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89–585 2003

H.R. 1, MEDICARE PRESCRIPTION

DRUG AND MODERNIZATION ACT

OF 2003

HEARING

BEFORE THE

COMMITTEE ON RULES 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

LEGISLATIVE DAY OF WEDNESDAY, JUNE 25, 2003

(

Printed for the use of the Committee on Rules

(II)

COMMITTEE ON RULES 

DAVID DREIER, California, Chairman 

PORTER GOSS, Florida 

JOHN LINDER, Georgia 

DEBORAH PRYCE, Ohio 

LINCOLN DIAZ-BALART, Florida 

DOC HASTINGS, Washington 

SUE MYRICK, North Carolina 

PETE SESSIONS, Texas 

THOMAS M. REYNOLDS, New York 

MARTIN FROST, Texas 

LOUISE MCINTOSH SLAUGHTER, New 

York 

JAMES MCGOVERN, Massachusetts 

ALCEE L. HASTINGS, Florida 

WILLIAM PITTS, Staff Director 

KRISTI WALSETH, Minority Staff Director 

SUBCOMMITTEE ON LEGISLATIVE AND BUDGET PROCESS

DEBORAH PRYCE, Ohio, Chairman 

PORTER GOSS, Florida 

DOC HASTINGS, Washington 

SUE MYRICK, North Carolina 

DAVID DREIER, California 

LOUISE MCINTOSH SLAUGHTER, New 

York 

MARTIN FROST, Texas 

SUBCOMMITTEE ON TECHNOLOGY AND THE HOUSE

JOHN LINDER, Georgia, Chairman 

LINCOLN DIAZ-BALART, Florida 

PETE SESSIONS, Texas 

THOMAS M. REYNOLDS, New York 

DAVID DREIER, California 

ALCEE L. HASTINGS, Florida 

JAMES MCGOVERN, Massachusetts

(iii)

C O N T E N T S 

JUNE 26, 2003 

Page 

Opening Statement of the Hon. Martin Frost, ranking minority member of 

the Committee on Rules ...................................................................................... 2

Opening Statement of the Hon. Louise Slaughter, a member of the Committee 

on Rules ................................................................................................................ 3

Opening Statement of the Hon. James McGovern, a member of the Committee 

on Rules ................................................................................................................ 4

Opening Statement of the Hon. Alcee Hastings, a member of the Committee 

on Rules ................................................................................................................ 5

Statement of: 

Johnson, Hon. Nancy, a Representative in Congress from the state of 

Connecticut .................................................................................................... 8

Walden, Hon. Greg, a Representative in Congress from the state of Oregon ................................................................................................................ 11

Thompson, Hon. Mike, a Representative in Congress from the state of 

California ....................................................................................................... 19

Allen, Hon. Tom, a Representative in Congress from the state of Maine ... 20

Langevin, Hon. Jim, a Representative in Congress from the state of 

Rhode Island .................................................................................................. 20

Kanjorski, Hon. Paul E., a Representative in Congress from the state 

of Pennsylvania ............................................................................................. 21

Tierney, Hon. John F., a Representative in Congress from the state 

of Massachusetts ........................................................................................... 22

Brown, Hon. Sherrod, a Representative in Congress from the state of 

Ohio ................................................................................................................ 35

Sandlin, Hon. Max, a Representative in Congress from the state of Texas 36

Buyer, Hon. Steve, a Representative in Congress from the state of Indiana .................................................................................................................. 52

Pallone, Hon. Frank, a Representative in Congress from the state of 

New Jersey .................................................................................................... 55

Strickland, Hon. Ted, a Representative in Congress from the state of 

Ohio ................................................................................................................ 57

Capps, Hon. Lois, a Representative in Congress from the state of California .............................................................................................................. 58

Kaptur, Hon. Marcy, a Representative in Congress from the state of 

Ohio ................................................................................................................ 61

Gutknecht, Hon. Gil, a Representative in Congress from the state of 

Minnesota ...................................................................................................... 62

Emanuel, Hon. Rahm, a Representative in Congress from the state of 

Illinois ............................................................................................................ 63

Burgess, Hon. Michael, a Representative in Congress from the state 

of Texas .......................................................................................................... 66

Gingrey, Hon. Phil, a Representative in Congress from the state of Georgia ................................................................................................................... 67

Weldon, Hon. Dave, a Representative in Congress from the state of Florida ................................................................................................................... 69

Dooley, Hon. Calvin, a Representative in Congress from the state of 

California ....................................................................................................... 76

Tauscher, Hon. Ellen, a Representative in Congress from the state of 

California ....................................................................................................... 85

Hastings, Hon. Alcee, a Representative in Congress from the state of 

Florida ............................................................................................................ 86

McGovern, Hon. James, a Representative in Congress from the state 

of Massachusetts ........................................................................................... 92

Page

iv

Additional Material Submitted for the Record: 

Letter from the Honorable Edward M. Kennedy, Senator from Massachusetts ................................................................................................................ 23

Memorandum provided by the Social Security Administration: Legislative 

History: Vote Tallies for Passage of Medicare in 1965 .............................. 30

Letter from Mr. William D. Novelli, Executive Director of AARP ............... 40

Letter from the Honorable Nancy Pelosi, Democratic Leader; the Honorable Steny Hoyer, Democratic Whip; the Honorable Bob Menendez, 

Chair, Democratic Caucus; the Honorable James E. Clyburn, Vice 

Chair, Democratic Caucus; the Honorable Martin Frost, Ranking Democrat, Committee on Rules ........................................................................... 98

(1)

H.R. 1, MEDICARE PRESCRIPTION DRUG AND 

MODERNIZATION ACT OF 2003; H.R. 2596, 

HEALTH SAVINGS ACCOUNT AVAILABILITY 

ACT; H.R. 2559, MILITARY CONSTRUCTION 

APPROPRIATIONS, FISCAL YEAR 2004; AND 

H. RES. 297, PROVIDING FOR CONSIDERATION OF MOTIONS TO SUSPEND THE 

RULES 

WEDNESDAY, JUNE 25, 2003

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON RULES, 

Washington, DC. 

The committee met, pursuant to call, Thursday, June 26, 2003, 

at 12:50 a.m., in room H–313, The Capitol, Hon. David Dreier 

(chairman of the committee) presiding. 

Present: Representatives Dreier, Linder, Pryce, Diaz-Balart, 

Hastings of Washington, Sessions, Reynolds, Frost, Slaughter, 

McGovern and Hastings of Florida. 

The CHAIRMAN. The Rules Committee will come to order. Thank 

you all very much for being here for this extraordinarily unusual 

early-morning meeting. As you know, we have had a pattern of trying to—we are going to wait overnight for Members to come in the 

morning, but since we had the prospect of 30–some-odd witnesses 

testifying on this very important issue, we felt it important that we 

proceed with our witnesses. 

