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(WASHINGTON, D.C.) – On Monday, March 15, U.S. Senator Patty Murray met with seniors at the Olympia Senior Center to explain the new Medicare prescription drug law and answer questions.

Senator Murray's Remarks Follow:

Thank you, Eileen [Eileen McKenzie Sullivan, Exec Dir. of Senior Services for South Sound], and thank you all for coming today.

I want to talk with you about the new Medicare Prescription Drug law. I've got some real concerns that I want to share with you. Ever since I came to the Senate, I've been trying to improve health care for seniors and for everyone in our state. As I start out today, I want to share with you some of the principles that guide my work.

Principles

First, I believe in making healthcare more affordable and more accessible. That's why I helped save the Community Access Program, which is helping thousands of our neighbors who don't have insurance get healthcare. It's why I've fought to fund Community Health Centers, clinics where people can walk in and get care, rather than go to the emergency room. It's why I've fought to strengthen Medicare and Medicaid. It's why I'm working to increase Medicare payments to Washington state – so that more doctors will accept Medicare patients. And that's why I passed legislation to bring generic versions of drugs to market faster – so drug prices will fall. So making healthcare affordable and accessible is my top priority.

Second, I believe in protecting our most vulnerable from the disabled to widows, low-income families, veterans, and children. That's why I fought to create the Children's Health Insurance Program. It's why I fought attempts to weaken Medicaid by turning it into a block grant. And it's why I fought to get another $200 million in federal funding for Washington's Medicaid program. So protecting our most vulnerable is one of my priorities.

And third, I believe in high-quality health care. We have some of the best doctors and most innovative medical treatments in the world. That's why I helped double funding for the National Institutes of Health – so we can find new cures for diseases. And it's why I helped reform the FDA - so we can get safe, new innovations to patients faster.

So there are a lot of positive values that I've fought for over the years to make health care more affordable, more accessible and more innovative, and to protect our most vulnerable. But it's clear that this new prescription drug law does not meet my standards, and that's why I voted against it.

My Parents and Medicare

Before I get into the details, I want you to know where I'm coming from on Medicare. When I think of Medicare, I don't just think of a government program. I think of my parents. They worked hard all their lives, and they never had much.

My dad was a World War II veteran. He earned a Purple Heart for his service in Okinawa. Later, he was disabled by multiple sclerosis. My mom took care of him. She also worked, went to school and raised 7 children. She never complained or let us know how much she sacrificed for us. But I do know that when my parents where in their 60s their medical bills where massive. Before they were eligible for Medicare, they faced real financial strains. They literally "limped onto Medicare."

When my father was diagnosed with M.S., my parents saw their insurance premiums increase to $2,000 a piece overnight. And their premiums increased dramatically every year. My parents were stuck because no other insurance plans would cover my father. And they struggled. My father was desperate to turn 65, because he was not sure how much longer he could afford insurance or how much longer they would cover him. There were times when my parents feared going to the doctors because of the impact on their deductible and premiums.

And I say thank goodness for Medicare!

My parents knew that once they reached 65 they would have some guarantee of affordable, quality health insurance. I'll never forget how much they needed Medicare. I'll never forget how they relied on the protection and the piece of mind it provided them.

When I came to the Senate, I promised myself that I would make sure Medicare was there for the people I represent just as it was there for my parents. And it's a promise that I keep.

Back in 1997, many in Congress wanted to make seniors wait until they were 67 before they could get Medicare coverage. I know that if my father had been forced to wait another 2 years until he turned 67 to get Medicare, it would have financially devastated my parents. So in 1997, I stood on the Senate floor and fought that proposal with everything I had – and we won.

Whenever I see something in Congress that's bad for seniors, I don’t hesitate to stand up and speak out. For me, protecting Medicare means keeping a promise. It means keeping a promise to seniors who have worked their whole lives, keeping a promise that medical bills will not force you into poverty, and keeping a promise that you can count on Medicare when you need it.

