July 23,2002

Grassley on the Tripartisan Medicare Bill, Other Proposals

Floor Statement of Sen. Chuck Grassley, of Iowa
Ranking Member, Senate Committee on Finance
21st Century Medicare Act
Tuesday, July 23, 2002

Mr. President, our time is very short this morning, so I will be brief. Let me discuss the keycriteria Senators should consider.

Permanent and Dependable?

First, is the drug coverage permanent and dependable? Under the Tripartisan Amendment,drug coverage would be a permanent part of the Medicare entitlement, for the 21st Century.

Under the Graham Amendment, however, that coverage disappears into a black hole. Thebenefit expires the very same year the baby boomers begin to retire. In my view, it’s terriblyirresponsible to pull a bait-and-switch on people who depend on Medicare. How will my colleaguesexplain to seniors in 2010 that they are out of luck because of a gimmick they used to hide the truecost of their proposal? I ask the Senate to support permanent, dependable drug coverage.Access to Needed Drugs?

The Graham Amendment seriously restricts Medicare enrollees who want access to brandnamedrugs. Its restrictive policy will result in long lines for ground-breaking drugs. Why? BecauseSenator Graham requires Medicare enrollees to wade through a bureaucratic appeals process in orderto get needed drugs that are off the formulary. And it’s not a short list – their formulary deniesaccess to at least 90 percent of brand-name drugs.

We’ve heard a lot about gaps in coverage. Mr. President, here’s the biggest gap of all: thegap between the large number of brand name drugs beneficiaries may need, and the paltry numberMedicare would cover under the Graham Amendment. Of the 2400 brand name drugs approved byFDA, less than 10 per cent would be covered. What a gap in coverage!

Our amendment, on the other hand, sets policies to ensure that Medicare enrollees get thedrugs they need. We don’t limit them to an arbitrary number of drugs in each class, as SenatorGraham does. We support making generic drugs an option, with lower cost-sharing, but we don’tthink depriving seniors of access to brand-name drugs is the way to go about it. So that’s a keydifference.

Our opponents have talked a great deal about the fact that less than 20 percent ofbeneficiaries would face a gap in coverage under the Tripartisan Amendment. But compare thatnumber with the number of beneficiaries who would experience a gap in coverage under theirAmendment. Under the Graham Amendment, fully 100 percent of enrollees would lack full accessto brand-name drugs in Medicare. When you lay the two gaps against one another, isn’t it clear thattheir gap, which will affect all enrollees, is the worse one?

Sustainable, Cost-Efficient Drug Benefit?

Our bill also delivers a cost-effective, quality benefit. CBO says that the only way to containthe cost of a drug benefit is to ensure that drugs are delivered efficiently.In turn, CBO says that the only way to have drugs delivered efficiently is to have truecompetition among private plans that stand to make money if they drive hard bargains with drugmanufacturers. That’s what our Amendment offers.

Now, our opponents have gone on and on about private plans not being willing to deliver adrug benefit. Well, they too rely on a private sector delivery system, although it is non-competitiveand thus is so expensive.

We’ve worked hard to ensure our delivery system works. Our opponents say that insurerswill refuse to participate, even though the government lays $340 billion on the table and bears 75percent of the economic risk, and even though CBO projects it to work everywhere in the country.But what happens in the off-chance that private plans won’t want to participate?

Well, here’s what will happen. The government has a duty – mandated in our bill – to dowhat it takes to ensure a drug benefit for every last Medicare beneficiary. If insurers won’t participateat the level of competition we expect, the Secretary must adjust the competition bar downward untilthey will participate.

As a last resort, we would end up with a Graham-type delivery model in which PharmacyBenefit Managers are simply government contractors, bearing only minimal performance risk. Putanother way, our Plan B is Senator Graham’s approach. So why are our opponents so afraid of that?Under no circumstances will our bill allow any senior, anywhere, to go without access to adrug plan. It’s an ironclad guarantee, and it’s right there in our bill.

Now, the Senator from Massachusetts has repeatedly objected to the asset test for the lowincomebenefit in our bill, as if it’s something new. What a red herring. Mr. President, there hasbeen asset testing for low-income Medicare populations since 1987, under the Qualified MedicareBeneficiary program and the Specified Medicare Beneficiary programs. And Senator Kennedy andhis Democratic colleagues voted for it overwhelmingly. There’s nothing but politics behind thoseobjections.

Enhanced Fee-for-Service Option?

Mr. President, another thing the Tripartisan Amendment offers is an Enhanced Option inMedicare. The Enhanced Option will add protection against the devastating costs of serious illness,and make preventive benefits free to help seniors avoid serious illness in the first place. And it’scompletely voluntary – seniors get to choose, and they don’t need to take it in order to get drugcoverage.

What does the Graham Amendment have to offer beyond drugs? Nothing. Mr. President,why would anyone want to deny Medicare beneficiaries the choice of free preventive benefits andbetter protection against serious illness? I’ll let the other side answer that.

Mr. President, the choice is clear. The Graham Amendment offers drug coverage that swiftlydisappears into a black hole, and it has the biggest gap of coverage of all. The TripartisanAmendment is the right prescription for 21st Century Medicare. I yield the floor.