We are here for consideration of three rules that will allow for 

consideration of the Medicare Prescription Drug and Modernization 

Act of 2003, the Health Care Savings and Affordability Act, and the 

military construction appropriations bill, and the rule to provide for 

consideration of motions to suspend the rules. 

As we begin, let me first call on the Ranking Minority Member 

Mr. Frost for some opening statements. 

Mr. FROST. Mr. Chairman, I am going to submit a full opening 

statement for the record. 

The CHAIRMAN. Without objection, Mr. Frost’s statement will appear in the record. 

Mr. FROST. However, I would like to make some comments. This 

is a major example of major pieces of legislation being heard at outrageous times by this committee, outrageous in the sense that it is 

difficult for all the Members who want to testify, and it is, of 

course, difficult for the press to cover their testimony. 

2

When the new Majority took over and began this practice, my 

original assumption was that they were simply learning how to be 

a Majority Party. I later decided that they were simply incompetent. I reluctantly have now come to the conclusion that this is 

intentional, and that they have no interest of having substantive 

hearings at a time when Members of the House can testify and 

that they can be covered by the media. 

And, Mr. Chairman, I want you to know, this is one of the single 

most important pieces of legislation that will be considered this 

Congress and perhaps during any of our careers. And I consider 

this to be an outrage. And I want to serve notice that should the 

Majority conduct themselves in this way on another major piece of 

legislation while I serve as the Ranking Minority Member, I will 

recommend to our leadership that we do everything within the 

rules of the House to disrupt the proceedings and make it impossible for the House to proceed. 

The CHAIRMAN. Thank you very much, Mr. Frost. 

[The prepared statement of Mr. Frost follows:]

PREPARED OPENING STATEMENT OF HON. MARTIN FROST A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TEXAS

The Republican leadership and this Committee have a well-documented record of 

rushing legislation through the House, often before anyone outside the Republican 

leadership—and that includes the press, the public or Members—has the chance to 

read the fine print. 

We saw the perils of this strategy last month after the 2nd Republican tax bill—

what I call Part 2 of the Pioneers Enrichment Act—was signed into law. Many Republicans were embarrassed to discover that in their hurry to give millionaires 

$90,000 in tax breaks, they left out millions of working and military families. 

I mention this today because I want to sincerely counsel my friends in the Majority to avoid the temptation to employ their normal ‘‘rush-it-through-before-anyonecan-read-it’’ strategy to pass their so-called prescription drug bill. 

No one outside the Majority leadership has seen the final Republican bill, but it’s 

clear that Republicans are making a big, big promise to senior citizens. And it’s 

equally clear that when seniors read the fine print, they will be very, very disappointed. 

For instance, they’ll be shocked to discover that the plan Republicans call ‘‘comprehensive’’ actually contains a massive loophole for them to fall through. This 

‘‘donut hole’’ provision—it’s really a ‘‘sickness penalty’’—means that the Republican 

plan abandons seniors when they need help the most, forcing them to pay all of 

their own drug costs between $2,000 and $4,900. 

Seniors will discover that when Republicans say ‘‘Medicare reform,’’ what they 

really mean is that they dismantle Medicare—turning it over to HMOs and insurance companies—in the year 2010, just 4 years after this prescription drug plan 

goes into effect. 

And they’ll discover that when Republicans say coverage is ‘‘guaranteed,’’ what 

they really mean is that they get health coverage as long as HMOs and insurance 

companies get big profits. And we all know that won’t work—just ask the hundreds 

of thousands of seniors who have been dropped by HMOs over the past few years. 

My friends, senior citizens are going to be furious when they realize what a billof-goods you’ve sold them. They’ll remember your promise to provide all seniors with 

guaranteed and affordable prescription coverage. And they’ll notice—believe me, 

they’ll notice—that their premiums are higher, their choices are fewer, and their 

Medicare coverage has turned into an unreliable and expensive HMO plan. 

Frankly, I don’t know how you’ll explain it to seniors. I’m pretty sure that it won’t 

be enough to repeat your mantra of ‘‘promises made, promises kept.’’ And you won’t 

be able to say you warned them—unless you stop misleading seniors about your bill 

right now. 

That’s why I strongly recommend that you allow the House to fully debate and 

fairly vote on every plan and substantive amendment submitted to the Rules Committee. And I strongly recommend that you give Members and the press adequate 

time to analyze the full text of your bill—once you finally make it available. 

3

That way, at least you can say that you didn’t completely hide the details of your 

plan from the public. And then maybe, just maybe, you won’t have a full-fledged 

senior-citizen revolt on your hands.

The CHAIRMAN. Let me just observe that it appears to me that 

every seat assigned for the press corps is filled, and we have a complement of Members. There are three empty Member seats. All the 

other Member chairs are filled, and we have a table with two very 

able representatives from both the Ways and Means Committee 

and the Energy and Commerce Committee. 

So let me begin by welcoming my friend from Connecticut Ms. 

Johnson, and please proceed, and whatever prepared remarks that 

you have will appear in the record. 

Mr. FROST. We have some other Members who would like to 

make opening remarks. 

Ms. SLAUGHTER. I would like to make an opening statement. 

The CHAIRMAN. Mr. Frost didn’t indicate anyone else did. 

Ms. SLAUGHTER. I would like to, if I may, because I am very 

much concerned. Mr. Frost had already pointed out this defies common sense that we would rush consideration of vitally important 

legislation affecting almost 40 million people. The final bill was 

filed an hour ago, and we hardly had to time to look to see what 

was in it, and certainly superficial at best, and heaven only knows 

what is buried in the fine print. 

Now, we are not naming a post office here. This is considered the 

largest change to Medicare since its creation. Every senior citizen 

in our Nation will be impacted by this proposal, and I think if they 

had any inkling how this Congress and committee worked, they 

would be outraged. 

The American people tell us time and time again they are profoundly disturbed with the rising costs of prescription drugs. I 

know it does nothing to address the skyrocketing costs of prescription drugs. It doesn’t make it more affordable. And I am very curious to know if it still contains a portion of this bill that says that 

HHS is prohibited by this law from trying to negotiate for cheaper 

drugs. 

We believe the fact that the cost for most seniors is likely to rise. 

We don’t believe that seniors want to privatize, and they saw what 

happened with Medicare+Choice. They are suspicious that drug 

programs modeled after that failed Medicare+Choice program will 

not address their immediate needs. You need to remember, too, 

that the Senate has worked on this bill for weeks, days of deliberation on the floor. We will have less than 3 hours. 

Because private industry 40 years ago didn’t want to provide 

health insurance to older people, Medicare was born. We have no 

indication that anything has changed since then, and the private 

industry does not want to provide a prescription drug benefit for 

seniors. It is not a money-maker now, and it was not a moneymaker then. In the 1960s, the private sector had no reason to create insurance plans. 