Unfortunately, the prescription drug law that just passed doesn't keep that promise and that's why I voted against it. I know that some seniors are better-off than my parents were, and some seniors are worse-off. But they all deserve the protection and piece of mind that Medicare offers today. And when I look at what Congress passed, I know that seniors deserve better.

My Work

For the past few years, I've been working to add a prescription drug benefit to Medicare. During the 106th and 107th Congress, I helped draft a prescription drug bill. Every year, I've used my seat on the Senate Budget Committee to set aside money for a new benefit. I've voted for some good drug plans, including the Graham-Miller Kennedy bill in the last Congress and the Senate drug bill in June 2003.

I've written and introduced legislation to make Medicare more fair to seniors in our state. And I've worked to improve Healthcare for seniors on the HELP Committee, the Labor-HHS Appropriations Committee and on the Senate floor. In Congress there are really two views about Medicare.

I See Medicare as a Success to be Strengthened

I see Medicare as a success. It's a solid foundation to protect seniors. Coupled with Social Security, Medicare is the most important anti-poverty program ever. Before Medicare 44 % of seniors were uninsured. Today it's just 1%. Before Medicare 29% of seniors lived in poverty. Today it's down to about 10%.

Medicare is a success story. It promises our seniors that they will have health care security regardless of their ability to pay, regardless of where they live, and regardless of their medical condition. Not only does Medicare help seniors, it also forms the foundation of all healthcare.



Medicare helps train our doctors. Medicare payments help keep rural hospitals open. And Medicare helps keep emergency rooms and neonatal units operating. Medicare is open to every doctor and hospital. It doesn't force providers into restricted networks. It lets doctors make decisions based on what their patients need -- not on some cost-saving mandate from an accountant.

It's troubling to think of where rural America would be today – and where inner city trauma centers would be today – without Medicare. So I approach this debate with a clear understanding of the importance of Medicare to our seniors and to our entire health care system. Others Don't Like Medicare



But others in Congress see Medicare as a problem – as an outdated social program -- whose work would be better done by private, for-profit companies. They want to replace it with private plans. But I think that history has proven that view to be incorrect.



After all, just look back to why we created Medicare in the first place. We created Medicare because the private insurance market was failing seniors. It wasn't protecting them, so we created a program to put seniors first.



But today, too many have forgotten that history and are running right back to the same private sector that failed seniors for decades. So this drug plan doesn't put seniors first – and that's something we've got to fix.



Now I want to turn to the new law and what it means. And first, I want you to understand that it makes some dramatic changes to Medicare.



Rapid Changes to Medicare

It will not be the same Medicare that you know today. It makes three radical changes. First, it treats seniors differently – and that's a big change. Until now, Medicare has always treated seniors the same no matter how rich or poor they are, no matter how sick they are, and no matter where they live. But this law changes that. Now seniors will pay different amounts – and get different benefits -- depending on how sick they are and where they live.

So we've given up the fair and equal benefit, and we haven't gotten a lot in return. Second, for the first time Medicare will now be means-tested. Depending on your income and your assets, you might not get the same benefits as other seniors.

Finally – and this is a big change – Medicare won't administer this drug benefit. Instead it will be run by for-profit companies that are primarily concerned with their bottom line. So as we look at this new plan, keep in mind that it changes Medicare in 3 big ways it treats seniors differently depending on where they live and how sick they are, it includes means-testing for the first time, and it has insurance companies administer the benefit and make the decisions on what you pay and what you get in return.

Let me walk you through the benefit with this chart:

This is how it's supposed to work. Your payments and benefits are determined by how much your drugs cost each year. On this chart, we have the three different categories. What's on the left here is for seniors whose out-of-pocket drug costs are between zero and $2,250. If your total annual drug costs are under $2,250, you pay $35 dollars each month as a premium. But that amount is not set by law. The actual premium could be much higher – and it could increase every year with no limit. You also pay $250 a year for your deductible, and that can go up every year as well.

In return, the plan will cover 75 percent of your drug costs, and you'll pay the other 25 percent. Now we're moving over to the middle part of the chart. If your annual drug costs are from $2,250 to $5,100, then you've got a problem. The plan will give you no coverage to fill that gap.

