Max Baucus

Mr. BAUCUS

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

Mr. BAUCUS

Mr. BAUCUS. I thank the Chair. Madam President, I wish to take a few minutes to speak about a feature of this prescription drug bill which I believe is particularly noteworthy, and that is help for low-income seniors. The subsidies provided for low-income seniors and disabled people are far more generous and much more humanitarian than many of the proposals the Senate has considered in the past. We know that most seniors who signed up for this new drug program will benefit from assistance with their prescription drug costs. Many seniors today pay thousands of dollars a year for drugs. That is common knowledge, and that is a substantial expense to them. It is to everybody, but particularly seniors and particularly low-income seniors. For 40 percent of our seniors who make less than $15,000 per year, the prescription drug coverage provided by this bill will be truly lifesaving. That is, 40 percent of our seniors make less than $15,000 a year. We have all heard stories about poor seniors who eat less so they can pay for their prescription drugs or who take only half the dosage the doctor recommends. I have seen that. I worked at a drugstore one day. I was really quite taken aback by the number of times the elderly would walk up to the pharmacist and quietly ask the pharmacist whether they could cut back on their prescription because they could not pay for it all, and they and the pharmacist would go into a little huddle as to which drugs to take and which ones not to take. I have seen it firsthand. A lot of us have heard a lot about this. We have heard about patients with disabling illnesses who cannot afford the expensive drugs that might slow the progression of a dangerous and unpredictable disease. It is clear, 40 percent of our seniors are making less than $15,000. That has to tell us it is a huge problem we have to address. This bill will give some hope to those folks. The bill is an improvement, as I mentioned, over last year's bill. Last year, that bill gave seniors generous assistance with cost sharing but up to a point. Once the low-income senior hit the so-called benefit gap--that is the donut we are talking about--the bottom fell out of the low- income safety net. Seniors who could hardly afford food and rent would have to be responsible under that bill for half the cost of their drugs, a cost that most obviously could not be assumed. By some estimates, 30 percent of low-income seniors would fall into this gap. In the bill before us, low-income seniors remain much better protected in this so-called gap. They pay higher cost sharing in the benefit gap, but their out-of-pocket expense would never go more than 20 percent above the cost of drugs, and for the lowest income seniors who are not eligible for full Medicaid benefits, cost sharing would not go above 10 percent. I think this is a good improvement. I am also proud the chairman of the committee, Senator Grassley, and I have been able to increase the number of low-income seniors who will benefit from the extra subsidies. Our bill will provide assistance for Medicaid beneficiaries up to 160 percent of the Federal poverty level. An amendment was offered in committee to raise the poverty level to 160 percent. I wish it could go higher, but we are somewhat limited by the $400 billion we are working with in the entire bill. But at least we are up to 160 percent of the Federal poverty level. That means beneficiaries with an annual income of barely over $14,000--that is because they are not within 160 percent, just slightly over--are still struggling to provide for life's basics. Perhaps one of the most important improvements in this bill is the assistance it provides for low-income seniors without subjecting them to assets tests. Asset levels for elderly Medicaid beneficiaries and so-called QMBs and SLMBs are very low. Those are categories depending upon the percentage of poverty, so that if an individual has accountable assets of over $4,000, they are not eligible for assistance. A couple with assets over $6,000 is not eligible for assistance. These asset levels, which are based on SSI eligibility standards, have not been adjusted since 1989. Asset tests exclude millions of poor Americans from Medicaid, and they would have excluded millions of poor seniors from many of last year's prescription drug subsidies. Think of it, an 80-year-old man with $800 a month in income might not be eligible for any assistance if his brother left him, say, a $10,000 car in his will. If he is married and he has paid life insurance premiums his whole life, the policy could prevent him from getting help with prescription drug benefits. This proposal includes a subsidy category that is based only on income, not on assets. It is not as generous as the asset-tested categories, and I wish we could improve that, but it takes an important step toward covering more needy seniors and allowing them the dignity of keeping a car or a single precious heirloom. We could do more if we had more money, but we do not have more money. We could eliminate the asset test altogether. We could provide better subsidies in the donut. We could provide more help to people who are still in need but who make $15,000 or $18,000 per year and have high drug costs. Nevertheless, I am proud of the progress we have made over last year's low-income proposals, and I suspect with each new chapter in this prescription drug/Medicare book, we are going to be able to make improvements along the way. This bill is a major improvement over current law. It is a major improvement over the low-income provisions in last year's bill. I urge this body to adopt this proposal. I yield the floor.