This legislation deserves a full and complete airing, and I am 

afraid we are not going to get it this evening. And I needed to express my concern that something of this magnitude would come to 

us an hour ahead of time and be at this hour in the evening when 

almost everybody is asleep. But I am pleased to see some witnesses 

4

here, but nonetheless I think we are shortchanging the American 

people. 

The CHAIRMAN. Thank you very much, Ms. Slaughter. 

Mr. McGovern.

OPENING STATEMENT OF HON. JAMES MCGOVERN A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS 

Mr. MCGOVERN. Just for the record, you mentioned there were 

some Members here, but we have a long list of Members, and it appears that many of them are not here because of this late hour. So 

because we are meeting at this late hour, I think a lot of Members 

of both parties are not going to be able to participate in this hearing. 

And let me just say very briefly that I think this is a new low 

even for this committee, and the leadership on your side of the 

aisle, I think, has outdone itself, and that is hard to do, given what 

we have seen transpire in this House during these last several 

months. 

As my colleague has said, this House is about to consider an ex- traordinarily complex and controversial $400 billion bill that will 

affect the lives of 40 million Americans. I mean, every one of us 

here, no matter what our party affiliation, when we go home, we 

hear from our senior citizens all the time about the importance of 

trying to get a prescription drug benefit passed into law, something 

that means something. Now, the other body has spent 2 weeks of 

talking about this issue, debating and discussing and amending 

their prescription drug bill. They seem to get it that this is a big 

deal. Over 70 amendments have been offered on the Senate floor 

so far, some 40 hours of debate. They expect another 16 hours of 

debate before they conclude the deliberations. So how much time 

are we going to get to consider this important bill that all of us say 

is so important to our constituents? Not 2 weeks, not 40 hours, not 

16 hours. We only get a few hours tomorrow on the House floor to 

do this under what most likely will be a very restrictive rule. 

When I asked the Chairman of the Rules Committee last night 

when as a Member of the House I could examine this unusually 

important bill which is about 692 pages, we are now told, I was 

told if I woke up early this morning, that I could just go online, 

and I could read this bill line for line. Well, I got up early this 

morning, and it wasn’t there online; wasn’t there this afternoon. In 

fact, at midnight it wasn’t even online. So members of our staff 

were busily trying to go through a hard copy, trying to figure out 

what is in this bill and what is not in this bill, and quite frankly, 

we don’t know what is in this bill. We don’t know if there are any 

special fixes in this bill. We don’t know what has changed. We 

don’t know fully what the differences between the Ways and Means 

bill and the Energy and Commerce bill are. 

After 38 years Medicare has served this country pretty well. 

Most senior citizens think it is a pretty good program. After 38 

years, we haven’t messed around with the program, and here we 

are in the middle of the night in the Rules Committee about to report out a bill that, quite frankly, has significant implication for 

the future of Medicare because it is a bill that ends Medicare as 

5

we know it and turns it into a convoluted, complicated voucher program of HMOs and PPOs and shifting coverages. It is a bill that 

leaves a huge gap in coverage, penalizing people for getting sick. 

It is a bill that moves us toward privatizing Medicare and leaves 

our seniors at the mercy of the insurance industry. It is a bill that 

only a CEO would love. 

Now, given all of that, I guess it is understandable why the Republican leadership doesn’t want anyone to see it or read it. What 

they want is to strong-arm just enough of their Members so they 

can ram this bill through the House and before the American people know what hit them. 

And I want to say another thing in this bill that I thought we 

had dealt with, given the fact that the Energy and Commerce Committee overwhelmingly rejected this provision, but in this bill, from 

what I understand, we have—there is a sick tax on senior citizens 

on a fixed income. They have implemented a copay on home health 

care. So all of you in this—in this committee who get up and give 

your speeches about how you want no new taxes on the American 

people, we will give an opportunity to vote on an amendment that 

I will offer, to strip the sick tax copay, that new tax on senior citizens, from this bill. And I would hope that, given the fact that the 

Energy and Commerce Committee overwhelmingly unanimously rejected that, that we should at least be able to have an opportunity 

to offer this on the floor. 

I want to conclude, Mr. Chairman. I think every amendment and 

every substitute brought before this committee should be made in 

order. We should have a debate on it. We should vote up or down 

on it. I don’t care if it takes 2 weeks or 3 weeks or 4 weeks. The 

people who are most affected by this legislation, our senior citizens, 

should know what they are getting, and we need to get this right. 

Thank you.

The CHAIRMAN. Thank you very much, Mr. McGovern. 

Any other opening statements? 

Mr. Hastings. 

Mr. HASTINGS of Florida. Mr. Chairman, firstly, these are 

amendments—I don’t have a copy of the 692-page bill, and I am curious, do any of the other Members on either side of the aisle have 

a copy of the 692 pages? 

Mr. FROST. I had one copy, which I have now been returned and 

loaned it to a Member to look at. I do have one copy. 

Mr. HASTINGS of Florida. Today’s Washington Post—you don’t 

have a copy in front of you, Mr. Chairman? 

The CHAIRMAN. Yes, I do, right here. 

Mr. HASTINGS of Florida. Martin’s copy. 

Today’s Washington Post had a comment from a gentleman 

whose last name is Urban. He says the politicians seem to say it 

is better than nothing, and we should be grateful. To some retirees 

here who clip coupons, follow the news, Washington’s Medicare is 

just the latest example of the doings of out-of-touch elitists. 

Mr. Chairman, I wish that tonight’s hearing could be filled with 

commendation for the Chair and the Majority and all of us for reconciling two extremely contentious and technical bills into one. 

While you did accomplish such a task amongst adversity of two obviously—I am very delighted to have it for the good it will do me—

6

what is the gentleman that died that wrote Exodus? It will be me 

like trying to read that when I was in the fourth grade. I understand the Chairmen from the Ways and Means and Energy and 

Commerce Committees are demanding persons, and rightly they 

should be as Representatives here. 

I should note that I am appalled, as I am sure a lot of us are, 

that the Rules Committee is forcing its members to meet within 

minutes of completion of this bill. The rules that this committee 

adopted on January 7, 2003, state that the Chair shall provide 

each member of the committee with a copy of each bill or resolution 

and any committee reports at least 24 hours before the time of the 

meeting. Now, this rule was established to ensure that we have 

adequate time to review the scheduled legislation. 

Rules Committee makes allowances for emergency meetings, but 

not once—except in an e-mail in my office received just a few moments ago from a constituent named Carl Keelman from Pompano 

Beach, wondering why he called and he wrote this time of night. 

