Debbie Stabenow

Ms. STABENOW

Ms. STABENOW. I don't see anything in here that brings it down. In fact, what we are doing in the underlying bill is adding the profit. We are putting for-profit business into this process, so you are actually adding to the cost of this system. I don't see anything in here that will bring prices down. I think that is why the pharmaceutical industry is very supportive of this plan because, unfortunately, the average retail price of an advertised brand is going up three times the rate of inflation. This does nothing to address that and bring the prices down.

Ms. STABENOW. Madam President, I appreciate those who are cosponsoring my amendment and have joined with me. I ask unanimous consent that Senator Lieberman's name be added as a cosponsor to the amendment.

Ms. STABENOW. Mr. President, first of all, before explaining the amendment, I commend my colleagues for their leadership on the Finance Committee. They have been working very diligently--the chairman, Senator Grassley, and the ranking member, Senator Baucus, and members on both sides of the aisle. I commend them for bringing forward one of the most critical issues affecting American people, American families, American seniors today. While we may disagree on specifics and on what is the best approach, I very much commend them for giving us the opportunity to debate this critical issue and for the hard work that has gone on, on both sides. My amendment is a simple one. It would provide another choice of prescription drug plans for seniors on Medicare. In fact, it would provide the choice the majority of seniors want to make on Medicare. The underlying bill allows seniors to choose a prescription drug plan, but only if the plan is one offered by a private insurance company. My amendment simply allows seniors to get their prescription drugs through the Medicare Program. It is creating one more option. The legislation before us tries to expand health care choices for people on Medicare. Regrettably, it does not provide the full range of choices for seniors. Without my amendment, we are not in fact providing the full range of choices, including the one for which the seniors are asking. My amendment will allow seniors the choice to get their prescriptions filled within traditional Medicare, to choose a private prescription drug plan, or enroll in a PPO or an HMO. This range of choice will foster competition among the different plans and allow our seniors to make the best possible choice for themselves. This amendment puts all of the plans on the same footing and does not favor one over the other. I think it is also important to note that the private plans described in the bill don't exist today. In fact, Robert Reischauer was quoted recently in the New York Times saying, ``Private drug-only plans don't exist in nature.'' They don't currently exist in nature. So we are designing a system around plans that do not currently exist. Medicare does exist. A Medicare plan is one that we know we can put together and that seniors can count on, at the same time giving the opportunity for new plans to be created, as well as the structures of HMOs and PPOs. I also think this plan could actually save the Federal Government dollars, and certainly the record would reflect that. There is ample objective evidence that providing health care through the Medicare Program is more efficient than through the private sector. This is one area where the evidence is clear, based on various points of information. Let me just share some with you. On May 5, 2003, the New York Times reported on findings by MedPAC, our own nonpartisan advisory plan. MedPAC discovered that private health plan fees are about 15 percent higher than Medicare. The Center for Studying Health Systems Change has also made similar findings. So we know that if we go to private plans, on average, services will be about 15 percent higher--more costly for fees for services. Surgeries, they found, were about 26 percent more. Radiology was about 19 percent more. Hospital and nursing home visits and consultations were 9 percent more. On average, we know it doesn't in fact cost less to provide services to private plans. Independent, nonpartisan organizations have found that it in fact costs more. Also, using private plans would likely cost additional dollars. In the year 2000, our own General Accounting Office estimated that payments to Medicare+Choice plans--and those are the Medicare HMOs that were set up in 1997--exceeded the costs that would have been incurred for treating patients directly through traditional Medicare by an annual average of 13.2 percent. So, again, we have a situation where our own nonpartisan, objective General Accounting Office said that providing services through Medicare HMOs actually cost, on average, 13.2 percent more than the same service offered under traditional Medicare, where seniors get to select their own doctors and have the dependability of knowing that Medicare will be there. Thirdly, private plans are not necessarily more efficient than Medicare. The inspector general of the Department of Health and Human Services found that HMOs that contract with Medicare, on average, spent 15 percent of their revenue on administrative costs rather than on health care. In fact, we know those numbers can be even higher in other private sector plans. Dollars have been put aside in this plan to cover higher administrative costs. Some managed care systems spend as much as 32 percent of their revenue. That means that for every precious dollar we have that we want to help seniors pay for their medicine, about one- third of that could go to administration. By contrast, the Medicare plan spends only 2 percent of its budget on administrative overhead. On average, a private HMO--and we realize more plans are being developed under this proposal than just HMOs, but if we look at what we have to go on in terms of the differences, it is 2 percent administrative costs under Medicare and an average of 15 percent for HMOs. And we know that in some areas, in fact, it is even higher administrative costs for other private insurance plans. Furthermore, the enrollment experience with private plans in Medicare has certainly not been stellar. In the past 5 years, 2.5 million seniors have been dropped by their Medicare HMO. As I have indicated before, one of those in fact was my own mother in Lansing, MI, who had a very positive experience under a Medicare HMO. But the decision was made, for financial reasons, to no longer cover Medicare recipients. She lost her plan and her doctor, and she was left to figure out how else she would be receiving care under Medicare. In 2002, three plans in Michigan dropped out of Medicare+Choice altogether, while two dropped significant numbers of enrollees. More than 31,000 seniors in Michigan have been dropped just since 2002. What does that mean in real terms for people? It means that they went into a system, they had a doctor, they were within a certain kind of health care system; then the private managed care plan decided to pull out, and they were then left to go find another plan, actually another doctor, and another way of providing health care. Only 8 of 83 counties in Michigan now have private Medicare HMO plans, and all of them are concentrated in one area, southeastern Michigan, around