Opening Statement of the Hon. Gerald D. Kleczka, M.C., Wisconsin

Hearing on Medicare Reform: Laying the Groundwork for a Prescription Drug Benefit

March 27, 2001

Madame Chair, thank you for holding today's hearing. This Subcommittee has been given a very important charge--crafting a meaningful prescription drug benefit for our nation's seniors--and I appreciate the Chairwoman's leadership and thoughtful approach to further education Members on various policy options.

The year is young, and there is ample opportunity for us to try to find bipartisan agreement on issues of mutual interest.

Adding prescription drug coverage under Medicare is by far the single most important Medicare reform or modernization proposal under consideration this year. No matter where each of us lives--whether it is Connecticut, Minnesota, Florida, or Washington State--we have seniors looking to us to modernize the Medicare program and provide some assistance to help with the escalating costs of life-enhancing and life-saving prescription medications.

Unfortunately, if we are held to the budget before us, we are less likely to succeed. A budget is a statement of priorities, and drug coverage is clearly not a priority of this budget.

Right now, our task is to develop a bipartisan prescription drug benefit that will provide adequate, sustainable assistance to senior citizens and disabled persons who depend on Medicare. The bottom line is that the Health Subcommittee should not be held hostage to a budget that shortchanges a Medicare drug benefit.

If it turns out that the package we believe is necessary to meet the needs of Medicare beneficiaries doesn't fit within the budget currently before us, then the House will have to prioritize.

Does Congress want an adequate prescription drug benefit for the elderly or does it want to repeal the estate tax? Does Congress want an adequate drug benefit for senior citizens or does it want a new missile defense Star Wars program?

The Chairwoman is proceeding in the right way. She is holding educational seminars to help our members focus on the important areas in the prescription drug debate and other issues before the Committee. We have scheduled hearings that will enable us to determine how best to help Medicare beneficiaries with prescription drug costs.

However, so far this year, we have yet to see an appropriate drug benefit proposal. I am not being partisan -- I am putting the responsibility on all of us. I think we would be better off reporting NO drug benefit than reporting a $105-153 billion plan that would undoubtedly fall so dramatically short of what is needed.

We should develop a meaningful package. If the decision is made not to proceed with it, so be it. But, we will have done a real service by developing a package that can work if and when we are willing to dedicate the necessary resources to make it work. We can even specify or suggest routes to obtain the needed resources -- through taxes, through premiums, through surplus expenditures, or a combination.

In this era of record surpluses, we should be able to move forward with a real Medicare benefit. But, if we cannot, then we should continue working on mechanisms to lower drug costs through drug reimportation, improved payment policies for the limited drugs Medicare currently covers, patent reform, and other proposals to make drugs more affordable in the absence of coverage.

Finally, while I am looking forward to the testimony from our witnesses, we should not be lulled into a sense of complacency because it appears that many beneficiaries currently have drug coverage.

Coverage has declined since the study data were collected in 1998, and recent data from the Commonwealth Fund show that only 50 percent of beneficiaries have some type of coverage throughout a given year. In addition, only the poorest beneficiaries who are also on Medicaid have coverage that is comprehensive, affordable and reliable. That's why it's so important to have a Medicare benefit that is universally available.

CBO's baselines and estimates should be a wake-up call to President Bush and Congress. Creating a prescription drug benefit will be costly, but we can afford it if we rearrange our priorities. I look forward to working with the Chairwoman and our colleagues on the Committee to see if we can do better.