I don’t know him, but he wrote to me and said, Dear Representative Hastings: Please vote against the Republicans’ Medicare reform proposal when it comes up for a vote this week in the House. 

Letting private insurance companies run Medicare is a terrible 

idea. In fact, I would say in the history of bad ideas, this one has 

got to rank near the top. Medicare has done a great job for 37 

years. It has not dropped a single person from coverage. Private insurance companies are not able to guarantee coverage like Medicare can because they have to think about their profits first and 

the needs of seniors second. That is why Congress should not turn 

Medicare over to private insurance companies and HMOs. Seniors 

need coverage for their prescription drugs, but this bill would take 

us one step forward—not one step forward, but two steps backward. This is not a good deal for seniors. The drug coverage being 

offered is limited, and the bill would begin to unravel the Medicare 

program. Please vote against this legislation. 

I can tell Carl that I will live up to his request. When we established this rule, the Rules Committee made these emergency allowances, and I guess that is what we are having is an emergency 

hearing. I don’t know what the hell the emergency is. We all have 

plenty of time, and as has been mentioned, the Senate seems to 

have found a way to give their membership sufficient time in order 

to at least discuss this intelligently. Members of this body, Members right in here on both sides of this aisle have spent years campaigning and discussing and debating a prescription drug plan 

under Medicare, yet almost immediately after the committees of jurisdiction completed their work in the 108th Congress, years of 

promises now run the risk of being slashed by the refusal of the 

Majority to allow members of the Rules Committee, the last committee standing before floor consideration, adequate time to review 

the bill and properly consider the many amendments which Members have submitted. 

Furthermore, many Members have sought to offer technical 

amendments that address specific amendments in this prescription 

drug bill. However, because the Majority refused to release the text 

of the bill until just an hour ago, Members have not had a fair opportunity to draft substantive amendments to the bill that will be 

7

on the floor. In drafting the two amendments that I may offer during this hearing, House legislative counsel could not even get me 

tentative text because, to quote one attorney at Counsel Office at 

1:15 this afternoon, there is as of yet no firm target to amend. 

Tell me, Mr. Chairman, are we being honest to America’s seniors 

by ram-rodding this bill through the Rules Committee this morning? Are we being honest to ourselves this morning considering a 

bill that none of us have read and few know its contents? And I 

doubt seriously if the people that patched and pasted it together, 

any of them on Commerce or any of the other committees, have a 

real firm grip on what is in this mess. 

I think the answers to these questions are self-evident. The little 

we do know about this bill is startling. For starters, this bill establishes a new voluntary prescription drug benefit, and we learned 

this in bits and pieces from each other, that will be provided 

through a private insurer. Yet Medicare was created in 1965 with 

not one Republican vote primarily because private insurers were 

not interested in offering health care policies to older, sicker people. Second, the $400 billion allocation for Medicare prescription 

drugs is not enough money to provide affordable benefits for our 

deserving senior citizens, period. And every man and woman in 

here that thinks $400 billion is going to get it, they haven’t been 

living near my house where I take care of my mama, and it is $360 

a week for prescription—$360 a month for prescription drugs, $850 

a week for in-home care. And I am proud to be able do that, as I 

am sure many of you are, but there are people that live not too far 

from me and people that I represent that there is no way in the 

world that they could afford that kind of care. 

Third, this bill allows the IRS to share income tax information 

with the HHS, which can then share this information with the private insurer. This bill not only fails to provide adequate Medicare 

benefits to our Nation’s senior citizens, it fails to provide adequate 

privacy protections as well. 

Mr. Chairman, based on the cursory information that has been 

battered about here on Capitol Hill, I have been able to go on this 

bill just with the time allotted those few things. I am certain there 

are countless issues in this bill that are worthy of careful attention 

and debate. It is a travesty that we are not permitted adequate 

time to give this important legislation the time and attention it deserves. We are doing ourselves and the millions of people that we 

all represent a great disservice. In short, this bill will help an already robust set of insurance companies at the expense of a whole 

whale of a lot of frail senior citizens, some of whom are mothers 

and our daddies and our grandpapas and our grandmamas. It is 

scandalous that we would put ourselves in this kind of position, 

and it doesn’t mean so much that the Majority may win something. 

I think one damn day you are going to lose everything. 

The CHAIRMAN. Thank you very much, Mr. Hastings. 

Let me just say that this meeting does comply with the rules 

under the emergency meeting status. 

Mr. HASTINGS of Florida. What emergency? 

The CHAIRMAN. And based on the four statements we have heard 

from our four colleagues, there is a pressing need out there to deal 

8

with the issue of prescription drugs, and that is why in the last 

Congress we passed this measure—excuse me—that is why in the 

last Congress we dealt with this issue, and that is the reason we 

are about to hear from our colleagues from the Ways and Means. 

Mr. MCGOVERN. Would the Chairman yield? 

The CHAIRMAN. Mr. Linder. 

Mr. LINDER. The statement that not a single Republican voted 

for Medicare is simply untrue, and I have a significant number of 

constituents who are grateful that at least some Congress is willing 

to offer some prescription drug benefit under Medicare for the first 

time in 38 years. 

Thank you, Mr. Chairman. 

Mr. MCGOVERN. Would the Chairman yield? 

The CHAIRMAN. Please. 

Mr. MCGOVERN. I would ask the Chairman to answer the question that Mr. Hastings put forward, and that is what is the emergency? What is the emergency that this needs to be done at this 

hour of the night, rushing it on the floor, versus doing it right and 

giving us a chance to go back to our districts and talk to our senior 

citizens and doctors and hospitals? I am trying to understand what 

the emergency is. How do you define an emergency; not the political spin, but what is the emergency that justifies us bringing this 

up at this hour under these kinds of circumstances? 

The CHAIRMAN. We all know that over the past several months 

that there has been a real attempt to try to put together legislation 

in a bipartisan way to deal with this pressing need that all four 

of our colleagues on the Minority here have outlined, and which we 

on our side agree exists. And we have come to the point where we 

have, we believe, fashioned a piece of legislation which will address 

that need. And it is for that reason that I as Chairman of this committee made the determination that we were going to call an emergency meeting to deal with this. That is my prerogative as Chairman of this committee, and I have done so. 

And I would like to recognize the gentlewoman from Connecticut 

Ms. Johnson, who is here representing the Committee on Ways and 

Means. And we are happy to have you. Without objection, any prepared remarks you have will appear in the record, and we welcome 

your presentation.

STATEMENT OF HON. NANCY JOHNSON, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF CONNECTICUT 

Mrs. JOHNSON. I thank you, Mr. Chairman, and as Chairman of 

the Health Subcommittee of the Ways and Means Committee, I am 

honored to bring this bill before the Rules Committee and respectfully request that the Committee on Rules provide an appropriate 

rule for floor consideration of House H.R. 1, which would waive all 

points of order against the bill and against its consideration. I 

would further request the bill be considered as read, and that you 

provide an appropriate amount of time for general debate equally 

divided, and one motion to recommit with or without instructions. 

