Opening Statement of the Hon. Bill Thomas, a Representative in Congress from the State of California,
and Chairman, Committee on Ways and Means

Hearing on Integrating Prescription Drugs into Medicare

April 17, 2002

Good morning.  As we consider ways to modernize Medicare, it’s important that we not lose sight of how Medicare has improved the lives of millions of our nation’s seniors.  Yet to fulfill Medicare’s true promise, we cannot be satisfied with the status quo.  Prescription drugs are just as important to modern health care as hospital and physician services were when Medicare was enacted in 1965.

The typical senior now takes more than 20 prescriptions a year, and in 2005 will spend more than $2,400 on prescription drugs.  They are often paying the higher prices because they lack negotiating power.  Medicare has not kept pace with modern medicine, and the lack of a comprehensive prescription drug benefit epitomizes just one way it falls short.

This Congress, the Committee has held 20 different hearings examining areas where Medicare can be strengthened and improved.  We have covered a lot of ground:  reducing Medicare’s regulatory burdens, improving rural health care, securing Medicare’s solvency in the long-term, reforming antiquated cost-sharing and Medigap, integrating disease management, reducing medical errors, and rationalizing payments to physicians and Medicare+Choice.   While integrating prescription drugs is the most high-profile topic Congress faces, a comprehensive bill to strengthen Medicare should address all of these issues. 

Our guidelines for adding a prescription drug benefit:

1. We cannot simply add a new prescription drug benefit.  The issues identified in our 20 hearings, while not as politically “sexy,” are  serious and cannot be left to fester.
2. We should rely on private sector innovation in delivering the drug benefit with a strong government guarantee to all Medicare beneficiaries.  CBO has certified that the private sector approach delivers the most savings per prescription.
3. Beneficiaries should have a choice of competing prescription drug plans and be able to select actuarially equivalent coverage.  A government-run “one-size-fits-some” program is unacceptable.
4. All low-income beneficiaries deserve extra help and it should be provided across the country uniformly rather than forcing them to rely on a patchwork of varying state programs.
5. The benefit should be affordable to both the taxpayers paying the bills and the beneficiaries paying the premiums.

In the last Congress, the House passed a comprehensive prescription drug benefit.  Unfortunately, the Senate failed to act.  Last month, the House passed a Budget Resolution, which provides ample resources -- $350 billion over 10 years -- to strengthen Medicare and add a prescription drug benefit. We have the opportunity this spring to pass legislation to strengthen Medicare and integrate prescription drugs.  The Speaker has asked us to have a bill on the floor before Memorial Day in order to give the Senate sufficient time to respond and to maximize our chances for enactment.

Today we will hear from the Bush Administration, the General Accounting Office, AARP and industry groups about their thoughts for integrating prescription drugs into Medicare.  Welcome to the Committee.  I would now like to recognize the Ranking Member, Mr. Rangel.