Mr. BAUCUS. Madam President, I see the Senator from Missouri in the Chamber. He wants to speak next. For the information of all Senators, I think we are going to get an amendment offered on the floor shortly. But the sponsor of the amendment has only a very short time that he can be in the Chamber. I urge my friend from Missouri to remember that brevity is the soul of not only wit but sometimes persuasion.

Mr. BAUCUS. Madam President, I apologize to my good friend from Missouri. It turns out that the Senator who is going to offer the amendment is not able to do so at this time.

Mr. BAUCUS. Reserving the right to object, I suggest the absence of a quorum.

Mr. BAUCUS. Mr. President, I yield 5 minutes to the Senator from Michigan.

Mr. BAUCUS. Mr. President, it goes without saying we live in a very complicated era. That is especially true with prescription drug pricing, health care costs, new technologies, and new health care technologies. You cannot turn on the evening news without seeing a new technology, some way to help people lead higher quality lives, and you cannot turn on the TV without seeing an ad where essentially a prescription drug is being advertised as a new drug to help make people's lives better. It is very hard for people to know what to believe. It is also very difficult to know just what the right policy should be in Congress with respect to prescription drug benefits, more particularly what prices people should pay for drugs, and that is why we have deductibles, copays, and catastrophic coverage, and also what price Medicare should pay to the prescription drug companies when seniors are receiving benefits for drugs, and what the subsidy would be. It is not easy. I commend the Senators who put together this amendment because this amendment says: OK, the brand-name drug companies, the pharmaceuticals have their patent protection, and there is a good reason for patent protection: Because it takes a long time to develop drugs, and it is expensive. But there comes a time when enough is enough, when 17 years--I think that is the number of years of patent protection--is enough. Over the years, some of the drug companies have been able to prevent competition from working; that is, the generic companies come along to produce basically the same product, since the patent expired, but they are, in effect, denied the ability to sell at the much lower price because pharmaceuticals have multiple 30-month periods of stay. I am not saying this bill is perfect, but it is a great advance in helping beneficiaries and in helping the Federal Government get the best price, get the best buy for the drugs that are on the market that senior citizens are going to utilize and buy, one way or another, and Uncle Sam is going to buy. I highly compliment the authors of this legislation. We will see how well it works. My guess is it is going to work pretty well. There are many efforts, Mr. President, as you know, around the country; many States are figuring out ways, with volume purchasing, to get lower prices for prescription drugs under the Medicaid program. We do not want to kill the goose that lays the golden egg. The pharmaceuticals have provided our people with wonderful drugs. There is no getting around that. At the same time, everybody wants to get as much as he or she can for themselves--not everybody but a lot of people do. Certainly, in our competitive capitalistic system which works pretty well, companies are concerned about the bottom line, shareholders, quarterly reports, so they are going to try to make as much money as they can for the shareholders, and that is their responsibility. In so doing, brand-name companies have taken advantage of the patent, taken advantage of current law. They have found a loophole, and this legislation is designed to close that loophole, so that after 17 years and the patent period has expired, companies can offer generic drugs, lower-priced drugs. That makes the most sense once the patent period has expired. It is going to help. This is a bill which has many different provisions. It is very complicated. We are entering a whole new era of prescription drug benefits and a whole new way to get them out to senior citizens through Medicare, through private plans, through PPOs, through HMOs, and trying to find the right balance between value for beneficiaries--that is stability, so our senior citizens know what they are getting on the one hand and efficiency on the other; that is making sure it is the lowest price possible. This amendment before us does a pretty good job in striking that balance; that is, efficiency as a lower cost to seniors and the Federal Government because of generics, and also stability because it is done in a way that seniors have a better idea what they are getting. I commend the Senators, and I yield the floor.

Mr. BAUCUS. Reserving the right to object, I wonder if we could get some time to explain the amendments. The second two votes will be 10-minute votes? I ask consent they be 10-minute votes, not the ordinary 15.

Mr. BAUCUS. Mr. President, how much time remains on both sides?