metro Detroit, which means that those in the Upper Peninsula of our State don't have that choice. I expect it would be very difficult for them to find a private sector plan, even into the future, in northern Michigan, the Upper Peninsula, or the west side of the State. Right now, the only option is obviously around metro Detroit. None of the remaining Medicare HMOs in Michigan is accepting new enrollees. One Michigan provider even chose to pay a $25,000 fine to get out of Medicare+Choice and stop serving seniors immediately rather than go through the official withdrawal process. That requires more than 3 months of notice of intent to withdraw. By pulling out immediately, this plan left our seniors in the lurch with very little transition time to explore other ways in order to be able to get their health coverage. Because of the poor records of the Medicare+Choice plan, almost 9 out of 10 seniors--basically 89 percent--have decided to stay in traditional Medicare. I believe they ought to have the choice to do that. That is what my amendment is all about. It is saying to those right now who have had a choice of a private managed care plan or traditional Medicare since 1997, who have chosen to stay with traditional Medicare, to choose their own doctor, to know that regardless of where they live they will have the dependability, the stability of Medicare, it will be there for those individuals who have chosen overwhelmingly to stay in traditional Medicare--89 percent. Any one of us would love that kind of a percentage when people are choosing in an election. Eighty-nine percent of the seniors today have said they want traditional Medicare. Yet this choice they have made is not available to them if there are two or more private sector plans available in their region. Essentially, unfortunately, what the current plan says is you have made your choice; we do not like your choice; pick again. My amendment would guarantee seniors would be able to have that choice. I know some colleagues strongly believe that moving seniors into the private sector is the best way to provide them prescription drug coverage. While I respectfully disagree with this premise, I think it is a good idea to provide private sector options for those who desire them. Back to my own family, I think my mother should have that choice, and she should be able to go into Medicare+Choice or another managed care plan if she so desires. I absolutely agree with that if it works for them. The question is whether the Federal Government should force seniors into a plan, whether it is a private insurance plan or traditional Medicare. Should we be deciding what our seniors should have for their prescription drug coverage? Should we make that choice or should they make the choice? That is why my amendment is so important. It will allow seniors to choose the appropriate plan for them, not the Federal Government. I have heard a lot of arguments that we should provide seniors with the same options that Members of Congress and Federal employees have in the Federal Employees Health Benefits Plan. Under that plan, we have several options ranging from fee for service to PPOs to HMOs. If we like one of those options--and we choose that option, by the way--the Federal Government does not come in and say, If you work for the Senate, you cannot have option A, you can only get B, C, D, and only A under certain circumstances. We say here is the range of options; you select the one that works for you. If we like the one we selected, we can stay in that plan as long as we want. As long as we are covered by the Federal employees health plan, we can choose that plan. We are never forced to switch plans. Mr. President, can you imagine if we were living under the plan we are asking seniors to live under; if every employee had to switch back and forth, potentially, depending on what was offered in the private sector, rather than remaining with the plan they desired? We have never been forced to switch plans ourselves. It should be the same for our seniors. If we do not have to switch plans year to year, then seniors should not have to switch either. My guess is most of us like the plans we are in and probably want to stay with them. Certainly, if we do not, we have the opportunity to change. But the last thing we want to do is switch health plans every year or every other year and try to leaf through hundreds of pages of brochures to evaluate the benefits of a new plan. I, for one, find it is difficult to find the time to do that. I cannot imagine anyone would want the chore of going through every year or every other year all of the paperwork to figure out what is best for them, particularly if they like the plan they are in. Many seniors want stability. They seek a good, solid, guaranteed health plan where they can see their own doctors. There are some seniors who prefer to experiment with private plans, and they should be given that option. But all seniors should have all options, and that is what my amendment would do. It would make sure the choice is in the hands of our seniors. Again, this approach is within the framework of the bill. It is within the $400 billion that has been carved out within the budget resolution. It is within the framework of the benefits structure that has been designed by the committee. This amendment does not change anything other than to say every senior should have the option, as 89 percent of them have chosen to do, to not only have their own doctor under Medicare, but to have a prescription drug plan under Medicare regardless of where they live, and a plan they can count on and depend on. Again, I commend my colleagues who have been working diligently on this issue. I know it has been a challenge for everyone. I believe this amendment does exactly what the seniors of America want and allows all of us to enthusiastically embrace this proposal as being the right proposal. I hope my colleagues will support my amendment to offer one more choice to seniors. It builds on the structure of this bipartisan plan and provides more choices. I know many of us believe this bill can be improved. Outside objective critics have even used stronger language about the way this is restricted in the bill. For example, former CBO Director Robert Reischauer said: The benefit is rather skimpy and has a bizarre structure. It is an insurance structure that exists nowhere in the private sector or in nature. Through this amendment we will have a structure that makes sense, that is dependable, that is explainable, that is simple and straightforward, that provides all range of options to seniors so they can decide what it is they wish to do in terms of prescription drug coverage. Mr. President, I have a letter from the National Committee to Preserve Social Security and Medicare. I will read a portion of it: On behalf of the millions of members and supporters of the National Committee to Preserve Social Security and Medicare, I am writing in support of your ``Medicare Guaranteed Option'' amendment to S. 1. Since the current Senate prescription drug bill, S. 1, wants to offer seniors choices, your amendment would offer seniors real choices because they would have the choice of what they really want, which is a defined benefit under Medicare. I ask unanimous consent that this letter be printed in the Record.