Mr. Chairman, I would like to provide a brief overview of the bill 

and a brief set of changes that were made in the Ways and Means 

jurisdiction and yield to my colleague from Energy and Commerce 

9

for his comments and for his review of the changes that were made 

in the bill. 

First of all, to clarify, the House has passed legislation in this 

area two preceding times. We bring you a refinement of that bill. 

This is the most mature, well-thought-out legislation in this area 

that has ever come before the House. It is the first major expansion 

of Medicare, and it is not just about prescription drugs. That is 

what makes it different from any other initiative on the table in 

the Senate or by the Democratic Party. And I want you to understand the modernization in this, because this bill doesn’t just bring 

prescription drugs to seniors, as important as that is, this bill modernizes Medicare and prepares it to deliver to our seniors the next 

generation of quality health care. 

Science has focused on diagnosis. It has focused on treatment. 

The most cutting edge development in health care is focusing on 

the progress of chronic illnesses, such as the progression through 

which someone goes from being a diabetic to dependency on dialysis. And it is the preventive initiative in this bill to prevent the 

progression of chronic illnesses that is unique and dramatic and is 

going to radically alter the lives of your constituents. 

One-third of Medicare recipients have five or more chronic illnesses, and Medicare is not structured to address those chronic illnesses or to support or help those patients. This bill provides feefor-service Medicare the power to do that and will require that the 

plans do that. It will put in place both the technology and the medical science to help our seniors with chronic illness enjoy a much 

higher quality of life and at the same time stay out of hospitals, 

stay out of ERs, and stay out of doctors’ offices, all of which are 

high-cost settings for Medicare. So it is the honest and right way 

to improve the quality of care Medicare is prepared to deliver and 

at the same time control its costs over the long term as we enter 

the era with the baby-boom generation. 

The prescription drug benefit is simpler, it is more generous, and 

it is fairer. It is simpler because it is 80 percent of all coverage of 

up to $2,000 of costs. Considering that the average use of drugs is 

$1,200 per beneficiary, most seniors will be fully covered at 80/20 

under this bill. 

Secondly, it income relates the catastrophic level. It is not fair 

in America that seniors with $200,000 of income who live in gated 

communities have exactly the same catastrophic threshold as someone living on $20,000 income. And that is not fair. And I am proud 

that this bill is fairer, its benefit is simpler, and its benefit is generous. It is well targeted to the low income, and for the first time 

in any bill, to my knowledge, we count the State subsidies toward 

the catastrophic limit so it not only targets the very poor, but also 

targets the really low-income seniors who would have a hard time 

meeting the catastrophic threshold. So it is better targeted both by 

virtue of its support for those 150 and 200 percent of poverty income and by virtue of the income-related catastrophic benefit; more 

generous, more fairly targeted, a strong benefit plan, the biggest 

expansion of Medicare in its history. 

Lastly, it mandates electronic prescribing in 2 years. This is 

going to have a dramatic impact on the infrastructure of medicine, 

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10

cine report demonstrated that prescribing was the source of the 

majority of errors. It will also protect seniors from over-prescribing. 

It will protect seniors from interactions. And it will also give seniors the power to know when there is a cheaper alternative available that explicitly requires that pharmacists oversee the medication therapies that our seniors are on. If they are on multiple medications, they have to be on a medication therapy program, and it 

requires that the pharmacist get paid for that. It is a tremendous 

advance in not only giving seniors medication, but providing the 

oversight to ensure that they are a good thing in their lives and 

not a cause of illness, death and destruction. 

By mandating chronic care management and pharmacy therapy, 

the bill really goes a long way toward changing the dynamic in 

Medicare from an incident-based illness treatment program to a 

health-supporting preventive program. So I don’t want you to miss 

what a dramatic expansion this is regardless of the circumstances 

under which we are considering the bill. 

In addition, it adopts the regulatory reform proposals that went 

through the House—the Senate never considered them—a radical 

reform, completely bipartisan, of the regulatory burden in Medicare 

that is draining hours away from patient care. 

It has a reimbursement package that includes the very best rural 

health reimbursement package ever to pass this House or ever to 

come before this House, as well as two dramatic improvements in 

hospital reimbursement. We changed the system to bring technology into the system more rapidly and pay for it, and we do a 

much better job of paying for outpatient drugs using hospital settings. 

We also attacked the issue of fraud and abuse. We have been 

paying for a lot of care that should have been paid for by auto insurance companies, and we save $9 billion through that reform. 

There are other aspects of this program that are interesting and 

useful. The ability of plans to compete in a way that will save seniors dollars will in the long run be a very great force for providing 

affordable care and efficient care to our seniors across the board. 

Let me highlight a few of the things that have changed in the 

bill since it came out of the Ways and Means Committee. We added 

a drug card in our jurisdiction as a result of the thoughtful consideration of many of our colleagues. So not only upon passage will 

the President have the authority to offer a drug card, but people 

who have less than 135 percent of income will get $800 to spend 

with that card. People between 135 and 150 percent of income will 

get $500 toward drug costs. And people above 150 percent of poverty will get $100. So you get a smart card that moves right 

through from the discount card of your choice and behind it some 

real money, particularly if you are low income, to help with the cost 

of prescriptions in the 2 years it will take to set up the program. 

There are other changes, but none of them major. I would be 

glad to go through them in more detail, but I don’t want to take 

too much time. 

The CHAIRMAN. Thank you, Mrs. Johnson, and we appreciate 

your testimony. Thank you for those very thoughtful remarks 

which address many of the issues that have come forward in the 

last few minutes. 

11

Mr. Walden, we are happy to have you here representing the Energy and Commerce Committee. Without objection, your prepared 

remarks will appear in the record in their entirety.

STATEMENT OF HON. GREG WALDEN, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF OREGON 

Mr. WALDEN. Thank you very much, Mr. Chairman, Ranking 

Member Frost, members of the Rules Committee. 

Let me point out that the Energy and Commerce Committee, we 

spent nearly 23 hours working on this legislation in markup. We 

considered 63 amendments and held 28 recorded votes. So this in 

contrast to last year I believe we went 22 hours and had nearly as 

many amendments. So as my colleagues from the Ways and Means 

Committee said, this a major bill that has been well vented not 

only this year, but in the prior 2 years by the Energy and Commerce Committee and the Ways and Means Committee. 

Our committee worked very closely with the Ways and Means 

Committee to make major improvements that passed the House 

last year. One of the most significant changes we made was to improve the drug benefit. We substantially increased the amount of 

coverage beneficiaries receive for their 2,000 in drug spending. 

