Rx for Medicare

KWAME HOLMAN:

Members of the House of Representatives spent the day gearing up for a showdown vote, expected later tonight, on legislation that would transform dramatically the Medicare system for the first time since 1965. The details of the bill, known as a Conference report, were finalized late yesterday by a Republican-led House-Senate Committee chaired by Bill Thomas of California.

REP. BILL THOMAS:

Seniors and taxpayers have been waiting a long time for this day, for seniors, an ever growingly anxious 38 years.

KWAME HOLMAN:

The bill would provide $395 billion over ten years to provide prescription drug coverage to 40 million seniors and disabled people. Starting in 2006, Medicare recipients could choose whether to sign up for a drug plan under Medicare or under a private health plan. Premiums for either would be about $420 a year with a deductible of $250. Very low-income seniors would be subsidized further.

Under the bill, the government will pay 75 percent of a recipient's drug costs up to $2,250 annually. No coverage is provided for drug costs between $2,250 and $5,000. Above $5,000, the government would pay 95 percent of the cost of prescription drugs. Though seven Democrats were appointed to the negotiating committee, Republican leaders permitted only two– Senators John Breaux of Louisiana and Max Baucus of Montana– to participate in the three months of bargaining to produce a final bill. They were the only committee Democrats to support the final product.

SEN. JOHN BREAUX:

We cannot let unnecessary political partisanship destroy this institution's ability to get the job done for the people that we represent, and that goes for both sides.

KWAME HOLMAN:

House Democrats on the committee, such as New York's Charles Rangel, have complained all along about being shut out.

REP. CHARLES RANGEL:

So it means if you have two good democratic senators, that's enough for the House of Representatives, forget about it. Forget about it. We in the house still believe that in the House, the people govern.

KWAME HOLMAN:

Also unhappy with the bill were budget-conscious Republicans, such as Arizona's Jon Kyl and Oklahoma's Don Nickles, who worried the costs of the new program would soar.

SEN. DON NICKLES:

I am concerned about the cost of the bill. I am concerned about the cost of the bill. I wanted to produce the best bill we can. The cost of Medicaid is exploding and is going to explode faster now that it is all federal.

KWAME HOLMAN:

But House Majority Leader Tom DeLay told his colleagues this may be their last chance to fix a Medicare program in crisis.

REP. TOM DeLAY:

Whether you be pure on the left or pure on the right, you can never accomplish anything, and you cannot govern. And with all due respect to my two good conservative friends, in this process, you have to get what you can get at the opportunities that are presented to you.

KWAME HOLMAN:

Key to Republican support is that beginning in 2010 the bill would provide incentives for private health plans to compete directly with traditional fee-for-service Medicare for the coverage of seniors. Democrat Breaux, whose support of the bill has given it momentum in both parties, said the competition will be healthy and asked his colleagues to put partisanship aside.

SEN. JOHN BREAUX:

We cannot let the Republican political pundits tell us we have to produce a Republican- only bill so that Democrats will defeat it and that you will have a good political issue. On the other hand, you can't let Democrat politicians pundits say we cannot produce a Medicare bill because it would be bad because the president would have an opportunity to sign it. We cannot do that.

KWAME HOLMAN:

Though the House was expected to vote on the Medicare bill later tonight, there were reports this evening house leaders might wait until the weekend and perhaps beyond to round up more votes.

JIM LEHRER:

And to Ray Suarez.

RAY SUAREZ:

A closer look now from two legislators in this fight. Senator Charles Grassley was a member of the Medicare conference committee and is chairman of the Senate finance committee. And Senator Edward Kennedy worked to pass a previous version of the bill, but is now leading the fight against the latest version.

Senator, let me start with you. Just a short time ago, your colleague Senator Grassley said in the Senate that this was the best combination of what the private and public sector had to offer. Why do you to pose the bill?

SEN. EDWARD KENNEDY:

Well, we passed a good bill with 76 members of the United States Senate that was a prescription drug bill. Let's go back a little way. I was in the Senate when we first passed Medicare. And the reason we passed Medicare was because the private insurance industry did not protect our senior citizens. And when we passed Medicare, we took care of hospitalization and we took care of physician.

The thing that was missing was the prescription drug program. We passed a bipartisan prescription drug program that would have been a down payment, a good down payment. That process was effectively hijacked in the conference with our Republican friends. And now, effectively, what they are doing is rewriting the Medicare program and threatening the Medicare program.