Ms. STABENOW. Madam President, prior to 1965, seniors had to go to private insurance companies to get their health care. Half could not find or afford private health care. That is why we created Medicare. Now we are looking at the opportunity to keep that choice for seniors, plus the opportunity to expand. If they want to be in an HMO, if they want to be in a PPO, they can find insurance in their community. That is terrific. That is their choice. But those who have chosen Medicare deserve the right to pick that choice.

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

Ms. STABENOW. Madam President, I will respond to my colleague, the chairman of the Finance Committee. First, I thank the Senator for his kind words and my esteemed ranking member from Montana, as well, for his kind words. We have different views, different perspectives on how best to provide seniors with prescription drug help, but we all share a common desire to do that and, within the confines we are operating under, to create a way to do that. First, the Senator from Iowa, the chairman of the committee, is correct: A portion of the individuals who are in traditional Medicare are there because there are not plans available in their area. In Michigan, as I indicated in explaining the amendment, only 2 percent of the people right now in Medicare in Michigan have access to Medicare+Choice. So it is definitely true. It is my understanding, though, that CBO has said under the new plan only 1 or 2 percent of the folks would go into managed care under this bill. If that is correct, we would not see much of a choice even if it were available. However, the larger point is whether or not the market has worked as it relates to health care for seniors. In 1965, when Medicare was created, it came about because at that time half the seniors in the country could not find health care insurance or could not afford it. The market was not working for older Americans at that time. I argue, also, the fact that there are no managed care plans in Iowa, northern Michigan, or other parts of the country. Again, it is a question of whether or not the market works in those circumstances. The reason Medicare came into being is because there were not health care plans in rural America, there were not health care plans available to those who needed them. We decided in one of the best decisions that has been made by the Congress--I was not there at that time--one of the wisest things that was done at that time was to say our value, as Americans, is that older Americans, the disabled in our country, should not have to struggle to find health care. We believe health care should be available to them whether they live in a rural community, whether they live in a city or a suburb, anywhere in the United States. Our priority as Americans is to create a system that, regardless of where you live, health care would be available and affordable for older Americans and disabled. Many say today we should be going in the exact opposite direction of expanding what we are doing to make sure everyone has the opportunity for the same health care that seniors and the disabled have in our country; that children and families, working hard every day, that individuals working two and three part-time jobs who cannot find health insurance, ought to have the ability to buy into a system of health care coverage. There is a great need to make sure that health care is available and affordable. Medicare has done that. I agree there are improvements to be made, such as more focus on prevention. We can certainly streamline the paperwork and bring it into the 21st century as far as technology and other options, to make the system better. From my perspective, here is a plan, unfortunately, that moves away from that stability, the dependability and affordability of Medicare. I see my esteemed colleague from Iowa, Senator Harkin, and I know he wants to speak. Members feel strongly about this issue. What we are doing with this amendment is the ultimate choice. It is the real choice. It is the choice the majority of seniors have already made, and it is the choice they want. Under the underlying bill, the only way they could get to the place to choose what they want is if private insurance plans were not available in their area. The plan goes through all kinds of changes to try and make that available, even if it costs more. Ask any small business, any large business in this country today, how fast their private insurance premiums are going up. We have seen small business premiums double in 5 years. We have seen Medicare going up about 5 percent. We see private sector going up 15, 20, 25, 30 percent a year. This says rather than having a plan that goes up 5 percent a year, we are going to design this so it goes up 15 or 20 percent a year. That does not make sense. In all honesty, the only group this makes sense for are the pharmaceutical companies who do not want folks in one place to be able to bargain and negotiate lower prices, which is what Medicare would be able to do--negotiate lower prices. For all who want to get this right for our seniors, I urge my colleagues to join in creating real choice for our seniors. Give them the opportunity for the choice they want. If, in fact, someone chooses to go into managed care, an HMO, PPO, or other kinds of private plans, they should have that choice, as well. This amendment allows them to do that. I yield the floor.

Ms. STABENOW. I thank the Chair. Mr. President, again, I urge my colleagues to join in this amendment. I am hopeful we can join together enthusiastically in embracing a system that has worked since 1965 for our seniors. I hope also we can join together to improve it, not only prescription drug coverage, but ways to minimize paperwork and focus more on prevention, as the Secretary of HHS has suggested. There are many opportunities for us to improve within the structure of Medicare a plan that is focused more on prevention, to eliminate the paperwork, and to do it together and still provide our seniors with the choice for which they are asking. In conclusion, I ask unanimous consent to add Senator Levin, Senator Kohl, and Senator Dodd as cosponsors of my amendment.

Ms. STABENOW. Mr. President, my friend from Oregon was speaking about medicine cabinets. On the question of whether you want a for-profit insurance company or a bureaucrat between you and your medicine cabinet, or whether you want Medicare, which we have known and relied upon since 1965, I appreciate that there is a different view and philosophy. I think there is a fundamental difference in ideology that is working here. It is interesting. I had a chance to go back to the debates when Medicare was first developed. The same kind of differences occurred at that time and the same debate about whether or not we should provide care under one plan under Medicare that is stable and reliable or use the private market private insurance company. The very same kind of debate was going on then that is going on now. I believe the right choice in 1965 was Medicare. I believe it continues to be one of the choices that makes sense to offer to seniors. I wish to respond to the Congressional Budget Office estimate. It is disappointing to me to find that they have chosen to score it at $50 billion above the $400 billion. We have worked with them. In fact, we made it clear that the intent of this amendment was not to add $1 to the budget resolution. It is to use the $400 billion and within that to have a carve-out or choice of Medicare. In fact, so as to guarantee that, we included at the end of the bill an authority to prevent increased costs. If the administrator--in this case we are talking about HHS--determines that Federal payments made with respect to eligible beneficiaries enrolled in a contract under this section exceed on average the Federal payments made with respect to eligible beneficiaries enrolled in a Medicare prescription drug plan or MedicareAdvantage, the administrator may adjust the requirement or payment under such a contract to eliminate such excess. The reason we have included that is to guarantee that it is within the $400 billion parameter. If, in fact, the Congressional Budget Office has not looked at that, it is unfortunate. I would disagree with their analysis. I indicate again that this is not about changing the budget resolution or the amount of dollars. It is about creating the best choice or one more choice. It may not be the best for an individual. They may decide that going through a PPO or an HMO or some other part of the alphabet might be a better choice for them. The question is whether people will have a full range of choices including the choice that the overwhelming number of seniors have told us they want. The intent of this amendment is in fact not to add anything to the cost of this particular bill. I yield the floor. I suggest the absence of a quorum.

Ms. STABENOW. This amendment is very simple and very straightforward. What we are saying is, seniors ought to have every possible choice for their prescription drugs, and one of those choices should be under traditional Medicare. Today, 89 percent of seniors and those with disabilities in our country are under the traditional Medicare insurance plan; only 11 percent are not. We want to make sure, in this amendment, those seniors who are under traditional Medicare--choosing their own doctor, having the confidence to know that regardless of where they live they will have the same premium, the same cost, the same benefit, the dependability of Medicare--that they, in fact, will be able to choose traditional Medicare. Under every cost estimate we have looked at, in terms of administrative costs, the growth in programs, other kinds of costs, Medicare has always come out less expensive than the private plans that have been compared to it. So, in fact, this does not cost more money, it costs less. In our proposal, we stay within the $400 billion parameters by allowing the Secretary of HHS to actually modify the plan to stay within the $400 billion in the budget resolution. This is no additional cost. This is a question of choice and making sure seniors who, overwhelmingly, choose to stay in traditional Medicare have the opportunity to do so. I ask my colleagues to join with us in creating true choice for our seniors. Madam President, I reserve the remainder of my time.

