate voted it down. My amendment says only if you are the primary provider of the prescription drug benefit would you get the kind of subsidy we are talking about, from 64 to 100 percent. That would mean approximately an additional $400 a year per retiree paid to the employer. This would encourage employers to retain the full prescription drug coverage they presently provide rather than cutting back coverage and simply supplementing a new Medicare benefit.
The underlying bill has a provision that would provide a subsidy to employers for every Medicare-eligible retiree who elects to remain in an employer-sponsored plan as an alternative
to the Medicare prescription drug plan. That subsidy would be approximately, as I mentioned, 64 percent of the national average premium for prescription drug coverage.
This amendment would very simply increase that subsidy to the full national average premium. This would mean an additional $35 a month per beneficiary or roughly $400 a year paid directly to employer-sponsored plans as long as they continue to offer an alternative to Medicare prescription drug coverage, bringing the total subsidies to almost $100 per month when we combine the 64 percent that is in the bill and what we are adding with this amendment.
To receive this subsidy, employers would have to offer a prescription drug plan that is competitive with the Medicare benefit because the subsidy would only be paid for beneficiaries who remain in the employer-sponsored plan and do not enroll in Medicare Part C or D.
We simply cannot allow retiree benefit plans to disappear. That would be a great mistake, in my view. This amendment is designed to keep them if we can. It is a modest amendment considering the benefits that could accrue to the retirees, giving them the option of sticking with an employer-based plan.
If CBO is right, under the plan before us, almost 40 percent of these retirees will lose that prescription drug coverage under their employer-based plans. I do not think we want to have that happen. I urge the adoption of this amendment, and I hope my colleagues will be supportive of it.
I see the chairman of the committee who I know wants to respond to my amendment.
That is correct.
Mr. President, if I can finish, I can give the chairman a chance to respond.
I ask unanimous consent that a letter signed by 33 of the labor unions in this country in support of my amendment be printed in the Record.
Mr. President, I will read a pertinent passage because this is really the heart of this issue. I mentioned earlier, one-third of all retirees get coverage under the private employer-based plans. If CBO is right, almost 40 percent of retirees will lose their coverage under this bill, and employers would start dropping them because they do not get the subsidies, then I think we have to understand what the implications mean for a lot of people. I do not believe my colleagues intend this to be the case, but this is what is going to happen if we are not careful.
The letter reads in part:
If the Medicare drug bill before the Senate, S. 1, becomes
law, 37 percent of retirees who now have employer-sponsored
health benefits will lose that coverage.
That is according to CBO.
That's 4.4 million retirees that will be made worse off if
S. 1, as drafted, is enacted into law. Such an act will
represent an enormous and irreversible blow to the employer-
based system that is the backbone of our nation's health care
system.
The letter goes on:
. . . any provision that encourages employers to drop their
retiree benefits will only end up costing the federal
government more--and hurt millions of seniors in the process.
. . .
We urge you to support the [Dodd] amendment aimed at
encouraging both public and private employers to continue
providing retiree health benefits. Congress must enact a drug
benefit that supports, not threatens, our fragile employer-
based system of health coverage.
That is what my amendment is designed to do: to provide that subsidy if the retiree takes the option of continuing in the employer-based plan as the primary provider for health care coverage. If that is the case, then I think we ought to provide that encouragement and inducement. They make a huge difference in people's lives. If CBO is right and we do not adopt this amendment, and 4.5 million people have a worse plan as a result of our action, we have taken a step back rather than a step forward for that many seniors in our country. I don't know of anyone in this Chamber who would like to be a party to that.
For those reasons, I hope my colleagues could support the man from Connecticut on his amendment.
I will take 1 minute on this amendment and move to my second amendment.
This is an optional choice. We are not requiring employers to retain an employer-based plan. We are saying we know already, based on CBO's analysis, that close to 40 percent of people under the employer-based plans will be dropped. We know that.
Our primary responsibility in this bill is to provide a good prescription drug benefit for people. We do not want to be in a situation of actually causing people to have a worse plan than they have.
My point is not to increase spending but to say, if you are going to provide prescription drug coverage as an employer--and I want you to continue doing this; and we are being told 37 percent of the people will be dropped--we will increase the subsidy. To encourage employers to continue doing it seems to me to be in our interest. That is why I offer this amendment and why it is so strongly supported by labor unions who believe this will be a major blow to almost 4.5 million retirees in the country. I urge adoption of this amendment.
Amendment No. 970
The second amendment I call up is amendment No. 970, and I ask for its immediate consideration.
Let me briefly explain this amendment. I commend the committee.