But, you still have to pay your premiums – and all of your drug costs when you hit that threshold. This is called the coverage gap or doughnut. That is very troubling to me.



That's one of the reasons why I voted against this bill. I think it's wrong to leave thousands of Washington seniors without help. You deserve better. And under the new law, you cannot buy any supplemental coverage to protect you from this big gap. In fact, this law prohibits plans from offering you supplemental drug coverage.

So you get stuck with the bills, and you can't even protect yourself. I think that's wrong, and I know seniors deserve better. Now let's move on to the right hand side of this chart. If your drug costs are over $5,100, then the plan will pay 95% of your drug costs. And you'll pay 5 % for coinsurance. This is known as catastrophic coverage. But there's one thing here that's important. This coverage is subject to a means test.

So let me just summarize this chart:

  • If your annual total drug costs are under $2,250, you'll pay a premium, deductible and copay, but those amounts can rise every year. Even the $35 is not set in law.


  • If you're total annual drug costs are between $2,250 - $5,100 you get no coverage from the plan while you're in that gap, and you still have to pay the premiums.


  • And finally, if your total annual drug costs are over $5,100, you pay 5 percent, and the plan pays 95 percent, subject to means testing.


That's what we know about the plan so far.

Prohibits Bulk Purchases by Medicare

Since all of these categories depend on how much your drugs cost, it would make sense for the law to help reduce drug prices. One way to lower the cost of drugs is to buy them in bulk. When you buy a lot of drugs, you can get a cheaper price. Right now the VA buys drugs in bulk, and it can negotiate much cheaper prices. I think the federal government should be able to do the same thing to lower the cost of your drugs.

But under this law, the federal government is prohibited from negotiating volume discounts. Congress could have allowed Medicare to make bulk purchases so your drugs would be cheaper, but instead it prohibits it. That's wrong. You deserve better. In addition, there are a lot of things that we don't know. I've listed some of these unknowns on the next chart.

The first unknown is "Can I afford it?"

We don't know if private companies will offer affordable plans, we don't know what the premium will be, and we don't know what the deductible will be. Proponents claim that it will be $35 for the premium and $250 for the deductible, but that’s not set in stone. It’s just a suggestion.

The plans get to decide what they want to charge. There is no limit, and it can go up every year.

The next question is, "Will I lose my retiree health coverage?"

The law provides some money to employers, but the Congressional Budget Office estimates that nationwide 6.4 million seniors and disabled will lose their retiree coverage. Here in Washington State, it's estimated that 47,250 seniors will lose their current retirement benefits. So seniors that have security and good coverage today could lose it tomorrow because of this law, and that is unacceptable to me.

Here's another question we don't know the answer to:

"Will I be forced into a restrictive HMO?"

If the drug-only plan that is offered in your area is too expensive, the only way to get drug coverage is to join an HMO for all of your care. We know that HMOs limit your access to doctors and hospitals. Some seniors – especially seniors in rural areas – will only have one way to get drug coverage under this law – and it will be to join an HMO.

Here's another big unknown:

Another question relating to the plan is, "Will my drugs be covered?"

We don't know. It's up to the individual plan. You have to sign up not knowing if the drugs you need are covered, and plans can drop drugs whenever they want. In addition, they only have to cover one drug in each class of drugs. So it's possible that the drug you need will not be covered.

And there's another thing we don't know:

"Can I keep my doctor?"

It's up to the HMO to decide which doctors and hospitals are part of their network. You might – or might not – be able to keep your doctor. It's up to the HMO.

These five questions are very big issues for seniors. They really determine whether this is a good deal or not. We don't know the answer to any of these questions, and I wasn't comfortable voting for a bill with all these critical questions unanswered. I can say this: the things that we do know about this bill are disturbing. That's why I think this drug law is a bad deal for Washington's seniors.



On this chart, I've listed six reasons why this is a bad deal for Washington's seniors. 47,250 seniors could lose their retiree health benefits in Washington state. 91,900 poor seniors will pay more for drugs. These are people who today are eligible for both Medicare and Medicaid. 33,360 will pay more for Medicare Part B. Rural seniors will likely pay more for less coverage.

