Statement of Sen. Orrin Hatch
before the
United States Senate
"Medicare Prescription Drug Legislation"
Mr. President,
I have heard my name being used a lot on the floor this afternoon and I plan to make a comprehensive statement tomorrow that outlines my views on the Hatch-Waxman amendments contained in S. 812. However, my purpose this afternoon is to discuss the Medicare prescription drug issue which we will be debating on the Senate floor in the very near future.
I have been working with four of my Senate colleagues – Senators Grassley, Jeffords, Breaux and Snowe for the last year on a Medicare reform and prescription drug bill. This legislation, the 21st Century Medicare Act, better known as the Senate Tripartisan Medicare Prescription Drug Proposal, was introduced yesterday after months and months of hard work.
This bill was introduced because the five of us crossed party lines and worked together. It was introduced because all five of us want a Medicare prescription drug benefit to be signed into law, this year. Medicare beneficiaries deserve nothing less. But others in this body, in my opinion, feel differently.
Mr. President, here we are, on the verge of considering Medicare prescription drug legislation on the Senate floor without the Finance Committee even being part of the process. The Finance Committee members, under the leadership of Chairman Max Baucus, have been meeting for weeks to try and draft a consensus Medicare prescription drug bill. But due to artificial deadlines imposed upon us by the powers that be, we are not going to be even given an opportunity to consider a Medicare prescription drug bill in the Finance Committee before the full Senate considers the Medicare drug legislation. Why even have a Finance Committee when bills that are under its jurisdiction are brought up on the floor without even a hearing or a mark-up? Sadly, politics is dictating policy. And I find that completely unacceptable, especially when it involves an issue as important as Medicare prescription drug coverage. By putting politics before policy, we are not doing what is in the best interest of senior citizens.
I would like to take this opportunity to talk a little bit about the tripartisan bill. When drafting this legislation, we tried to reach out to everyone who has a stake in this issue. It has required many hours of meetings--meetings among ourselves, with our staffs, CBO, CMS, seniors groups, insurance providers, PBM representatives, technical experts and other interested parties.
Let me assure all of you that this has been a unified effort, one which has required some give and take from all us. I truly believe that this Tripartisan bill is, in fact, the only bill capable of passing the Senate in 2002.
We have worked with CBO constantly in order to come up with an affordable solution. And CBO has told us that our bill will cost $370 billion over 10 years. As far as I know, the Daschle-Graham-Miller does not have a CBO score but I suspect that it is extremely expensive.
In addition, there are no sunsets within our bill – our Tripartisan bill is a permanent solution, not a temporary one. And CBO informs us that once our bill is implemented, 99% of seniors will have drug coverage, which is truly remarkable. On the other hand, the Daschle-Graham-Miller bill sunsets after 2010, so, in my opinion, it is only a temporary solution. And how does a temporary solution truly help seniors in the long run? I don’t think it does.
Our Tripartisan bill provides all Medicare beneficiaries with affordable prescription drug coverage because we let innovation and competition determine the prices, not some government bureaucrat. That is how we keep prices for drugs competitive. I don’t think it is a good idea to let the government set the price which is what will happen if the Daschle-Graham bill becomes law.
We also provide additional subsidies to low-income seniors so they, too, can afford to pay for their drugs. I find it absolutely appalling that there are people in our country who have to choose between buying food and buying prescription drugs. The Tripartisan Group’s goal was to put an end to that and provide additional help to those seniors who need it.
For example, the ten million beneficiaries with incomes below 135 percent of poverty will have 80 to 95 percent of the prescription drug costs covered by this plan with no monthly premium. These seniors are exempt from the deductible and will pay well under $5 for their brand name prescriptions and their generic prescriptions. And enrollees at this income level who reach the catastrophic coverage limit will have full protection against all drug costs with no coinsurance.
The 11.7 million lower income beneficiaries with incomes below 150 percent of the poverty level are also exempt from the $3450 benefit limit. Enrollees between 135 percent and 150 percent of the federal poverty level will also receive a more generous federal subsidy, that on average, lowers their monthly premium to anywhere between zero and $24 a month on a sliding scale. It also more than halves their annual drug bills.
All other enrollees will have access to discounted prescriptions after reaching the $3450 benefit limit, and a critically important $3,700 catastrophic benefit, which protects seniors from high, out of pocket drug costs. This is hardly a doughnut hole – my friend and colleague, Senator Snowe refers to it as more of a bagel hole.
It is also important to note that 80 percent of Medicare beneficiaries will never experience a gap in coverage.
As far as drug coverage is concerned, we let Medicare beneficiaries choose from at least two drug plans, allowing them to select a plan that suits their individual needs. Seniors are in charge, not the federal government.
The Daschle-Graham bill, on the other hand, has a one-size fits all drug plan that is offered to Medicare beneficiaries. That is the type of solution that will lead us down a dangerous path. Before you know it, the federal government, not the private market will be setting drug prices. We need to avoid that scenario at all costs.
Finally, our plan gives seniors a choice of Medicare coverage. Seniors may remain in traditional Medicare or they can opt for an enhanced Medicare fee-for-service program which is designed to look more like private health insurance and less like a program that is stuck in the mid-1960s.
We all believe that Medicare needs to be improved – Medicare has hardly changed since it was first created in 1965. Medicare needs to become a program of the 21st Century.
So our bill provides seniors with a choice in Medicare coverage – beneficiaries may stay in traditional Medicare or they may opt for the new, enhanced fee-for-service Medicare plan. I want to emphasize that we do not force seniors to enter into the new, enhanced fee-for-service plan. We just offer it to beneficiaries as an option. If Medicare beneficiaries want to stay in traditional Medicare, that is fine.
If they decide they don’t like the new enhanced Medicare plan, they can switch back to traditional Medicare. We need to give seniors choices concerning their health care coverage. They need to be able to keep Medicare benefits seniors have today, but seniors must also be given improved health care choices.
I want to emphasize, once again, that CBO tells us that should our bill become law, 99 percent of Medicare beneficiaries will have drug coverage. I believe that providing Medicare beneficiaries with their choice of coverage is key and the Tripartisan Group worked together for months to ensure that seniors get quality drug coverage for an affordable price.
Let me conclude by saying that we must make 2002 the year that Medicare is brought into the 21st Century. This is the year that Medicare reform and prescription drug legislation should be passed by the Congress and signed into law.
We can start this process by allowing the Senate Finance Committee to do its job and consider Medicare prescription drug legislation before it is debated on the Senate floor. By-passing the Senate Finance Committee and going directly to the Senate floor sends a message to the American people that we are more interested in playing political games than letting the legislative process work. We need to have a mark-up in the Senate Finance Committee as soon as possible. We have Medicare bills to consider – both the Graham-Miller bill and the Tripartisan bill. We should have our Senate floor debate after the Finance Committee has approved legislation. It should not be the other way around.
Mr. President, I am hopeful that we will be able to work this out and provide affordable prescription drug coverage for seniors through legislation that has been considered by the Senate Finance Committee. This is a top priority of mine and many of my colleagues in the United States Senate. We’ve been hearing from seniors for years about their need for a Medicare prescription drug benefit. So why are we playing political games with such an important issue?
I encourage my colleagues to work with me so that seniors will finally get what they truly deserve – prescription drug coverage through the Medicare program and bring Medicare into the 21st Century, once and for all. Medicare beneficiaries deserve that opportunity and we owe it to them.
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