Mr. BAUCUS. Mr. President, I just want to inform my colleagues that this is a balanced bill. It has been very difficult to achieve that balance. I fear it is becoming more fragile as the days pass by. I think it would be very unfortunate if this bill fell apart. I am not saying, by any stretch of the imagination, that the amendment offered by my very good friend from South Dakota is going to tip the balance of the bill, but I am saying--knowing of other amendments that are coming up, and the views that various Senators are taking on the amendments they may offer later on--this balance, this bill which I think we all want to support, is not in jeopardy yet but it is somewhat tenuous. There are protections in the bill for premiums. A couple quick points: One, under the bill, there are large geographic areas, which will tend to force the premiums to not fluctuate but to be according to insurable principles. Second, there are very strong consumer protections that are basically the FEHBP protections which provide premiums have to be in line with benefits. That is under FEHBP. We incorporated that in the bill. There is also a geographic adjustment in the bill. Right now, the Secretary has discretion to make the geographic adjustment. That might be strengthened later on in the proceedings. I am sympathetic with the purpose of this amendment, but my judgment is, at this time, we should not adopt this amendment because there are sufficient protections in the bill, and I do not want this bill--I do not think any Senator wants this bill--to go south because of other amendments that may be adopted that may cause that to happen. This is a historic moment. We are on the eve, the cusp of passing prescription drug benefit legislation. We should not take that lightly. I know we don't. I think we want a big vote. Medicare passed by a large margin back in 1965. Many Senators are saying there is a chance this underlying bill could get 60, 70, 80 votes. I say to my colleagues, I think we owe it to ourselves to try to find a way to help pass this legislation by a large margin.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, if I understand the drift of things, obviously Senators can reserve, we can work this out. I ask consent that the Senators from New Jersey be given 10 minutes to speak on a very important subject; following that, the Senator from North Dakota be authorized on his amendment to follow the order in the earlier unanimous consent.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, I don't see any more speakers who wish to speak on the second-degree amendment. Am I correct in suggesting that the regular order is now to vote on the second-degree amendment?

Mr. BAUCUS. Mr. President, I think we are ready to vote. Amendment No. 947

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

Mr. BAUCUS

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

Mr. BAUCUS. I suggest the absence of a quorum.

Mr. BAUCUS. Mr. President, we are now on the Enzi amendment. I ask unanimous consent that the Enzi amendment be temporarily set aside so that at 4:20 the Senate can proceed to an amendment offered by the Senator from New Mexico, Mr. Bingaman.

Mr. BAUCUS. I also ask that there be 30 minutes on that amendment equally divided in the usual form.

