Madam President, as the Medicare prescription drug debate draws to a close, I would like to take a few moments to give my colleagues my honest assessment of this legislation. I join many of my colleagues in recognizing how difficult it has…
Madam President, as the Medicare prescription drug debate draws to a close, I would like to take a few moments to give my colleagues my honest assessment of this legislation.
I join many of my colleagues in recognizing how difficult it has been for the managers of this bill to hold to a proposal that fits within a $400 billion budget constraint. In that respect, they are to be commended for their discipline. But for my part, I believe that constraint, combined with the fervent intent by some to move Medicare to a private insurance model, has produced a bill that is fatally flawed. Seniors will not get the affordable, meaningful prescription drug coverage they expect because the majority of Members seem to have concluded that we cannot break the $400 billion barrier. I think it is a false choice.
The actual prescription drug benefit in this bill is inadequate to meet the needs of more than 40 million Medicare beneficiaries and eventually America's seniors are going to figure that out. The fact of the matter is that $400 billion is simply not enough to buy an adequate benefit. But we already knew that--our debates last year made that abundantly clear.
I believe that insisting on the capped amount of $400 billion for a Medicare drug benefit as a precondition of moving a new benefit through the legislative process serves as a convenient excuse. It means this drug benefit is sure to fail to meet seniors' real drug coverage needs. It also means that we will only cover 20-25 percent of seniors' drug costs.
What is worse, the complicated structure of this bill will cause seniors to be angry and confused by the benefit--and they will be entitled to be. This is not the straightforward guaranteed Medicare prescription drug benefit seniors have been repeatedly promised. There is no standard premium and there is no uniform benefit. For the first time under Medicare there is no universal coverage for all Medicare beneficiaries. This bill falls fall short of what seniors expect and need.
Let's take a few minutes to look at how the shortcomings of this bill will become apparent to a Medicare beneficiary--a senior or disabled person who enrolls in this benefit. For illustrative purposes, let's take an 80-year-old West Virginia widow living at 250 percent of the poverty level.
Assume this widow spent her entire career working for the same employer. Since her retirement, her employer has provided her with a fairly generous drug benefit--$150 deductible, $10 copays, and catastrophic coverage. However, once the Senate's proposed drug benefit is enacted, she becomes one of the 37 percent of Medicare beneficiaries who currently receive good employer-sponsored coverage who lose that coverage. That is because the way this bill works her former employers' contribution to her drug costs are meaningless because they do not count toward her catastrophic limit.
I want to note here that, during the health care reform debates of more than a decade ago, one of the few things that we seemed to agree on was that we should not disrupt the health care coverage that Americans already rely on. My friends on the other side of the aisle, in particular, were quite adamant about that point. Well, this bill would not just disrupt the drug coverage for millions of seniors, it would completely strip the drug coverage from 4.5 million seniors who have employer-sponsored coverage today.
It will strip their employer-sponsored coverage and leave them with an inferior drug benefit which is either less generous or more expensive. I offered an amendment to correct this problem, but it failed just 2 days ago.
To return to my example, as a result of having lost her employer- sponsored coverage, this 80-year-old senior decides she has to enroll in the new drug benefit next year--in 2004--only to find out that it will not be implemented until 2006. There is a discount drug card, but it is not substantially better than the discounts she gets today--and it is far worse than the drug benefit she used to receive from her former employer.
This widow spends the next 2 years trying to figure out whether it is to her benefit to enroll in this new Medicare prescription drug benefit. But she can't really make an informed decision because she has no idea what the premium will be or what the benefit will actually look like. She decides to enroll in the voluntary benefit having been told that if she waits to enroll she will have to pay a very harsh late enrollment penalty.
This particular 80-year-old senior lives in West Virginia, so let's assume that no private insurers enter the area to provide a drug benefit. That has been my State's experience with the Medicare+Choice Program and I have no reason to believe that this proposal will produce a different outcome.
My illustrative senior citizen enrolls in the fallback. Her sister, however, lives in northwestern Ohio and has enrolled in a Medicare Advantage Plan. For the first time under Medicare, the West Virginia widow and her sister in Ohio have a different Medicare benefit and are paying a different premium for that benefit. In addition, her sister is being offered additional benefits like a catastrophic limit on her medical expenditures and disease management. These additional benefits are not even being offered to the West Virginia senior because she remains in traditional Medicare.
Now, fast forward 1 year and assume that private insurers decide to enter West Virginia. The fallback plan she received through traditional Medicare disappears and she is required to enroll in a private insurance plan. She cannot see the doctor she was seeing because he is not in the private insurer's network. She cannot go to the pharmacy she usually visits--the one that is right down the street--because it is also outside the network. She can't have the drug she was taking because it is not on the insurers' formulary.
Again, fast forward, this time it is 2 years later. Let's assume that the private insurers did not make enough
profit to continue to provide a drug benefit in West Virginia--then what happens? The now 83-year-old widow will have to start the process all over again.
What is worse is that each senior will face a different calculation in determining how this bill will or won't help them. Senior citizens with incomes of 135 percent of the poverty level should theoretically pay no deductible, 5 percent cost sharing up to $4,500 in total spending, 10 percent cost sharing between $4,500-$5,800 and 2.5 percent cost sharing above $5,800.
But this bill has an asset test that will prevent millions of seniors from getting the low-income subsidies in this bill. If a senior owns a burial plot worth $1,000, a $3,000 Treasury bill, and a vehicle worth $6,000--indeed, if a senior owns anything that adds up to over $10,000 in assets, not including his or her home, the cost sharing they have to pay will double.