Ms. STABENOW. Mr. President, I appreciate my colleagues coming to the floor in support of my amendment. I take a moment to reiterate what we are doing in this amendment. We are indicating in this amendment we want to make sure every senior has the choice of traditional Medicare for prescription drugs as well as a choice of HMOs or PPOs or other private sector plans. We are talking about seniors wanting to have choice or the desire to give seniors choice. The majority of seniors, as a matter of fact, like traditional Medicare. It is very clear. They either have chosen traditional Medicare or do not have any private options, and 89 percent of our seniors fall in that category. The majority have chosen Medicare or may live in a rural area where they do not have the choice of a private plan but they are in Medicare and they have their coverage, they can choose their doctor, they can live anywhere within their State or anywhere in the country and know the cost will be the same. It is dependable; it is available it them. That is what we are trying to do, guarantee seniors will be able to continue to have that choice along with new options for those who live in an area where there is a managed care plan and they choose to go into an HMO or PPO, that would be absolutely available to them. If they choose another private insurance plan, assuming there are those available to them, fine, that is certainly an option that we all agree should be available to our seniors. The question is whether we will shut off the choice the majority of seniors have already selected, the one they say they want. With all of the talk about choices, what I hear from folks is not: Please give me more insurance plans to wade through or to figure out how to get health care; please give me more insurance bureaucracy to wade through each day. Seniors say: Update Medicare and cover prescription drugs. It is simple. They want their traditional Medicare, choose their own doctor, choose their own pharmacy, to be able to make their own choices and to have them available regardless of where they are in the country, but they want to make sure they have prescription drugs as well. We know if health care in 1965 were like it is now, prescription drugs would have automatically been covered. We know that. We also know in 1965, as I indicated earlier, Medicare came into being essentially because of a failure in the private market. That is not a criticism; it is a reality that covering older Americans certainly is more costly as we use more health care. As we get up in age, we find we use more health care, we use more prescription drugs. There are fewer carriers wanting to cover. Certainly, way back in 1965, that was the case when half the seniors in the country could not find a private insurance plan or could not afford a private insurance plan available. Medicare came into being in order to make sure that health care was available for older Americans and for the disabled in our country. It was a value statement about who we are and what we think is important. It was an important value statement just as Social Security coming into being was a value statement about the fact we wanted to make sure there was a basic amount of money for everyone to know there is a certain amount of financial support available to them as they get older, as they retire. It is a value statement. Medicare and Social Security have both been great American success stories. We are now at a point where medicine has changed, the delivery system, the way we provide care. Most of us go to the doctor's office and walk out with at least one prescription. We have the opportunity to take medicine to keep us well, to manage our high blood pressure, cholesterol, or other issues that allow us to remain healthy and remain out of the hospital. These are all very positive. We also have the opportunity to avoid heart surgery by taking a pill or have other options by taking medications that cause us not to have to go into inpatient care in the hospital. A lot of good has happened. We are now at a point where it makes sense to update Medicare. The question is how to do that. We really have two different views on how to do that. One that I share says we should take a system that has worked and we should make sure it is fully funded so our physicians and hospitals and home health care and nursing homes have what they need to provide services. That is another critical issue--the resources being pulled out of Medicare and the underfunding of Medicare which has caused problems. We should provide full funding, and we should make sure it is modernized to cover preventive efforts and that we cover prescription drugs as a part of an integrated, modern health care system under Medicare. We should use more technology so there is less paperwork and more streamlining, which I know is of great concern to health care providers. We can do all that within the framework of Medicare, which has worked so well. Why is that important? Because it is dependable, reliable, affordable, and it is a value statement about who we are as Americans. That is one view. Another view is we should move back to the model before Medicare came into existence, and that is more of a reliance on private health insurance plans. We hear from many insurance carriers that they are not interested in prescription-only policies. They are not interested. It is different. Insurance usually means you provide insurance to a large number of people assuming only some of them will get sick or some will have automobile crashes or some will have their homes burn down--not everybody. In the area of prescription drugs for seniors, from an insurance model it is very different. In fact, when you cover people, you can be assured almost all of them, if not all of them, will in fact need your insurance. They will need your coverage. So it is a very different kind of model than traditional insurance, where only some people use the insurance but everybody is paying into a system and spreading the risk. That is one of the difficulties we have had, trying to fit this model of private insurance into the fact that we are talking about private insurance for health care, prescription drug care, where everyone who is buying the product will be using it. There are a number of questions about how to fit that model in and make it work. Then there are questions about why. Why do we do that? Why do we propose something that is complicated, that on the one hand provides choice, which is good, from the private sector, but on the other hand is convoluted and complicated for those who want to stay in traditional Medicare and not make them make that choice. That is one of the questions, Why is this happening? From the pharmaceuticals' standpoint, they are very much opposed to seniors being under one plan, 40 million people in one place, to be able to negotiate large discounts in price. As a result of that, they certainly have lobbied very heavily for a plan that divides seniors into a lot of different places so they have less leverage to be able to lower prices and negotiate discounts. That is also a concern of mine. We know also that under traditional Medicare, we actually save money. We hear all the talk about market forces and lowering prices. In reality, facts show the opposite. In fact, commonsense I think shows the opposite when we look at what is happening in the private sector today. The average small business has seen its insurance premiums double in the last 5 years. Certainly in Michigan, major high-tech manufacturing in the State has seen 15 or 20 percent or more increases in the cost of private health insurance every year. Yet under Medicare we see the costs going up about 5 percent a year. We look at this and say: Wait a minute, we are talking about a plan that costs more, not less. How does that make sense? We also know, when we look at administrative costs, we are told by those who have analyzed it that administrative costs for Medicare to administer the program are about 2 percent. In the private HMOs in place right now under Medicare, their costs are 15 percent for administration. We are told that in the private sector they actually go higher, that in some private plans it has been as high as 31 percent for administrative costs. We look at that and say, How does this make sense? We don't want 15 percent going into administration when it can be 2 percent so more of those precious dollars that we have can then go into buying medicine. That would seem to make sense. There are a number of different reasons I believe it makes sense to make sure the real choice seniors want to have, which is traditional Medicare, is one of the choices available to them. I personally believe it will save dollars. It will allow the money we have to be used more for purchasing medicine and for health care rather than for administration or other kinds of costs. Medicare is a nonprofit system by design. I know there are differences in philosophy about a for-profit system under health care versus a nonprofit system. But the majority of hospitals in this country are nonprofit. The Medicare system itself is set up so that every dollar possible goes into care. I believe that is a model we should continue. I believe it is a model, although it can always be improved--and I would be the first to say we can improve and streamline the Medicare system--fundamentally it has worked for people. It has been there. It has been a system that has held down costs. It has been dependable and reliable for every single person who is an older American, or for a disabled person in our country. I wish we would embrace it rather than talk about dismantling it. I ask colleagues to come today, as we vote on this amendment, and join together to provide real choice for our seniors, the choice they are asking for as well as every other choice. Let's make sure every choice they might want to have they could have, including traditional Medicare. Mr. President, I yield the floor. I suggest the absence of a quorum.