Mr. BAUCUS. Mr. President, first, I congratulate the Senator from Michigan. She has worked very hard and, I might add, effectively in helping make this a better bill. Everyone in this body wants legislation passed that gives good, solid prescription drug benefits to seniors. The debate is somewhat over delivery; that is, how we set the plan up, who provides the benefits and so on. The bottom line is the same for all of us. We want good, solid prescription drug benefits for seniors. The Senator from Michigan is probably as well-versed in this subject and more of an advocate for seniors than any other Member of this body, or at least as much as any other Member of this body. I thank her very much for what she has done. The issue basically is that we have roughly $400 billion to spend over 10 years, and the question is how we best assure that seniors get those benefits. Now, $400 billion over 10 years may sound like a lot of money to some folks but when it is cranked out in terms of deductibles, copays, premiums and benefits, it is really a modest benefit for seniors. It is not a lot of money. Some other programs give much more generous prescription drug benefits than is called for under this legislation. For example, under TRICARE, that is the military plan, military retirees receive substantially more benefits than are called for under this bill. The same is true for the VA. If the U.S. Government, under this legislation, were to provide the same benefits for seniors generally that the military does under TRICARE, this bill would not be $400 billion, it would be upwards of $800 billion to a trillion dollars, which gives one a sense of the difference. The VA's benefits are greater. The Federal Employees Health Benefits Plan, FEHBP, provides drug benefits that are greater than called for under this bill. I mention that so the expectations are not raised too high that this legislation is going to be the be-all and end-all, that it is going to help seniors with all their drug expenditures. It will not, but it is a first step. It is a major advancement in helping seniors get their prescription drug benefits. There will be many bills later on in the next several years as we address ways to improve our health care delivery system generally, on how we can help improve prescription drug benefits to seniors more specifically, but we are operating under a bit of a constraint and the constraint is $400 billion. That is what we in the Congress agreed to, $400 billion on the Senate side for prescription drug benefits for seniors. Under that constraint, we have to work very hard to try to achieve some balance. One goal is stability, another is efficiency. What do I mean? Under stability, we clearly want this program to be as stable as possible so seniors know what they are getting for the premiums they will be paying. This is a voluntary program. Seniors are not required to sign up. What we want is a stable program. We do not want a program that is changing a lot. That is unsettling to seniors. We also want to achieve efficiencies. By that I mean lower some costs. The Medicare Program is growing exponentially. We all know that not too many years from now, when the baby boomers start to retire, we are going to face some significant challenges on how we address Medicare payments generally, which certainly will include some prescription drug benefits. We want to try to cut costs, and the idea that a balance is struck between stability and efficiency is essentially one where both private plans and the U.S. Government participate. I strongly wish we were able to have more dollars to spend so we would have more stability and have a program that more closely resembles the military's TRICARE plan or the Federal Employees Health Benefits Plan or the Veterans' Administration plan, and even some private plans, but we do not. We are taking this steadily, a step at a time. The Senator from Michigan has a good idea. Her idea is that in the interest of stability, as opposed to efficiency, that any senior would have the right to participate for life in the Government-sponsored plan as opposed to the private sector. We in the Finance Committee have labored mightily to try to find the right balance, and the right balance is not easy to find, I must say. We have Senators from one side of the spectrum and Senators from the other side of the spectrum bending my ear and bending the ear of the chairman. Quite often, our ears are bent so much we wonder if there is any rubber left in them. We have been talked to. I have been talked to very much by the wonderful Senator from Michigan about her amendment. If I had my druthers, it would be something I would prefer, but we are a bit constrained. I do not know that I can support the amendment for that reason because we are trying to keep a balance. I do want to highly commend the Senator for the great effort she has undertaken. She has clearly helped advance the ball in many ways. She will continue to advance the ball, there is no doubt in my mind. She is a great Senator for the people of the State of Michigan. I yield the floor.