It will be similar to how Medicare + Choice works today in Washington. Seniors in urban areas get benefits that seniors in rural areas don't get. Seniors with chronic, deadly diseases are not guaranteed the drugs they need. That's because HMO's only have to cover one drug in each class. And the HMO gets to decide which drugs are in that class.

Finally, it's a bad deal for Washington's seniors because many will be forced into HMO's with restrictive networks and limits. If the drug-only plan is too expensive, and your private retirement plan drops your coverage, the only way to get drug coverage will be to join an HMO.

So that's an overview of how the plan works, some of the things we just don't know about it, and six reasons why it's a bad deal for Washington's seniors.

WE CAN MAKE IT BETTER

I know how important Medicare was to my parents, and I how important it is to the more than 759,000 Washingtonians who depend on it today. I'm not going to sit back and let this bad law hurt the seniors I represent. I'm going to fight with everything I've got to make it better, and I'm going to need your help. Over the next 18 months, the Department of Health and Human Services will be making thousands of decisions that affect the plan you'll be offered.

And remember that this plan doesn't take effect until 2006. I believe we have time to minimize some of the damage. Here's what we can do:

Raise Awareness Among Seniors

First, we've got to make sure that every senior knows what this law means to them. That's why I'm holding forums like this. That's also why I've put a lot of information on my website about the new law.

I want to encourage you to share what you've learned today with your friends and neighbors. Give them a copy of your handout, tell them about my website, write a letter to the editor, and speak out at seniors meetings.

Tell the White House and Congress

Once we've got a large group of seniors who can talk about the bill, it's time to raise our voices – and that’s the second step. After all, we got where we are today because seniors spoke out, and we can do it again. We've got to get the White House and Congress to see that this bill has problems.

Right now they think it's perfect. They're going to be traveling around the country telling you how great it is. They won't admit that this bill will hurt our seniors and undermine the protection that Medicare guarantees. So we've got to make sure every senior understands what it means and then we've got to tell the White House and Congress that it needs to be fixed.

Fight In the Senate

The third step is in Congress – and I'll be leading that fight. I'm going to use my committee positions to fight for the changes we need. I'm going to call for Congressional hearings. And I'm going to support legislation to fix the drug program. Let me mention a few examples: I'm going to support efforts to make sure the premium doesn't skyrocket on seniors. I'm going to work to limit out-of-pocket expenses. I'm going to keep fighting to help retirees keep their current coverage. I'm going to work to close that huge benefit gap and to make sure all seniors are treated fairly – no matter how sick they are and where they live. And I'll continue to protect the rights of those seniors who enroll in PPO's and HMO's.

In addition, as a member of the Labor, HHS and Education Appropriations Subcommittee, I'm going to ensure that HHS has the resources to provide accurate information to seniors and the disabled so you can make informed decisions.

It Won't Be Easy

There is time to make improvements, but it won't be easy. A lot of people want to keep the benefit exactly as it is. They are very powerful forces in Washington, D.C.

But I know that we can stand up to them. That's why I'm holding this forum – so that you'll understand what this bill means for you – and so that we call for those in Washington, D.C. to give seniors the benefit you deserve. I'm going to be your partner in that fight every step of the way. I want to encourage you to share your thoughts with me, the White House, and the people who represent you in Congress.

I want to invite you to keep in touch in touch with me. On my website I've got a whole section with information on the prescription drug law. The address is murray.senate.gov/rx

If you sign up on my web page or here with my staff, I'll send you updates on what's happening in Congress and what I'm doing to improve the prescription drug law. It's going to be tough fight, but I know we can do it.

After all, in 1988 Congress passed a bill to change Medicare and provide some catastrophic coverage. When seniors saw what it meant, they spoke up. A year later, that same Congress voted to repeal the law because seniors told them it wasn’t a good deal.

I'm not trying to repeal this law, but I know that if we work together, we can make it better. I know that seniors deserve better, and I'm proud to be your advocate in the United States Senate.