They will now only pay 20 percent of these drug costs after paying 

a $250 deductible. This change and others make our proposal an 

even more attractive benefit for seniors who are Medicare beneficiaries. 

H.R. 1 also provides beneficiaries more options for receiving their 

health care. Building on the recommendations first proposed by the 

President, the bill gives seniors the full array of health plan choices 

available to the under-65 population including PPOs, HMOs and 

private fee-for-service plans, along with the option with remaining 

in the traditional Medicare program. So they have choices. 

This bill creates enhanced fee-for-service regions encompassing 

both urban and rural areas for the delivery of new private plan options, thus bringing improved choices to seniors throughout the 

country; also takes important steps towards reforming the Medicare program, as my colleague said. The base bill also retains the 

best features that were combined in the version passed last year 

by the House because our bill allows beneficiaries to harness competitive free market forces to substantially lower Medicare beneficiaries’ drug costs. 

The bill also provides substantial assistance to low-income beneficiaries, providing full subsidies for beneficiaries with incomes up 

to 135 percent of poverty level, and covers a portion of the premiums on a sliding scale to beneficiaries with incomes of 150 percent of poverty. 

Further H.R. 1 contains amendments to the Hatch-Waxman generic drug law that will benefit all Americans, not just our seniors, 

by expanding—by expediting, that is, the arrival of generics in the 

marketplace. The language in the bill, which is similar to that proposal passed by the Senate 94 to 1, would provide brand drug companies with only one 30-month stay on the approval of a generic 

competitor. And, of course, generics would forego their exclusivity 

if they do not bring a product to market within a specified time peVerDate jul 14 2003 16:56 Oct 30, 2003 Jkt 089585 PO 00000 Frm 00015 Fmt 6633 Sfmt 6602 E:\HR\OC\89585B.XXX 89585B
12

riod. These reforms will save billions of dollars to American consumers. 

Mr. Chairman, if I could touch just on a few items here as they 

differ from the committee mark. As I mentioned, Hatch-Waxman 

changes, including new changes as similar to that proposed by the 

Senate, which I just referenced. There is a re-importation provision 

that has been added; contains provisions that provide the Secretary 

with the authority to prevent reimportation and the personal importation of FDA-approved drugs from Canada. Unlike current law, 

these provisions are more likely to go into effect because they provide FDA with the authority to regulate the flow of reimported 

drugs to designated ports of entry for the FDA to concentrate its 

inspectors. 

Canada-only reimportation: This provision requires HHS to issue 

regulations allowing pharmacists and wholesalers to reimport 

drugs that comply with the FDA standards. The provision provides 

that biologics, controlled substances and certain other drugs are exempted. Drugs must be contained in tamper-resistant and counterfeit-proof packaging. Drugs must contain a statement to inform the 

consumer that the drug has left the country. Drugs may only be 

shipped back to the country by the first Canadian recipient. HHS 

is given the authority to limit reimportation to certain ports of 

entry; import requirements to keep detailed records and to conduct 

drug testing; a manufacturer must provide an importer with an approved labeling of the drug. In the Canada-only personal importation provision, it allows the Secretary to waive the prohibition on 

personal importation of drugs from Canada when the drugs are for 

personal use and when drugs are presented at the border. This activity is presently illegal under the Food and Drug Act, but could 

become legal under this act. The provision provides that drugs 

must be in the possession of the individual when entering the 

United States. They must be for personal use for that individual 

with a valid prescription, and drugs must be FDA-approved and in 

final dosage form. 

In reference to the discount drug card, I would also, adding to 

what my colleague from the Ways and Committee said, point out 

that in addition to the money that would be pointed into these accounts, individuals, employers and charitable organizations will be 

able to contribute up to $5,000 annually to this card. This program 

terminates when the comprehensive drug benefit comes online in 

2006. 

There are also changes to AWP, Medicaid, and of course we are 

proud of the improvements in the rural health policies. This is very 

good for rural communities when it comes to rural health. 

And with that, Mr. Chairman——

The CHAIRMAN. Thank you very much, Mr. Walden. 

And let me say to both of you that the proposal that you have 

just outlined clearly does protect and strengthen and improve on 

the Medicare program, which we all know has faced many difficulties over the past several years. And obviously, if action is not 

taken, we know that the future of Medicare is seriously in doubt. 

And the proposals that you have just brought before us, I believe, 

will go a long way towards mitigating the threat of that. 

13

I thank you both very much for going through the litany of proposals that were offered here today, that were offered in your committee. 

Mr. Linder. 

Mr. LINDER. I want to thank you both. You are bringing before 

us the first opportunity in its lifetime for Medicare to offer a drug 

benefit for seniors. 

I just have one question: Do you consider having seniors paying 

a modest copay to be a sin tax? 

Mr. MCGOVERN. On health care? 

Mrs. JOHNSON. No, I don’t. I feel it is important for seniors to 

make some copayment, because if they don’t, they lose track of the 

cost, and they lose track of their responsibility to think about 

whether a lower-cost alternative is available. It is extremely important to have copayments, and in this bill we do not allow the sharing of the total amount of the copayment. 

Mr. LINDER. Isn’t it true that one thing we can do to get some 

control over health care costs in this country is to have some kind 

of consumer involvement or patient participation? And isn’t that 

what copay is designed to do? 

Mrs. JOHNSON. There are two things that are going to get people 

very powerfully involved. Copayments are certainly one of them, 

but one of the important aspects of disease management is that the 

patient is very involved, and part of what you do is to educate the 

patient about how to care for themselves, educate their family and 

support group, keep much closer contact with them, provide technology in the home that supports. So the patient involvement is 

what makes that such a powerful approach to preventing illness 

from progressing. 

So this is going to dramatically alter the way we do health in 

America because our senior population is going to be able to participate in the kinds of delivery systems that today, themselves, are 

key to their own health. 

Mr. LINDER. In 1964, when President Johnson was outlining his 

proposed Great Society for Medicare and Medicaid, he promised 

this country that by 1990, Medicare would only cost $9 billion, and 

Medicaid would only cost $1 billion, using easily quantifiable user 

statistics. And we discovered that by 1990, Medicare cost about 108 

billion, and Medicaid cost 73 billion, because people don’t spend 

other people’s money as wisely as they spend their own.

Isn’t the whole idea of copay to get the patient involved in those 

decisions and understand they are spending their own money, too? 

Mrs. JOHNSON. Absolutely. But there is another factor. He did 

not anticipate. He did not anticipate the rapid progress of medical 

science. It is astounding what we have learned in the last 30 years, 

and that expansion, explosion really, of diagnostic techniques, of 

treatment techniques, of surgical options that are pushing costs up, 

and now prescription drugs, that makes it even more important 

that the patient be involved, because we all know there is unnecessary surgery being done because the patient isn’t part of the decision-making process. We know that overprescription is one of the 

biggest dangers of the prescription drug plan for seniors, and unless they are more involved in their care, their use of pharmaceuticals, and they have the guidance—on the part of multiple 

14

pharmaceuticals—of a pharmacist, they will be victims of overprescribing, overusage, and all the problems that result therefrom. 