Medicare has been the heart and soul to our seniors. It's reliable, dependable, and for seniors across this country, they know it means that they can choose their doctor, they can choose their health care system, and it works. Retirement is built upon Medicare and Social Security. We can't let political idol attempt to undermine it and destroy it. And this, I believe this proposal begins that process.

RAY SUAREZ:

Senator Grassley, how do you respond to that critique? The idea that North Dakota to get a drug bill, you ended up overhauling Medicare at the same time?

SEN. CHARLES GRASSLEY:

When Senator Kennedy a couple years from now gets the chance to reflect upon this bill, he will realize that the bill that comes back from conference is much stronger for seniors than either the Senate bill or the House bill. This bill is really a good bill. The most important thing is it's bipartisan.

Secondly, it's universal. It's comprehensive, and most importantly, it gives seniors the right to choose. And what we have done here is tried to prepare Medicare for the practice of the medicine of the 21st century. We've done that by people that want to keep traditional Medicare, having the right to keep it if they want to with prescription drugs or without, the right to choose. And then we wanted to have plans that were closer to what baby boomers had in retirement.

So that's why we set up the system of Preferred Provider Organizations for people to be able to have something that is an integrated drug benefit and the right to choose their doctors to a greater extent than they would have in HMO's.

RAY SUAREZ:

The way it's structured now, Senator Grassley if it passes as written, do you run the risk that now covered seniors who already have a prescription drug plan through other sources, would be dropped by those other providers because now the federal government is becoming the backstop insurer?

SEN. CHARLES GRASSLEY:

Well, 20 percent or about $80 billion of this $400 billion has gone into doing what we could to and along with regulatory flexibility, to encourage these plans to be kept stable. We didn't do it just because we wanted to subsidies corporate plans. We did it because with that 28 percent subsidy, it would be much cheaper to keep the corporate plans alive than to have them dumped on the government at about $1200 a year.

SEN. EDWARD KENNEDY:

You're absolutely right. This bill is going to accelerate the retirees being dropped by their health care system. And also it's going to ensure that seven million… listen to this… seven million of our poorest and neediest senior citizen that are Medicaid recipients are going to be denied the help and assistance they're getting from the states now when they do what they call a wraparound with their Medicare program.

This doesn't make sense. There are going to be more people that are going to be hurt by this program than actually helped by it. Beyond that, one of the most important things we did in the Senate was to effectively eliminate what they call the asset test.

The asset test means if you have a car worth $4200, burial plot worth $1,500, insurance policy worth $1,000, you are excluded from the benefits. We eliminated it and said maybe you can have those kinds of assets and still be included. This Conference Committee eliminated that provision for some three million of our senior citizens who are most vulnerable we should have a bill out of that conference which was just a prescription bill, but not something that is going to coerce our seniors out of Medicare into HMO's.

That's what this bill is going to do. It provides the billions of dollars in subsidies, it effectively is going to provide that kind of coercion. That's not what our seniors want. They wanted a prescription drug only bill. We could have had a solid down payment on it and I think we've missed an opportunity.

RAY SUAREZ:

Well, Senator Kennedy, doesn't the bill protect low income seniors by factoring them with no deductible, no gap payments as there are for higher income seniors.

SEN. EDWARD KENNEDY:

First of all, we went up to, in the Senate , 160 percent of poverty. They went down to 1 percent of poverty. That's one million of our senior citizens, and they've re-imposed the asset test for the lower group which will exclude two million more.

And what they've also done is made the Medicaid program that wraps around the Medicare program in the various states, it prohibits… listen to this. It prohibits the states from being able to provide those kinds of co-pays and deductibles.

Sure, they're only a dollar, maybe three dollars for a prescription maybe a week, but that accumulates and for the neediest and poorest of our seniors, we have to say that that's not the way to go if we are trying to protect our seniors and protect Medicare.

RAY SUAREZ:

Senator Grassley, does this bill both, given what Senator Kennedy said and also the wider prescription aspects of the bill, doesn't it bring in more of means testing than has ever been known in Medicare before?

SEN. CHARLES GRASSLEY:

We believe that higher income people ought to pay a higher premium. We ought to keep our resources for those who have the greatest need. And I think it's wrong for Senator Kennedy to say that people are going to be forced into something because the essence of this bill is the right to choose. I emphasized that many times. I'm not going to say it again, even on this program.

And as far as corporate plans are being dropped, Senator Kennedy could not write a bill that would tell corporation X or Y or Z that you couldn't drop your plan. What we have to do is provide for what is happening every day with or without this bill.