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

Ms. STABENOW. I thank the Chair. I yield the floor.

Ms. STABENOW. Mr. President, I send an amendment to the desk on behalf of myself, Senators Boxer, Bob Graham, Rockefeller, Harkin, Cantwell, Kerry, Bingaman, Jack Reed, Clinton, and Mikulski. I ask for its immediate consideration.

Ms. STABENOW. Absolutely not.

Ms. STABENOW. Absolutely not. What we are doing is saying, instead of two private insurance plans, we add a third, so instead of two choices, you have at least three.

Ms. STABENOW. Absolutely. The Senator from Illinois has hit what I think is the most critical point, and the reason there is such opposition, certainly from the pharmaceutical industry, to what we are trying to do through Medicare. They don't want the majority of seniors in one insurance plan together in Medicare where they can force a group discount. They would like to divide seniors up in lots of different insurance plans and not give them the leverage to bring prices down.

Ms. STABENOW

Ms. STABENOW. Mr. President, I thank my friend from Illinois. I commend the Senator for his substitute. What the Senator is talking about is exactly what the seniors of America are asking us to do to make sure they have a comprehensive prescription drug benefit under Medicare which they know will be there, which is stable, dependable, where you can choose your own doctor no matter where you live in the country; that whether you live in the upper peninsula of Michigan or Chicago, IL, you will have an opportunity to receive the health care you need and deserve under Medicare. By simply expanding that to include prescription drugs, and then coupling that with the ability to keep prices down, I believe this is the best possible approach to come before the Senate--in fact, the U.S. Congress. I am hopeful that colleagues, when this comes to the floor, will rally around this plan. What Senator Durbin has done is put together a plan designed for seniors, not designed for pharmaceutical companies or insurance companies, which is, unfortunately, why this process has become so complicated. For example, people look at me with bewilderment when I am explaining that for the private sector plans in their region, if there are two or more, they would have to take one. But if there isn't, they could have a backup, but then they would have to drop it and go back to an insurance plan. When I explain that plan, they scratch their heads and say: Why are you doing that? Well, unfortunately, we have a plan put forward--and I have to say it is a valiant effort by many people to try to come to some consensus, and I appreciate that--but the reality is, it is designed much more to benefit the pharmaceutical companies in particular than it is our seniors. Why is our approach not supported by the pharmaceutical industry? For one simple reason: If we have all 40 million seniors and people with disabilities in one insurance plan, they can negotiate a big group discount, which is what they should be able to do. They should be able to come together, as one insurance plan, and negotiate a group discount. As Senator Durbin indicated, when you do that, you are not paying retail. In fact, the Federal Government does that on behalf of our veterans through the VA, and we are able to get about a 40-percent discount, which is a terrific deal for the veterans of this country. I am proud we do that, but why shouldn't that same opportunity be available for every senior, for every person with a disability under Medicare? So I just wanted to rise to congratulate the Senator's vision on putting forward the right plan that makes sure that, in fact, our seniors know they can count on a $35 premium. They would also not have to have a deductible. Seventy percent, as I understand, of their prescription drug costs would be paid for. There would be no gap in coverage for the last few months of the year. Or if you found yourself getting to a point where you reached the end of your coverage, and then, unfortunately, your doctor indicates you have an even more serious illness to deal with, you would not be left wondering what to do to pay for that treatment and medication. This plan does what our seniors in this country are asking for. I believe it does what we should be doing for them. It is what they need, and it is what they deserve. It is what they have been waiting for. I commend the Senator from Illinois for putting forward this option of which I encourage all of our colleagues to come together to embrace, standing together to achieve a bipartisan victory that is in the best interest of our American seniors.