Mr. WALDEN. Mr. Chairman, if I might as well. This whole issue 

of copay is an interesting one because when Part B Medicare was 

begun, it was a $100 copay. That represented 44 percent of the 

cost. Today it represents less than 3 percent of the cost. So if you 

look at this as how the program was started versus how it is today, 

the percent of copay is negligible in terms of Medicare Part B compared to how the authors, founders and supporters of Medicare envisioned copay to work when it was created in the 1960s. 

Mrs. JOHNSON. We do require everybody to have a copay, even people on Medicaid, $2 copay and $5 for prescription. So we want 

everyone to participate in this program both financially and personally. 

Mr. LINDER. Worth noting that when the VA finally decided to 

have copay for its pharmaceutical program, the numbers of prescriptions declined dramatically. 

Mrs. JOHNSON. I would like to point out to the gentleman Mr. 

Hastings on this copay for home health——

Mr. MCGOVERN. I was the one who raised it. 

Mrs. JOHNSON. I have been a long and close strong advocate of 

the home health industry, and I fought copays for many years because it was per visit. Now we have changed the way we reimburse 

for home health visits. We are reimbursing per episode. A single 

copay for episode does give seniors the opportunity to think whether this is appropriate or not. And I have had seniors walk up to 

me and family members, walk up to me and say, we could do this 

ourselves, and we decided not to do it because of the copay. This 

was actually in regard to home-delivered meals, but it was the 

same thing. The home-delivered meal copay was at $5 for the week, 

and you were getting both lunch and dinner. And this retired 

friend of mine on the local council said, for that I will do it myself. 

Well, we need to at least promote that thought. So for a single 

copayment of 1.5 percent, we will be able to give people the opportunity to think do they need home health care. You will be surprised how much of Medicare is on automatic pilot. You get out of 

the hospital, they give you all this equipment whether you need it 

or not, and then line you up for home health care whether your 

children are there or not. So copays represent an opportunity to 

think about whether I am going to pay for this and taxpayers are 

going to pay for this. 

Mr. MCGOVERN. But—— 

The CHAIRMAN. Mr. McGovern, Mr. Frost has just asked that I 

go in regular order, and so I plan to do that. 

Mr. Linder. 

Mr. LINDER. Thank you for clarifying the copay idea and its importance in terms of the responsibility part. And I would like—

when you talk to, for instance, pharmacists at a hospital, and you 

talk about when they go in to see a patient, they will say the first 

thing is they take them all off their medicine. They are overmedicated, and they are overmedicated because they are not responsible 

for paying for things. 

I congratulate you on what you are doing and congratulate you 

on the responsibility portion. 

15

Mrs. JOHNSON. They are overmedicated because they are not 

paying, but also because there is no communication amongst their 

caregivers. And by having electronic prescribing and a single plan, 

some plans will know exactly all the pharmaceuticals you are taking. This is a vast improvement. You can’t provide prescription 

drugs without providing to that senior in a sense a single point of 

the payment so we know exactly what complex of drugs they are 

getting. 

The CHAIRMAN. Mr. Frost. 

Mr. FROST. Mr. Chairman, I am going to be fairly brief because 

we have a lot of witnesses here who waited a very long time tonight to have the opportunity to testify, and I do know other members of the committee have questions. 

I do have a question, and either witness can respond. The question is we repeatedly hear from members of your party that the 

drug plan will have a monthly premium of $35. Can you point me 

to the section in your bill where it guarantees that all seniors’ 

monthly premiums will be $35? Is there anything in statute, statutory language, that sets out the premium at $35? 

Mrs. JOHNSON. There is nothing in statutory language that sets 

out the Part B premium, and there is nothing in the statutory language that sets out the drug premium. However, there is in statutory language not only the actuarial equivalence for the whole 

package, but section by section. So if anybody wants to vary from 

80/20 in the distribution of cost, they can do that, but it has to be 

actuarially equivalent. 

So it is hard to see how much variation there will be. Section by 

section there has to be equivalency. So the likelihood when the actuaries look at this that there will be a consistent premium is very 

great. But you see if we set it in statute, then we don’t allow those 

plans that are more efficient or if they can negotiate a better deal 

with the manufacturer to charge you less, and we want seniors to 

have access to a plan that charges less. 

Mr. FROST. I understand this. My understanding is when proponents of the bill are attempting to sell this package to the public 

and Congress, they say there will be a $35 premium. Is it possible 

in the way that the bill is fashioned that that premium can be 

higher than $35 a month, not necessarily lower? 

Mrs. JOHNSON. It is possible that it could be slightly higher or 

lower. It is impossible that it would be significantly higher or, 

frankly, significantly lower. 

Mr. FROST. Well, that is a debatable matter, and that issue will 

be discussed more fully on the floor, and you responded to my question that there is nothing in the statutory language that sets out 

a $35-a-month fee. 

Mrs. JOHNSON. Precisely. 

The CHAIRMAN. Ms. Pryce. 

Ms. PRYCE. Thank you, Mr. Chairman. 

I have been very involved in this over the last couple of weeks, 

and I just want to commend our witnesses today and their committees for working so closely together. I think this is something that 

is historic as long as I have been around here, and the cooperation 

and—to bring this together, this complex matter, the way they 

have done it, I want to commend them. And I will not take up the 

16

committee’s time with any questions. I want to thank them very 

much and tell them we all appreciate it. 

The CHAIRMAN. Thank you very much, and thank you, Ms. Pryce, 

in your leadership role in making this happen. 

Ms. Slaughter. 

Ms. SLAUGHTER. Mr. Chairman, I only have three questions that 

I would like to ask; first, that I am told that on the reimportation 

of drugs section there is an amendment by Senator Cochran that 

the Secretary must certify the safety of the importation of drugs in 

order to have it go into effect. And Secretary Thompson has said 

he will not do that, and in which case this is not really going to 

happen. Is that true? 

Mr. WALDEN. If I might, Mr. Chairman. In the past, neither Secretary Shalala nor Secretary Thompson can certify the importation 

to be done safely. It will be much easier for a Secretary to demonstrate safety by limiting the reimportation in Canada only. And 

as I outlined in the bill, there are some safeguards built in. 

Ms. SLAUGHTER. And the Secretary has agreed to do that? 

Mr. WALDEN. I can’t speak for the Secretary. 