Mr. BAUCUS. I thank the Chair. Mr. President, pending 4:20, when the Senator from New Mexico will offer his amendment, I rise to speak about the rural provisions in the Medicare bill. This bill has a lot of provisions to help rural America. I am very proud of these provisions. I also wish to compliment the chairman of the committee, Senator Grassley. Over the last year, he and I have jointly co-authored legislation to address the imbalance in Medicare payments that exists between rural and urban areas of our country. For many rural areas of our country, providing health care services is very challenging given Medicare's current payment rates. In rural America, Medicare often dominates. That is, most hospitals, doctors and other health care providers receive the lion's share of their reimbursements from Medicare. I know that in many communities in Montana, particularly the smallest communities, Medicare accounts for over more than 50 percent of hospitals total reimbursements. This share is also as high in some larger towns, but certainly more the case in smaller towns. Rural hospitals are often the major employer in their communities. It is what makes the small town tick. If it were not for the rural hospital, the population in those towns would deteriorate. I have seen that happen in a good number of communities in Montana, where the hospital--fewer than 20 beds in many cases--is the major employer in the town. Once Medicare payments start to decline significantly, as is the case in many areas, that smalltown hospital has to close up, or converts to what is called a critical access facility and is no longer the full service hospital it was. So it is very important that rural America be adequately reimbursed under Medicare. In addition to Medicare reimbursements, I believe we have also provided assistance to rural areas with respect to our proposed drug benefit. I believe that the drug benefit outlined in this bill will work for rural America. For example, if private drug-only plans do not materialize, our bill provides for a hard and fast fallback, a Government guarantee for rural seniors. This guarantee is important because many rural States have had an unfortunate experience with Medicare+Choice, the program that currently allows private health plans to participate in Medicare. But because there are so few people in rural America, HMOs and other Medicare+Choice plans, have found it too difficult to operate and have withdrawn. I do not have the figures with me off the top of my head, but there are thousands of people in rural areas who once had access to a Medicare+Choice plan but no longer have that opportunity because the areas are just so sparsely populated for health plans to work. That is a real concern with respect to the prescription drug benefit we are providing in this bill; namely, will private drug plans, in addition to the preferred provider organizations, want to offer prescription drug benefits in rural America or not? It is a big question, and it is an unanswered question. We hope they do want to come in and participate. We hope private plans that currently do not now exist will, under the provisions of this bill, when it goes into effect in a few years, want to provide prescription drug benefits for seniors. We hope that many plans want to come in and compete with each other to help reduce costs. There is no great assurance that these private plans will reduce costs. If one looks at the HMOs, they currently are paid at a higher rate than what Medicare pays for beneficaries in the fee-for-service program. Some can make a strong argument that these private plans are going to cost more. The theory is that competition will allow them to bring down costs and provide the same benefits for seniors. So it is an unanswered question. People just do not know the degree to which these private plans are going to work. Therein lies the question: What about those parts of America where private plans do not participate? What about those seniors? How can we assure that they are going to get prescription drug benefits? The bill before us tries to address that. The bill addresses this question by providing for a guaranteed fallback plan. In those parts of the country where there are not two or more competing private drug plans, government-backed fallback plan is guaranteed. Seniors will be able to get the prescription drug benefits under pharmacy benefit manager (PMB), or similar organization that is not required to bear insurance risk. It will only be required to bear performance risk for the administrative costs of providing the benefit. The fallback plan will not bear insurance risk as required of the private drug plans. The purpose of the fallback plan is to make sure that rural America-- in fact, any part of America where there are not two private plans--is served fairly by this prescription drug program. As I mentioned, the bill includes many provisions to address the current imbalance in Medicare reimbursements between urban and rural America. One provision would correct differences in the standardized amount rate for inpatient hospitals. The standardized amount is higher for urban hospitals than for rural hospitals. The provision says that Medicare should pay the same across the board. Clearly, there will be other adjustments that affect different circumstances and different parts of the country, but the standardized amount would be the same rate for both urban and rural hospitals. That is extremely important to many hospitals in rural areas. Last year's appropriations bill equalized the standardized amount for a 6-month period. This bill makes that permanent. It is a change that the Medicare Payment Advisory Commission, or MedPAC, has recommended that Congress make. This bill this and other MedPAC recommendations to heart by saying, You are the experts, you know better what is going on than anyone else. This bill contains a couple of other important MedPAC recommendations. For example, it raises the Medicare disproportionate share threshold for rural