Ms. STABENOW

Ms. STABENOW. Mr. President, I thank my colleague from Louisiana, who I know has spent years focusing on the issue of health care and Medicare prescription drug coverage. First, while I present an opposing view in terms of some of what is discussed here, I share the commitment and desire of all of us to do what is right in terms of the seniors and those with disabilities who are on Medicare who have waited for too long for us to come together and act as a body, along with the President. I will start by commending my colleagues on both sides of the aisle who have been diligently working through a number of issues and a number of obstacles to come up with an approach they believe is the best approach or the most doable approach right now before the Congress. Certainly, Senator Grassley, Senator Baucus, Senator Breaux, Senator Jeffords, who just spoke, Senator Snowe, and many others have been involved in these discussions. As one who has spent a tremendous amount of time myself focusing on Medicare and the need for updating and strengthening Medicare to cover prescription drugs, I commend them for their desire and concern and hard work in coming to this point. I do not believe we are doing all we can do and should do as a country or as a Congress for our seniors under Medicare. I do believe Medicare has been a great American success story since 1965. I agree that it needs to be modernized, and not just prescription drugs but I agree with the Secretary of Health and Human Services who focuses on prevention. I commend him for his efforts and agree with him that we need to modernize Medicare to focus more on prevention and other options that can streamline the system and make it more efficient. I do not believe, however, that we save dollars or create a more efficient system by turning over prescription drug coverage to private insurance companies. At the appropriate point, I will be offering an amendment that will give true choice to seniors by allowing them to choose a private sector option but to also be able to remain in traditional Medicare and get the help they need if that is their choice. If we are truly talking about choice, I believe the choice should be with the senior. This really is a question of whom we are designing the system for, whether we are designing it for the insurance companies, for the pharmaceutical companies, or for the people who are covered under this system. I am concerned that we can do a better job for our seniors if, in fact, we offer them a true range of choices. I find it interesting at a time when I am back home in Michigan talking to the big three automakers or small businesses or others who are struggling with insurance premiums in the private sector, the premiums are skyrocketing. The average small business has seen its health insurance premiums double in the last 5 years. The automakers and other manufacturers in my State have seen their premiums go up 20 to 30 percent a year, forcing them to freeze pay increases for employees, asking them to pay a larger share of the cost, cutting salaries or, in some cases, people losing their jobs because their business cannot afford to maintain the skyrocketing premium increases in the private sector. Given that fact, I find it ironic that we are suggesting we would save dollars by going to a private for-profit insurance model where, in fact, the premiums have been rising two or three times faster than those under Medicare; that when we look at the administrative cost difference, it is less under Medicare. When we look at the current choices we have between Medicare+Choice, which is Medicare HMOs, or traditional Medicare, we hear that studies have shown that to provide the same service through the HMO, on average, costs 13.2 percent more than if it were provided through traditional Medicare. So I question, as we have precious few dollars to work with to be able to provide the services and the care for which our seniors are asking, the wisdom of moving to a model that is rising in cost faster than Medicare. I have not seen evidence where, in fact, it will provide the kind of competition to lower the prices, which we are all looking for from the private sector at this time. In fact, what I am hearing from the business community is they want us to partner more with them, the public sector and the private sector. Because we now have our global economy and businesses competing around the world and because we are the only employer-based health insurance system among the industrialized countries, they find themselves at a competitive disadvantage and are asking to partner with the private sector to both contain costs and be able to help them compete and continue to be able to provide insurance coverage. So in light of all of these discussions that are going on, we look at Medicare, which is the one piece of a health system that Congress in its wisdom back in 1965, along with the President, said we are going to make sure is available, universal, once one is 65 or if they are disabled, regardless of where they live; if they are in the Upper Peninsula of Michigan, Detroit, or in Benton Harbor, they know they will be able to have insurance coverage, be able to choose their own doctor, be able to get the care they need. They know what it costs. They can count on it. That is the miracle. That is the reason so many seniors overwhelmingly choose traditional Medicare rather than other private sector options. So we come to the difficult choice now of how to provide prescription drug coverage, and there is a difference of view certainly about whether we should strengthen traditional Medicare or provide incentives, encouragement, a carrot stick--whatever one wishes to call it--for those to go into managed care. I commend my colleagues for attempting to find that balance in the middle. I believe the balance really is not struck unless we make sure that traditional Medicare is part of that choice. I also am very concerned that we hear constantly that, in fact, we have a situation where we can only afford to go a part of the way. It is my understanding, when all is said and done, we are talking about providing most seniors--certainly middle-income seniors--with 20 or 25 percent to help with their drug bill over time. I do commend the structure for low-income seniors, but overall we know we are not providing a comprehensive prescription drug benefit with the dollars involved. It is half of what it would take to provide the same coverage we have as Senators through Blue Cross and Blue Shield under the Federal employee health system. So we certainly are not providing what we, other Federal employees, receive for a comprehensive benefit. I have often heard, well, we cannot afford to do that. I feel it necessary to indicate for the record one more time why it is we are talking about a system that is not comprehensive, will end for several months of the year for seniors, will not provide them what they need, and is complicated and convoluted, I believe, and that is because of another set of policies that were debated in this Congress not long ago, coupled with what happened in 2001, and that is the question of making a determination, a value judgment, that it is a bigger priority to provide tax cuts for the wealthiest, the privileged few of our country, rather than helping the many of our seniors and the disabled to be able to put money in their pockets through prescription drug coverage. It is astounding to look at what that decision has done. We are told that the 2001 tax cuts made permanent and the other proposals passed over the next 75 years will, in fact, cost $14.2 trillion, where the projected Medicare and Social Security deficit combined--not just Medicare but Medicare and Social Security deficit--is $10 trillion. This has been a conscious choice to make a decision to spend dollars in one way to help a few people in our country rather than to keep the commitment of Social Security and Medicare that we have had for many decades in our country. The fact that we are talking about an inadequate benefit that ends, that leaves coverage gaps of 3 or 4 months a year for our seniors, the fact that we are talking about an approach that does not do what they have asked us to do, is because of decisions made to take revenue and instead of investing it in health care for older Americans, instead of investing it in strengthening Social Security for the next generation, the decision was made to eliminate that revenue. By the way, that decision has resulted this year in the highest single-year deficit in the history of our country. Unfortunately, a hole has been dug. I fear it will continue to be dug deeper and deeper with the decisions that will be made. It is not too late to decide in this debate we will do it right--real choice, a real benefit--that we make decisions that are best for the majority of the people we represent. They are counting on us to do this right.

