Congressman McDermott Comments on Pending Republican Medicare Legislation
For Immediate Release - November 22, 2003

McDermott addresses the problems with the Medicare bill the day before the vote in the House of Representatives, expressing concern that it uses the cover of prescription drugs to pass a bill designed to weaken and privatize Medicare.

Congressman McDermott addresses the problems with the Medicare bill at a "Turkey of a Bill" press conference on the day before the vote in the House of Representatives.

I believe we must provide a drug benefit in the Medicare program. America's seniors desperately need help covering the cost of their prescription drugs, which will total nearly two trillion dollars over the next ten years. But we must also stay true to the promise of high-quality, affordable health care we have made to senior and disabled Americans.

In June 2003 the Senate and House of Representatives both passed bills that would add prescription drug coverage to Medicare. The Senate bill provided a good benefit, while House Republicans used the cover of prescription drugs to pass a bill designed to weaken and privatize Medicare. Unfortunately, in reconciling these two very different plans the rigid Republicans in the House insisted on furthering their politically agenda to change Medicare.

This bill does uses the lure of prescription drugs to fundamentally change Medicare to a privatized system, to undermine benefits and financing, and favors the pharmaceutical and insurance companies over seniors.

The real goal of this bill is to privatize Medicare. Medicare was created to ensure our seniors would have stable and comprehensive health care. We provide Medicare because many seniors could not find good, affordable health insurance in the private market. And yet, Republicans have tried for many years to shift Medicare away from a program that offers stable, defined benefits to a voucher program. Under this bill, traditional Medicare will "compete" with private plans. The problem is, we know the private plans try to enroll only the younger and healthier seniors. This will raise the premium on anybody who stays in the regular program. The Republicans call this a "demonstration project" but it could take in over 6 million seniors, and could be expanded to cover the whole country after six years. To privatize Medicare is wrong.

Millions of seniors will lose their existing, better retirement benefits. When Medicare provides prescription drugs, many companies will use the opportunity to eliminate coverage they currently provide for their retirees. Under this bill, despite about $80 billion in subsidies to businesses, nearly 3 million Medicare beneficiaries will lose their current benefit, including about 50,000 in Washington State. Retiree drug coverage is almost always better than the scant coverage provided under this plan.

The coverage in this plan is weak and inconsistent. Every senior will pay a premium of at least $35 a month, and many will pay more into the program than they will get back. Coverage in the Republican plan has a big hole-after $2,200 in drug costs, there is no coverage until a senior has spent $3,600 out of pocket. Between premiums, co-pays, and the doughnut hole, a senior would spend over $4,000 to get $5,000 worth of drugs. Any senior who spend more than $180 per month on medications will have many months in the year when they pay 100% of their drug costs and still pay a premium every month.

The bill is designed to protect and increase drug companies' and insurance companies' profits. The pharmaceutical industry will reap about $140 billion in profits if this bill becomes law. The bill explicitly prohibits the Secretary of Health and Human Services from negotiating lower drug prices on behalf of America's 40 million Medicare beneficiaries. And, the bill does not allow Americans to import drugs from countries where prices are lower. Insurance companies receive tens of billions of dollars in subsidies just to take Medicare's business, and the government will pay them back if they lose money. All this money could be better spent providing a real benefit and using the purchasing power of all of America's seniors to gain real discounts.

I will continue to fight to provide our seniors with a meaningful prescription drug benefit. And I will continue to fight to preserve Medicare as a stable and trustworthy public program that will effectively care for our seniors. I cannot support this Republican bill that provides so little and destroys so much.