hospitals. The Medicare DSH program says if you are a hospital and have a disproportionate number of people under Medicare who are low income, you should receive extra assistance under Medicare. Our bill raises that threshold for rural hospitals a little higher. The bill also adjusts payments for hospitals with very low patient volume. We know volume is a big component of whether a hospital is able to make ends meet. The bill extends the rural home health add-on payment at a level of 5 percent. Home health care is extremely important in rural America. This bill includes other provisions that not necessarily rural specific. For example, the legislation increases payments to dialysis providers, including those in urban areas, for a 2-year period. The bill provides desperately needed assistance to urban hospitals that provide a disproportionate share of services to low income individuals. These hospitals are struggling with growing pressures of more uninsured and low income patients. It is not fair for those hospitals that have to bear these costs. They have to provide charity care. In fact, in many respects under the law they are required to. This gives them a bit of a break with these burdens and their nursing shortages The bill provides much-needed regulatory relief for both rural and urban hospitals. We have heard from doctors and hospitals that say the carriers and fiscal intermediaries are too heavy-handed; they assume physicians and providers are guilty when they question reimbursement, instead of assuming we are innocent. The regulatory relief measures in this bill address this concern. These provisions are significant and go a long way to assure providers spend less time on paperwork burdens and more time with their patients. Some may say that this bill does not go far enough to relieve these burdens. A lot of doctors and hospitals administrators will say: Gee, why all this Medicare paperwork? We want to spend time with our patients. Nevertheless, the regulatory provisions of this bill will reduce paperwork and unnecessary regulation. I realize there are a number of provider provisions--with respect to doctors and hospitals and other providers--that are not addressed in this bill. These provisions include payments under the Medicare physician fee schedule, which will be cut in 2004 through 2007 unless further congressional action despite an additional $54 billion in the bill we passed earlier this year. We recognize the need to address these impending cuts in the future. Physician's fees are projected to drop significantly. We cannot address that in this bill. We do not have the money. That is a problem we will have to face in 2004. I alert Senators, that will be expensive. We will have to deal with it. There are also Senators who want to address what is called IME, or indirect medical education. This is the special payment adjustor under Medicare for teaching hospitals. It is now currently reduced to its lowest level ever. That is, teaching hospitals are receiving less to help train physicians across the country. That is a concern many have. We are going to try to deal with that as best we can as this bill progresses. Nursing home payments are not addressed. Many Senators have talked about addressing some of the problems facing nursing homes. They, too, experienced a sharp reduction in payments over in 2003. This list of payment provisions is not limited. There are several other provider provisions about which many Senators have raised concerns. Our ability to deal with these additional issues is limited. Why? Because this is a $400 billion Medicare package. The fact remains, this is a package of relatively sparse drug benefits. Yes, $400 billion sounds like a lot of money, and it is. But $400 billion extended over 10 years, means that we have to carefully consider what the amounts should be for the deductible, copayments, and the premiums. The numbers are OK, but they are not great. I don't want to oversell this bill or over promise. This legislation is a step in the right direction. This is a good first chapter. It is a start in providing prescription drug benefits for seniors. We only have $400 billion so we have not been able to address these other provisions. We would like to. We would like to find a way to deal with them. But at this time, the dollars are simply not there. I might add, we will do what we can in future days, weeks, and months to try to address these concerns. I know the chairman of the committee, Senator Grassley, wants to work with our colleagues to address these provisions and also provide a fair deal for rural, as well as urban, folks in America. We want to address future geographic inequities with respect to the drug benefit. The fact is, rural States are very concerned if we enact this prescription drug benefit, are going to come out on the short end of the stick. More federal money will end up going to go to urban seniors. That will cause a great problem. At the same time, seniors in urban areas are afraid the money will go to the rural areas, that the urban cities will end up on short end of the stick. The fact is, we do not know how it will work. We just don't know. Senator Snowe offered an amendment in the Finance Committee for a study to address possible geographic inequities in drug spending across the country. She later amended it, made it a little stronger, to say that HHS will have the discretion to address any geographic inequities. There may be an amendment on the floor to require the HHS Secretary to address the inequities. It is a point about which we are all very sensitive. We are trying to find a way to make this geographic adjustment process work. Geographic adjustment for drug spending has never been tried before. It is uncharted territory. We just don't know. It probably makes sense the Secretary have discretion. That is a short summary of some of the rural provisions in the bill. I see the Senator from Texas is on the Senate floor. Does the Senator from Texas wish to speak at this point? I yield the floor.