Ms. STABENOW

Ms. STABENOW. Mr. President, I appreciate a moment to have a chance to give an alternative view. I thank my colleague from Louisiana. He has worked diligently on the issue of prescription drug coverage for many years, as have other of my colleagues on the floor regarding this issue. I wish to take this moment following his presentation to speak to the fact that there is much work left to be done by this body before we have prescription drug coverage that in fact meets the needs and the desires of the seniors of America. The plan being put forward tomorrow in the Finance Committee basically does two things. It offers two structures. The majority of those supporting it will openly indicate that they would prefer that the seniors of America go into managed care rather than stay in traditional fee-for-service Medicare, where the senior determines their doctor, pharmacy, and other choices. There is a desire to move people into what are called PPOs and HMOs and other managed care. We have experience with this because, since 1997, there has been the choice on behalf of American seniors to stay in traditional Medicare, choose their own doctor and pharmacies, and so on, or to go into a Medicare HMO. We know as of today that 89 percent of the seniors who chose--they made their choice--have chosen to remain in traditional Medicare, which I believe is a very strong message about the confidence seniors have in the current system, the stability of it, the dependability of it. They know what the premium is, they know what the services are, and they decide their doctor. This has been in place and serving the seniors of the country since 1965. So the plan the committee is intending to report out tomorrow would create more choices of HMOs and PPOs and other managed care, and I support that for seniors. But what it does not do is add a prescription drug benefit under traditional Medicare as an integrated part of the traditional fee-for-service Medicare. All of the prescription drug plans that are part of this report tomorrow involve private insurance first. If private insurance is available in your State, or available in the region, if there are two or more companies there, regardless of the premium they choose, the benefits they choose, and how they structure it, the pharmacies that they will let you go to, however they structure it, you would have to choose one of those two private insurance plans. Now, technically, they are saying it is under Medicare but this is not a Medicare prescription drug benefit as the seniors of the country have asked to have provided to them. The seniors, potentially every year, would get paperwork in the mail about two different insurance companies--if that is available in their area--and they would have to wade through the paperwork and decide which of the two is best for them. The next year, if those two companies were not both available--if there was only two and one decided it didn't want to cover seniors anymore; it was too costly--then there would only be one insurance company; and the senior would have the ability, then, to go to a backup plan--something administered through Medicare. Then the next year, if there were two companies that decided they wanted to try their hand in covering Medicare prescription drug coverage in their region, they could not get the Medicare plan anymore; they would have to pick between those two companies. Potentially, this could happen every single year for a senior. Seniors are not asking for more paperwork or more choices of insurance companies. They already picked--89 percent of them--traditional Medicare, run through Medicare. Yet we are not giving 89 percent of them that choice. That is a major concern I have about this plan. There is a better way to do this, to give people more choices, but make sure one of the choices is traditional Medicare. I find it quite amazing that we are even talking about the structuring of a plan in this way at this time when we look at the fact that Medicare has been rising in cost about 5 percent a year and private insurance is going up 15 to 20 percent a year. In fact, I have small businesses, as well as large businesses, including auto manufacturers and many others, coming to me concerned about the explosion in their private health insurance premiums every year instead of choosing an approach that costs less so we can take some of those pressures off and put them into the best benefit, the best way to provide medicine for seniors. This approach uses what is a more expensive model--arguably, putting more dollars into the pockets of insurance companies but certainly not more dollars into the pockets of our senior citizens in the form of access to more lower cost medicines. This is a deep concern of mine. Why are we going through all this convoluted process? Well, I think there are two reasons. One is there are those who philosophically believe we should move to private insurance, managed care. I respect that. I have a disagreement with that but I respect the philosophical difference. Some don't believe we should have universal health coverage under Medicare. I disagree. I think Medicare has been a great American success story since 1965. In fact, it is the one part of the universal health care we have in this country, and it concerns me deeply if we are going to roll that back. There is a difference in philosophy--and I appreciate that--on the part of colleagues on both sides of the aisle. We know there is something else at work here, and that is a very large and powerful prescription drug lobby, which I believe, at all costs, wants to make sure our seniors are not in one insurance plan together--40 million seniors and disabled people in our country, who would then be able to negotiate big discounts in prices. By dividing folks up into lots of different insurance plans, making it more confusing for people to stay in traditional Medicare and get prescription drug help, and trying in every way to move people more to managed care, the prescription drug companies know they will not be put in a position of having to substantially lower their prices for our seniors. I have deep concerns about this. I agree with my colleagues that we have to work together in a bipartisan way if we are going to put forward a bill. I am hopeful that through amendments we can, in fact, provide a better bill. I will be offering an amendment that will set up a real choice for seniors, allow them prescription drug coverage under Medicare, which is what they want, and then also allow the other options colleagues have put together in the legislation that will be in front of us. I believe that is a true choice, and I believe it is a choice that will allow prescription drug prices to go down, and that is a more cost-effective choice overall for Medicare as a system as well as for our seniors. I will also be working with colleagues, as we have been for the last 2 years, on other efforts to lower prices for everyone. I am very proud of the fact that on this side of the aisle, we have brought the issue to this Chamber of lowering prices through greater competition in the marketplace and, in fact, we are seeing headway in that area. I commend my colleagues on both sides of the aisle who have been coming together in agreement on the issue of generic drugs. I commend the leader of the HELP Committee, the Senator from New Hampshire, Mr. Gregg, for his leadership, the Senator from Massachusetts, Mr. Kennedy, and the Senator from New York, Mr. Schumer, who helped lead this effort with Senator McCain to close loopholes that have allowed brand-name companies essentially to game the system, to keep lower cost medicine off the market, unadvertised brands called generics. There is a coming together that is very positive and bipartisan to pass legislation to close loopholes and allow greater competition. I believe this is one of the most important ways we will, in fact, lower prices more than anything else to get more competition for unadvertised brands in the marketplace. There are two other issues about which we have been offering amendments that I encourage colleagues to support as a part of this process. One is to open the border to Canada for prescription drug coverage. From the State of Michigan, it is frustrating for the seniors, families and, in fact, the businesses in Michigan to literally look across the river and know that on the other side of that river they can get their American-made prescriptions at half the price and, in some cases, at even deeper discounts. I urge we come together and open the border to Canada, and for colleagues who have resisted that, I ask that we look between now and 2006, when the prescription drug bill takes effect, at the idea of a pilot project of opening the border to Canada until 2006 so that we can drop prices immediately. Our seniors have waited long enough. They do not need to wait another 2\1/2\, 3 years to see prices go down and Medicare help come. Let's open the border now. Let's sunset the pilot project when this bill takes effect, and then we can evaluate any concerns that have been raised about that process. That is something we can do right now that would have 10 times the effect of lowering prices than another discount card for seniors. The other issue I am hopeful we can support on a bipartisan basis is to support States that are being creative in their purchasing power to get discounts for their citizens; efforts such as in the State of Maine to use their discount power to lower prices for the uninsured. There are very positive steps we can take together. The generic drugs bill is a very positive initiative. I appreciate the leadership on both sides of the aisle for bringing that forward and coming together in a positive way. To conclude, when it comes to Medicare prescription drug coverage, I remain deeply concerned about the direction in which we are going. I believe we are moving in a direction that actually dismantles the only part of universal care we have; that, in fact, will end up with more subsidies and more money in the pockets of insurance companies and drug companies as opposed to putting money in the pockets of our seniors who desperately need help with their prescription drugs. I hope that as we enter into amendments in the next week, we will come together in a way that improves this bill and strengthens it, keeping in mind that our first priority should be the people right now who need the help. We can do that if we are willing to work together. I yield the floor.

Ms. STABENOW

Ms. STABENOW. We appreciate the opportunity to share this today. We have a real opportunity here, as Members on both sides of the aisle, to do something very meaningful. I hope we will do that rather than debate whether or not Medicare has been successful and seniors want choices. I believe we should look at the choice they made. It is very clear. They want us to work together and get something done, and do it in a way that will allow seniors to know that medicine, which is such a critical part of their lives and a great cost to their pocketbook, will be covered or partially covered and they will receive some assistance to be able to afford such a critical part of health care today, which is outpatient prescription drugs. It is too important to people. We do not want them choosing between food and medicine in the morning. We want them to have confidence that Medicare will cover and help with the costs of prescription drugs. I yield the floor and suggest the absence of a quorum.