Our Nation's neediest seniors, those with incomes 74 percent of Federal poverty, will not be permitted to enroll in the new Medicare prescription drug benefit at all. Even though these low-income seniors are Medicare beneficiaries, they will not be eligible for this particular Medicare benefit because they are now eligible for Medicaid. They will be discriminated against for the very first time under this new Medicare benefit.
Seniors who are forced to remain in Medicaid may well end up seeing their drug coverage dramatically cut back. With our Nation's economy still fairly stagnant, State budget situations remain dire. In some States, dual-eligible Medicare beneficiaries may only have coverage for three prescriptions per year, regardless of their medical needs.
Put simply, the Medicare drug benefit the Senate is about to vote on has fatal flaws. The following is a list of 10 fatal flaws that, combined, persuade me this bill should not get my vote.
1. The drug benefit has no national premium. CBO estimates that $35 will be the national average premium. That number appears nowhere in the legislative language. It is a projection, a best guess--and it certainly could be higher.
2. Under this prescription drug plan, the premium will vary in every region of the country, perhaps State by State, and there is no limit on how high it can be. We defeated an amendment that would have limited the variation to no more than 10 percent above the national average, but it failed.
3. Private insurers will actually decide what the premium will be. And, this premium will grow each year by the rate of increase in drug costs--that is roughly 10-12 percent increases every year. That means seniors in 2008 could well be paying $50 a month for their drug premium alone--and that is on top of the cost of their deductible and copayments.
4. There is no requirement for private plans to offer a standard benefit-- private plans are only required to offer an actuarially equivalent benefit. That means West Virginians and other rural beneficiaries may not have access to the same drug benefit that other seniors will have--again, for the very first time under Medicare seniors in some States won't get the same benefits as seniors in other States. I am not very confident that West Virginia seniors will end up with the better benefit--we never do.
5. The bill currently has a completely unstable fallback. Under this proposal, the only time a beneficiary will have the option of receiving coverage through Medicare is if there are not at least two bids from private insurers to serve a region. There is no guaranteed Medicare prescription drug benefit of the kind I believe seniors fully expect. Moreover, if private insurers do not enter an area, the fallback moves into place for 1 year. The next year, a new bidding process begins, and if two plans show up, the Medicare fallback disappears. Private insurers can then change or terminate coverage every 2 years. This means that seniors, especially seniors in rural areas where preferred provider organizations or PPOs and private plans are not likely to come to the table, may end up bouncing between a fallback, then a private plan, and then back to a fallback. Back and forth, back and forth. All the while, this senior will be forced to change doctors and pharmacists, their cost sharing will be changing, as may their premiums. The Senate prescription drug plan we are considering leaves the big HMOs and insurance companies in charge.
6. There is a significant gap in coverage. That gap is $1,300-- seniors pay their monthly premiums but get no drug benefit in that gap. Two amendments to address this problem did not achieve sufficient votes for passage. One was an amendment to eliminate this gap. Another one would have said that seniors would not have to pay premiums when they were not receiving any benefit. The failure of these two strengthening amendments means that under this legislation, if a Medicare beneficiary has $5,900 in drug spending per year, by October 7 of that year, their benefit will run out. That beneficiary will continue to need the drugs each day for the rest of the year but her benefit will run out on October 7. Fifteen million Medicare beneficiaries will fall into the gap.
7. Low-income seniors who are eligible to receive a drug benefit under Medicaid will not be eligible for the Medicare prescription drug benefit, as I illustrated in my earlier example. This means that 43,000 West Virginians will not be eligible for this Medicare prescription drug benefit. Millions more across America won't be eligible for this Medicare benefit even though they paid their whole lives into the Medicare program rightfully expecting that it would cover their health care costs.
8. Again, under this legislation, CBO estimates that 37 percent of Medicare beneficiaries who currently receive a drug benefit from their employer will lose that coverage because of the way this legislation defines out-of-pocket costs.
9. This proposal requires private insurers to provide beneficiaries with a catastrophic limit on expenditures for medical benefits, disease management, chronic care services and preventive benefit. But, such benefits are not made available to beneficiaries remaining in traditional Medicare. Everyone keeps arguing that these private plans will provide better, more comprehensive, preventive care. But, the fact is that this bill precludes the traditional Medicare from providing better, more coordinated care. There is no reason that traditional Medicare cannot provide the same level of care as a private plan--at a significantly lower administrative cost, I might add--but not if we preclude it from doing so.
10. And if those reasons weren't enough, consider what is headed our way in conference: today, the House will include in its prescription drug bill new tax shelters for health care, that disproportionately help the rich and undermine employer-based health insurance coverage . . . the very system that the vast majority of Americans depend on for their health care and a voucher system for Medicare beneficiaries beginning in the year 2010.
Under this system, seniors would receive a defined contribution payment rather than a defined benefit. In other words, rather than defined benefits beginning in 2010, seniors would receive a set premium payment--like a voucher--from the Government.
We need to think about what we are doing here. In my judgment, every Member of Congress should think about this benefit from the perspective of their beneficiaries. This proposal is a great opportunity for seniors to shop for new coverage every few years. If you have the utmost faith in private insurers to provide good health coverage to elderly Americans and the disabled, then this is the plan for you. This plan puts private insurers in the driver's seat by giving them flexibility to vary premiums and change or terminate coverage every 2 years. But, as far as providing long-term security, this proposal fails.
Finally, several Members have come to the floor and claimed that this proposal is just a downpayment--that we will be able to revisit the benefit over the years and make it more generous. That is simply untrue. We have an administration that is intent on large tax cuts, that is focused on the minimization of Government and that is committed to the privatization of the Medicare Program. Most every amendment offered during this debate to improve this benefit has lost. I don't know why any senior would believe that we will be able to revisit this program and make it better. We should take the time to get it right.