This bill does an awful lot for people who are really hurting. I want the chairman to know I strongly support his efforts. Those who are really hurting get real help with this bill. I commend the committee for focusing on that. I commend him for it.
What this amendment does is a little different. We have all been talking about donut holes. People watching this debate may wonder what we are talking about, but the donut hole is in the plan when you reach a certain level of your costs of prescription drugs. Even though you keep paying the premiums of $35 a month, if your costs run somewhere around $4,500 to $5,800, during that period you are in the eye of the hurricane, and you do not get any help during that period.
That is not true if you are below 160 percent of poverty. If you are below 160 percent of poverty, we will provide help to you even while you are in the donut hole.
My amendment effects those in the donut hole who are between 160 and 250 percent of poverty. That is an individual who makes $22,000 a year or a couple earning $30,000 a year. These are people who are really hurting out there as well. They are not as desperately poor as those at 160 percent of poverty, but they are not much better off. But just in the donut hole, could we say that those people might get a 50/50 deal in the donut hole, between 160 and 250 percent of poverty? In that one set of circumstances where the costs are running from $4,500 to $5,800, you get a 50/50 deal if you are making $22,500, or a couple, $30,000, that is what the amendment does.
I know the chairman is going to say these are great ideas and there is a cost associated, and there is. But we ought to provide some help to people in those earnings groups--$22,000 if you are single or $30,000 as a couple. These are probably cancer patients or patients with serious medical costs. If you are paying somewhere around $4,500 a year, up to $5,800 a year, you have a serious health care problem. If you are making $22,000 or $30,000, as an individual or a married couple, then to provide 50 percent of the cost of those prescription drugs while you are in that donut hole I do not think is asking too much of us.
We should add just a little bit to accommodate these not even middle- income people. It would be an unfair description to say these are middle-income people. There is nothing magic about 250 percent. I just tried to reach out a bit to that constituency here that will continue paying the $35 a month. They have to do that. They do not get anything. If we could just reach a little further to that constituency, beyond the 160 percent, between $4,500 and $5,800 in total spending. We try to provide an additional bit of help for you, 50 percent of that cost. We can't pick up all of it, that would probably be too expensive. I don't know what the CBO numbers would be, but we will put you in the 50/50 bracket up to 250 percent of poverty just while you are in that situation. That is what the amendment does. It is no more complicated than that.
Again, I compliment the chairman. They have done a very good job taking care of the very desperately poor in the country. But for people who are not quite desperately poor--although I suggest some may tell you that living on $22,000 a year as a single person or a couple over the age of 65 with $30,000 worth of income, they are not out partying. These people probably make choices between food and rent and medicines, particularly if you are paying $4,500 a year or up to $5,800 a year for prescription drugs. That comes off the $22,000 or your $30,000. You do not have to do the math to know where you are living, what circumstances you are under.
So this is designed to provide some additional relief for people in that category, moving it up just a little bit, up to that 250 percent from 160 percent while you are in the donut hole, only there, to get a 50/50 break. You still pay 50 percent of the cost. You don't get 100 percent relief, but 50 percent of the cost, and that is what the second amendment is designed to do.
I apologize for racing, but I am trying to get this in in the 5 minutes. This is obviously complicated stuff. I am trying to accommodate my colleagues who I know have other engagements this evening to explain what the amendments do. The time does not justify the context, as to how important this would be to a lot of people in this country. I don't know the numbers of the people in this income category, but I have to believe before we get done with this, to provide some additional help for people in that category ought not to be too much of a stretch when you consider that $22,450 for an individual and $30,000 for a couple is going to put a lot of burden, a lot of pressure on you if you are already paying somewhere between $4,500 and $5,800 in prescription drug costs. This amendment would help those people.
I hope the man from Connecticut might impress the chairman on this one with his support. Hope springs eternal. I keep knocking on the door, seeing if I can't get some help.
I had 5.
I thank the chairman. He has been very gracious. This is my last amendment. I have tried vainly over here in the last couple of days with some amendments--I don't know what the implications are; I appreciate his candor, in terms of not knowing the cost of this amendment--that would fill in the hole, to go from 160 to 250, for people in that category. The reason I offered it is it occurred to me if you are paying that much in prescription drugs, somewhere around $5,000 a year for prescription drugs, and you are making $30,000 as a couple or $22,000 as an individual, you probably have a pretty serious illness if you are paying about $5,000 in prescription drug costs.
It occurs to me that during that hole, we might try to do a little more. We have done that, as the chairman says, very graciously for the desperately poor in this country.
For those reasons, I urge the adoption of the amendment. I will let the chairman proceed. The first amendment, I guess, we will do in that order.
There are two amendments. Amendment No. 998?