Mr. BAUCUS. Madam President, if I am not mistaken, the pending amendment is the one offered by the Senator from Michigan. I see the Senator from Florida, Senator Graham, who would like to address the Senate.

Mr. BAUCUS. I move to lay that motion on the table. The motion to lay on the table was agreed to.

Mr. BAUCUS. Mr. President, I withdraw the second request. So the only request pending, which I think the Chair has ruled on favorably, is that we go to the Bingaman amendment at 4:20.

Mr. BAUCUS. Mr. President, first I very much appreciate the kind words by the chairman of the committee. It is wonderful working with the Senator from Iowa. He is a good man. With respect to the point made by the chairman, I agree. I think it makes sense at this time, since we are still trying to get papers ready, for the Senator from Idaho to proceed.

Mr. BAUCUS

Mr. BAUCUS. Mr. President, let me begin by praising the chairman of the Senate Finance Committee, Senator Chuck Grassley, for his fine leadership and cooperative management of this bill. He has been very good. I know the folks in Iowa know that, but I want everybody else tuning in to know it as well. The chairman of the Senate Finance Committee, Chuck Grassley, has done a tremendous job. He deserves a lot of praise for this bill. On that point, sometimes we fail to recognize just how historic some legislation is. This is truly a historic bill. This is not some garden variety piece of legislation that has come up and will pass in the Senate. This is a major expansion of Medicare--major. It is going to make a huge difference in the lives of many senior citizens in America. I again thank Senator Grassley for his help putting this together. I also thank many Senators who have helped bring us here today. Senator John Breaux from Louisiana has been tireless in his effort on the Medicare Commission and other efforts to get prescription drug benefits and to try to reform Medicare. His work has been indispensable. Senator Olympia Snowe from Maine, Senator Hatch from Utah, Senator Jeffords from Vermont, have all contributed mightily to these efforts. It would take me a long time to go through all the efforts they have undertaken if I were to recite chapter and verse all they have done. It has been monumental. Any discussion for the long struggle for improved health care in America would be absolutely incomplete without the mention of the longstanding effort of the Senator from Massachusetts, Mr. Kennedy. Senator Kennedy is on the floor. He is probably going to speak a little later. Without Senator Kennedy and his efforts, I am not so sure we would be here today, on cusp of passing truly historic legislation. We are here today to make a meaningful improvement in health care for our seniors. That is why we are here. We are here at last to bring prescription drug coverage to Medicare. On July 30, the Nation will celebrate the 38th anniversary of the enactment of Medicare. Without exaggeration, Medicare is simply one of the most successful enterprises ever taken by a free people working through their government. Today we are about the business of making it even better. Medicare took a long time in coming. Following the enactment of Social Security in 1933, progressives called unsuccessfully for a program of national health insurance. President Harry Truman repeatedly advocated national health insurance funded through payroll deductions, but as we know, his plan went nowhere. But the fact remains, retired Americans had a particularly difficult time getting health insurance in the private sector. In 1951, planners at the Federal Security Agency, recognizing that difficulty, examined extending health insurance to this population. The idea slowly gained popularity in the 1950s. Senator John Kennedy raised health care as a campaign issue in his successful 1960 Presidential campaign. Taking the reins of the Presidency from his fallen predecessor, President Lyndon Johnson spoke of moving, ``not only toward the rich society and the powerful society, but upward toward the Great Society.'' At the height of legislative action of President Johnson's Great Society in July 1965, Congress enacted Medicare into law in the Health Insurance for the Aged Act. With President Truman at his elbow, President Johnson signed the bill in Independence, MO. President Johnson at that time said, ``No longer will older Americans be denied the healing miracle of modern medicine.'' And President Truman told President Johnson, ``You have made me a very happy man.'' Since then, over the nearly four decades of its life, Medicare has improved the lives of over 100 million Americans. Medicare now provides health insurance coverage to more than 35 million seniors, virtually everyone aged 65 or older, and 6 million disabled enrollees for hospital or related care under the Hospital Insurance Program. It covers nearly as many for doctors' services, outpatient hospital services, and other medical expenses under the Supplemental Medical Insurance Program. Medicare has been a success. Health care expenses used to impoverish seniors. In conjunction with Social Security, Medicare has significantly reduced poverty among seniors. Despite progress on poverty among seniors, they are by no means an affluent group. From 2001 data, we can see that nearly two-thirds of Social Security beneficiaries rely on Social Security for most of their income. A third of beneficiaries rely on Social Security for 90 percent or more of their income. In 2001, the median income for all eligible households was $19,000, and one-fifth have incomes under $10,000; thus, vast numbers of America's seniors need Medicare and Social Security to keep out of poverty. With the nearly universal health insurance coverage and decreasing poverty achieved by Medicare and Social Security, seniors are also living longer. Before Social Security and Medicare, in 1930, for example, a 60-year-old had a life expectancy of 77 years of age. In the year 2000, 70 years later, a 65-year-old-man could expect to live to 81 and a 65-year-old woman could expect to live to 84. Partly because of Medicare, more and more Americans are living into their late eighties and into their nineties. Medicare has also improved the quality of seniors' lives. It has helped them to combat debilitating illnesses. It has helped them be free from pain. It has helped them to live fuller, better lives. But the practice of medicine has also progressed since Congress set up the structure of Medicare. Prescription drugs have taken on a much greater role in maintaining health, replacing procedures, as has more prevention. Prescription drugs are just proportionately so much more important today than they were when Medicare was created. The Congress that created Medicare did not envision that role of prescription drugs. Although former