Some companies feel they can't afford it. Wouldn't it be better to have something that seniors don't have today? 35 percent of the seniors have nothing. This is setting up a program that's comprehensive, universal, voluntary for seniors to have something when there is a corporate plan dropped. And it seems to me the essence of this is to get everybody covered; give everybody an opportunity. Don't force anything on anybody. Let them have the right to choose. That's the element of this bill, comprehensive and universal and right to choose.

SEN. EDWARD KENNEDY:

Let me just add one word.

RAY SUAREZ:

Go ahead, Senator Kennedy.

SEN. EDWARD KENNEDY:

In the House bill that passed it passed by one vote out of 435. It was a completely Republican bill. As your story earlier this evening shows, the difficulty they're having because they have to try to round up the votes over there.

We had 76 votes in the United States Senate with a bipartisan. We lost ten Democrats, eleven Republicans. It was bipartisan. They effectively have played the card on this and it is the kind of bipartisan effort.

Seniors need a prescription drug program. This effectively is the beginning, I believe, of the dismantling of the Medicare program, and I think… I hope we will not permit that in the Senate and I hope we'll go back to where we were before. We still have time. We still have time. Seniors needs program.

Beyond that, we didn't deal with the costs. We need access to prescription drug and costs. There is nothing in this legislation to deal with costs. We've seen the escalation of these prescription drugs going up dramatically.

SEN. CHARLES GRASSLEY:

There are three things in this bill that deal with cost. Number one is we are going to subsidize for low income people 90 percent of the cost of the drugs.

Number two, we are going to put generics on the market faster than patent and companies will let them go on the market.

And thirdly, we are going to have importation of drugs.

And lastly, and I should say fourth, we are going to have plans competing and bidding for, with the drug companies to drive down the price of drugs. So everybody is going to have drugs cheaper as a result of this legislation.

RAY SUAREZ:

Sen. Kennedy.

SEN. EDWARD KENNEDY:

You're not really serious about the importation of drugs.

SEN. CHARLES GRASSLEY:

Not as serious as I'd like to be.

SEN. EDWARD KENNEDY:

There you go. Effectively, they have denied the importation of drugs from Canada that would have had some impact. So all of our fellow citizens that are going over there, or even communities or even states like… that wanted to do that. But you closed that, didn't you, Chuck? Didn't you close that?

SEN. CHARLES GRASSLEY:

Ted knows that I support a stronger bill than come out of Conference with regard to the re-importation of drugs.

SEN. EDWARD KENNEDY:

Join me and we'll have a good one.

SEN. CHARLES GRASSLEY:

You can't let a… let desiring a perfect bill stand in the way of getting something practical done.

SEN. EDWARD KENNEDY:

Final point that I'd say, it is better not to have a bill than to have a bad bill.

RAY SUAREZ:

Senator, earlier Congressman DeLay brought up that sometimes you have to get what you can when you can get it. But there are some opponents in your own Republican Party who are worried, Senator Grassley, about the future of the cost of this bill over the long haul.

SEN. CHARLES GRASSLEY:

Let me tell you. Those are probably the very same people that don't want the government to even have this program. And there are a few likes that because they believe the situation is going to get worse the more you get government involved.

I happen to believe that Medicare is part of the safety net, social fabric of America and it needs to be strengthened. That's what we're doing. I think on the left, maybe have you some Democrats that believe in more government involvement, but they want to do it their way and they would like to spend twice what we're spending in this bill.

We're trying to do what is affordable, what is doable today and we'll build on that.

RAY SUAREZ:

Senator Kennedy, why do you think you lost the AARP on this one?

SEN. EDWARD KENNEDY:

I think the AARP, with all respect, is out of touch with its membership, not representing their membership or their views. And just about every other senior citizen group in the country is suggesting a no vote on this.

SEN. CHARLES GRASSLEY:

Can I speak.

RAY SUAREZ:

Go ahead, Sen. Grassley.

SEN. CHARLES GRASSLEY:

The democrats have condemned the AARP on this. It seems the AARP. Is a pretty good group until they start working with Republicans. Then they're not a very good group.

SAID ARIKAT:

Do you think will you get a vote tonight?

SEN. CHARLES GRASSLEY:

It will pass, it won't pass by a large margin but it will become law and we'll have a large bipartisan majority in the United States Senate .

RAY SUAREZ:

Thank you, both gentlemen.