Ms. STABENOW. I think the Senator is absolutely correct. It is not that there is not a place for private sector insurance, but when Medicare came into place, it was because half the seniors in the country could not find a private plan that would cover them or they could not afford it. So there was such a huge need. We as Americans have a basic value about making sure older Americans can live in dignity and have access to health care and a quality of life that they deserve, as well as those who are disabled. This is a great American value. I believe it is a great American success story. Even though there are those who since that time have been trying in some way to undermine it, we should be proud as a country. I absolutely agree with colleagues who say it needs to be modernized. We can focus more on prevention strategies. In addition to prescription drug coverage, there are other ways we can make the system better. We can use more technology, less paperwork, all of which are good. If we could get beyond the debate that says we should move back toward the private sector, and somehow that is cost effective and saves money and the dollars will go further--none of which is true; there is no evidence of that--if we could get beyond that, we could come up with a bipartisan plan that would be meaningful. The seniors have been waiting for us to get the message. They want Medicare. They just want prescription drug coverage. They want it modernized. But they want Medicare. They have been saying that loudly and clearly. I hope we can get the message and work together to actually get it done.

Ms. STABENOW. Absolutely.

Ms. STABENOW. Absolutely.

Ms. STABENOW. Mr. President, I wish to follow what my friend and colleague from Iowa was speaking about earlier in terms of the importance of Medicare. I think his comments were so right on point. I find interesting--I was not around at the beginning for the debate--the debate on Medicare. I understand that in 1960, originally, there were proposals to provide a broad universal care for all Americans and that, in true compromise form, the Congress and the President, when there was not support for that, ended up with a plan called Medicare for seniors and the disabled in this country. So it was a compromise. It was viewed as a first step, not a last step, in providing universal care for all Americans. I believe Medicare has been a great American success story. We have seen both Medicare and Social Security bring our seniors out of poverty. Today, we have about 10 percent of our seniors in poverty rather than close to 50 percent prior to Social Security and Medicare. During that debate, if one reads the Record, there was a major concern about who could provide health care to seniors better--the private sector or the public sector through Medicare. The reason the Congress, in its wisdom, decided to move forward with Medicare was because at least half the seniors could not find or could not afford health care insurance in the private sector. Seniors and all of us who are getting older and using more medications and going to the doctors more frequently understand that older Americans require more health care, more costs, and are not exactly the prize group an insurance company goes for. They want my son and daughter in their twenties and younger healthier people to balance out those of us who are getting older and needing more care. We believed, as a great American value, it was important that older Americans have health care. It was important that those who are disabled have health care, be able to pick their own doctor, be able to go where they choose to receive their care but that they would know it was always there, it was stable, a constant premium; they would know what it would cost; they could pick their own doctor; and it has worked. Since that time, there have been a lot of debates, and we have one going on today, about how to provide Medicare prescription drug coverage. But the real issue is beyond that. It is about how to provide health care for older Americans. The next big change that happened of which I was aware in 1997 when I was in the House was to offer private Medicare HMOs. Also at that time, there were major cuts made in Medicare for providers. I believe they went way too far. Many of us have been trying to change that ever since. There were cuts to hospitals, home health agencies, and doctors that have affected people being able to get care. At that time, something was put in place that was touted as this great new program. In fact, Tom Scully at the time predicted an Oklahoma land rush of moves to private health plans in 1999. He said: You are going to see seniors pouring into managed care Medicare. In fact, that did not happen. That is not what happened. But what we have seen happen, unfortunately, is what the former Speaker, Newt Gingrich, talked about in terms of a strategy of cutting off resources so Medicare would wither on the vine, an effort to convince people that Medicare was not working, even though the majority of seniors know it is because they use it every day. I found it interesting that back in 1997 there was a strategy paper put out by the Heritage Foundation, an extremely conservative organization that I know does not support Medicare as we have it today, advising my Republican colleagues. They recommended a strategy to move to the private sector by doing four things: First, to convince Americans that Medicare provides inferior medicine and poor financial security. They set out to do that. We are going to hear a lot about that in this Chamber, that it is inferior medicine, even though seniors know that is not true. There is not evidence that is true, but we are going to hear a lot of talk--and we have for 5 years--about how Medicare is not as good. Second, convince Americans that Medicare cannot be sustained for long. We have heard continually that we cannot afford it anymore. As my colleague from Iowa pointed out, if there is concern about being able to afford it, it is only because we are spending the money on tax cuts for the privileged few instead of beefing up Medicare and Social Security. So it is a conscious choice. It is a question of values and priorities that we have to decide every day, just as American families do. Third, compare or reform the Medicare system to the Federal Employees Health Benefits Program. We hear a lot about that now: Seniors should have the same kind of plan that we do. I happen to agree with that, but during the tax debate I offered an amendment that simply said we are going to defer the tax cut to the privileged few at the very top, less than 1 percent of folks who already received a tax cut 2 years ago; we are going to defer the next one until we can fund Medicare at the level that Senators and House Members and other Federal employees receive. My colleagues voted no on that issue. It would cost twice as much as in the budget resolution--$800 billion instead of $400 billion--and, unfortunately, the majority voted no. But we are going to continue to hear about how we should have private sector plans instead of Medicare, and it should be the same as we receive. I agree with that, and I am happy to offer my amendment any time folks want to support it so we can pay for that benefit and make it real for our seniors. Finally, fourth, they said protect current beneficiaries. They said the calculation was the private alternatives generated by the voucher- style option, private HMOs, would be so much more efficient and so much more attractive that fewer and fewer seniors would decide to remain in the traditional system. Hence, Speaker Gingrich's remarks that the traditional Medicare system would wither on the vine because the demand for that option would decline sharply over time. Obviously, that is not true. Nine out of ten seniors in this country, when given a choice, have picked Medicare. Seniors have made their choice. Since 1997 when they were given the option of private HMOs, they have overwhelmingly said no. It is very interesting; 89 percent of the seniors in this country right now are covered under Medicare, and 11 percent are covered under a private sector HMO. Some do not have that option. In Iowa, there is not a private sector HMO. In Michigan, only 2 percent of beneficiaries have that option. Of the 64 percent of the seniors who have that option, only 11 percent of them have chosen to go into a private sector HMO.

Ms. STABENOW

Ms. STABENOW. Mr. President, I ask unanimous consent that Oliver Kim, a fellow in my office, be granted floor privileges today.