employers and other private insurance plans cover some seniors, about 10 million seniors have no prescription drug coverage at all. Because seniors are not a wealthy group, for many this reality means a painful choice between filling their prescriptions and buying food. I visited a community health center and talked to an internist--a doctor--the administrator of that health center. She told me she had to cut back on her medicine. She has to give up some of her medicine. Why? In order to pay for the medicines for her mother. Just think of it. A doctor who has to cut back on medicines for herself because they are so expensive and because her mother can't afford them. The doctor is sacrificing her health care to make sure her mother has prescription drug benefits. That is not an isolated incident. It is happening over and over again in America, and it is wrong. Seniors should not have to choose among necessities in order to maintain their health. We can do something about that today. To maintain Medicare's success, we must expand it to address the health care delivery structure that we have today. The bill that we bring to the floor would take a substantial step in that direction. This bill would make available Medicare prescription drug insurance universally to all seniors. It maintains the important principle of universalism that has held together the remarkable social compact of Medicare and Social Security. This bill would ensure that 44 percent of Medicare beneficiaries-- those with the lowest incomes--would have truly affordable prescription drug coverage with minimal out-of-pocket costs. For these lower-income seniors with incomes up to 160 percent of the poverty level, co- payments would never exceed 20 percent of the cost of drugs. Just think of that--never more than 20 percent. This bill would make it so that an elderly retired couple in Great Falls, MT with an income of $16,000 a year, would be able to buy their prescription drugs without ever having to pay more than 10 percent of the cost of the drugs. This bill would thus ensure that those who have been least able to receive what President Johnson called ``the healing miracle of modern medicine'' would now be able to do so. Millions of people would have a better quality of life. Lives would be saved. This bill would create a strong government fallback. Seniors would have access to at least two private plans for a prescription drug benefit or the government would provide a standard fallback plan. If there is no true competition, then traditional Medicare would provide a fallback. Now some have raised fears that the competition that this bill seeks to foster would lead to the privatization of Medicare. This is not so. The Department of Health and Human Services would continue to oversee these plans. The plans would operate within tightly-controlled limits. This bill includes strong consumer protections. This bill does not tilt the playing field. This bill does not make private plans a better deal than traditional Medicare. But those of us who believe in traditional Medicare should not fear the entry of private options. For either they will work and make things better for beneficiaries, or traditional Medicare will still be there. It is another opportunity. Either private plans will deliver the efficiencies that their advocates on the other side of the aisle promise for them--in which case the beneficiaries who choose them will get more value for their contributions--or traditional Medicare will still be there. Others have found fault with the costs that this bill would ask beneficiaries to pay. Some have focused on what they call a break-even point--of a little more than a thousands dollars in drug spending-- below which higher-income beneficiaries would spend more on the plan than they would receive in benefits. Yes, from a third to half of beneficiaries might spend more in a given year than they receive in benefits. But that means that from half to two-thirds will get more in benefits than they spend. But it should not be surprising that some will pay more in premiums than they receive in benefits. That is the nature of insurance. We pay for insurance to protect against the risk of something that we hope will not happen. Most of us would be thankful if we do not encounter the ailments that require us to use our health insurance. Many would count that a blessing. But this bill would provide a substantial subsidy for the health insurance need of Medicare beneficiaries. That is the nature of the cost of this bill. We as a society are choosing to make this insurance available at a substantial subsidy to all seniors. For millions of Americans who are less fortunate, who have lower incomes and health needs, this bill will make a dramatic difference. For the 44 percent of Medicare beneficiaries with lower incomes, this plan would provide very affordable benefits. And remember that this lower-income population includes precisely the group most likely to be doing without prescription drug coverage today. I acknowledge that some may have legitimate concerns with this bill. I note, in particular, that I and other drafters of the bill have become struck by CBO's high estimate of the percentage of beneficiaries whose former employers would drop their coverage, if Medicare started providing it. I would also like to find a way to make it so that seniors who were in a fallback plan could stay with that plan longer. I, for one, will look for opportunities during this process to address these concerns and improve the bill. But this bill would create a $400 billion expansion of a major entitlement program. Yes, we could have done more with more money. But this is a historic opportunity to make a fundamental change for the better, for millions of Americans. In so doing, this bill would finally do something that the overwhelming majority of industrialized nations have already done; that is, provide prescription drug benefits to their seniors. Medicare took a long in coming. But it came quickly when it did. Sometimes, the time is simply ripe. The Health Insurance for the Aged took several decades to come to the Senate floor in 1965. But when the Senate took it up in 1965, it finished its debate in 4 days--July 6 through July 9 of 1965--and passed the bill with 68 votes. Starting today, we will spend 2 weeks on this debate. And we should. And I look forward to a full and open airing of the issues. But in the end, I also look forward to passage of this new benefit, with substantial support from both sides of the aisle. The time was ripe in the summer of 1965, when Congress enacted the Health Insurance for the Aged Act and created Medicare. I believe that the time is ripe again, today. The time is ripe for a new chapter in the successful story of Medicare. And we begin that chapter today. I yield the floor.