Ms. SLAUGHTER. My concern is that was one of the sweeteners 

in the bill. There is no question about it, because most of us think 

what we need to do is really get down the price of drugs. And I 

understand that the drug manufacturers object most strenuously to 

even bringing it in from Canada. But it was troubling to me if that 

provision is in the bill—stated in the bill, and the Secretary won’t 

do it, then we are wasting our time talking about that; are we not? 

Mr. WALDEN. If I might, Mr. Chairman. 

As you know, I am Vice Chairman of the Oversight and Investigations Subcommittee, Energy and Commerce Committee. We 

had a hearing just this week—it seems last week—this week on 

this issue of reimportation with experts from the FDA and the Customs Department, complete with slides, pictures and evidence of 

very extensive pharmaceutical drugs. And I must tell you that one 

of the packages of evidence had a series of five boxes of drugs that 

I am led to believe are used for HIV. Price tag is $4,000 for those 

five boxes. They were sealed with hologram seals. They were identical to one box in another bag. I presumed the five with the 

hologram seals and the printing and all were the correct imports. 

They were knock-offs. And they had pile after box after pile, and 

I am telling you could not tell the difference. And I think there is 

a legitimate issue. 

And I supported the issue of reimportation. I voted in favor of it, 

but I also believe that we must make sure our seniors and anybody 

else that goes to a Web site, who thinks that they are getting a 

drug to combat an illness that could threaten their life, knows with 

some level of certainty that those drugs actually have in them what 

they could get if they went to the corner drugstore. And that is why 

this has been framed in a way to try achieve that, so they are not 

getting rat poison when they expect something like Viagra. 

Mrs. JOHNSON. There is a difference in this bill. 

Ms. SLAUGHTER. However, the proviso, unless the Secretary certifies it. Therefore, that section of this bill cannot take effect; isn’t 

that correct? 

17

Mrs. JOHNSON. That is correct, but there are two different structural aspects to this bill that make it likely he will be able to do 

that. First of all, it requires tamper-proof packaging. And there are 

tremendous advances now, very tiny chips that get put in, so on 

and so forth. We think there are packaging alternatives that will 

allow inspectors at these gates to be able to quickly determine 

counterfeit from noncounterfeit. This is a new advance. We have 

encompassed that advance in this bill, and we think this is a workable compromise that the Secretary could put in place. 

Ms. SLAUGHTER. One other point I wanted to bring up, too, is the 

cost of Part B, the rise in premium. The bill in 2000 said that the 

premiums for Part B would rise 47 percent. There is no figure. 

Mrs. JOHNSON. In Part B. I don’t know where they got that 47 

percent. 

Ms. SLAUGHTER. 2000 bill, not this one. 

Mrs. JOHNSON. We do allow in this bill for the Part B premium of—excuse me, Part B deductible of $100 to increase with inflation. 

It is essential we get Medicare on a sounder track, and that is one 

of the small things we do. 

Ms. SLAUGHTER. I think we all—— 

Mr. WALDEN. If I might. Again, on that issue, I believe the $100 

fee was established in the 1960s as the copay or the deductible, 

and at that time represented 44 percent of the cost of what was 

being provided. Today that figure is less than 3 percent, so in 

terms of just keeping up with inflation, you have to have a much 

higher rate. 

Ms. SLAUGHTER. But it is not in the bill. There is no stated 

amount. 

Mr. WALDEN. No. It is a rate of inflation. 

Ms. SLAUGHTER. One of the questions is the issue of negotiation 

between the private Medicare plans and the drug companies. Can 

you explain why that is—why they don’t want to negotiate lower 

prices? 

Mrs. JOHNSON. It prohibits what? 

Ms. SLAUGHTER. Prohibits the MBA from negotiating with—

interfering into drug negotiations, price negotiations. 

Mrs. JOHNSON. We want the plans to negotiate with the drug 

companies. The plan that they come up with has to be reviewed 

and certified by the board that runs the program, but they are to 

do the negotiation. We are not to do the negotiation. 

Ms. SLAUGHTER. Given the fact that the Veterans’ Administration has negotiated and has been successful, it seems odd that the 

administrator of the program is being prohibited by law from interfering. 

Mrs. JOHNSON. But you are not going to get diverse and competitive programs, some of which will then drive the price down. The 

VA has a very good price on a narrow spectrum of drugs, but it 

gets the good price because it is a narrow spectrum. If you are a 

veteran that needs a drug that is not given by the VA, you don’t 

get any break at all. 

We want seniors to get a break on every single drug. So that is 

an interesting model, but there are two ways in which we go beyond it. First of all, our program will offer a much greater variety 

of drugs. And secondly, by piercing what is called the best price 

18

law that requires that the best private sector price be passed on 

to Medicaid, we save $18 billion. We are going to depress drug 

prices through the bringing Medicare to the market in a way that 

is absolutely unprecedented. We will go below the current best 

price structures, which build an artificially high floor into current 

pricing processes. 

Mr. WALDEN. We are going to harness 40 million Medicare beneficiaries in this competitive effort. It is what is happening in the 

private sector in private insurance today that drives down the cost 

of what they are paying. And we believe you will be able to achieve 

anywhere from 15 to 30 percent reduction, depending upon the 

drugs, in just the base cost to the drugs as a result. So even though 

you are paying the part that is out of your pocket, you are going 

to pay less. Then you couple that with the insurance 80/20. We 

think seniors are going to see a significant reduction than certainly 

what they are paying today if they have no coverage. 

Ms. SLAUGHTER. These are the seniors that opt out of Medicare? 

Mrs. JOHNSON. No. No. In fact, the requirement is that in every 

area there be a plan that is drug only, as well as a plan that can 

be a plan. 

Ms. SLAUGHTER. Negotiated between private plans, not Medicare? 

Mrs. JOHNSON. No. Medicare doesn’t do the negotiating. But 

Medicare has to certify the plan once it is negotiated, that it meets 

our actuarial specifications and the standards of the plan. But we 

do not do the negotiation on purpose, because we want multiple 

plans. That is the whole point. We want seniors to have choices. 

That way they get lower premiums, lower cost, lower prices. 

Ms. SLAUGHTER. Thank you. 

The CHAIRMAN. Thank you very much, Mrs. Slaughter. Let me 

just say that we all share your concern to ensure that no one gets 

rat poison when they are anticipating Viagra. 

Mr. WALDEN. It is a possibility, Mr. Chairman. 

The CHAIRMAN. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. I thank you, Mr. Chairman. I thank these two 

witnesses for bringing this work product forward. It is tremendous 

work that these committees have done, and I am very proud that 

it is this Congress. 

This is something that can’t be stressed enough; right now there 

is no benefit, and the fact that we in this Congress—this Congress 

is going to provide an important benefit to help seniors pay for 

their medicines, I think is extraordinary, something that we all 

should be proud of. 

I am not going to take the committee’s time further, I but I wanted to thank you for their hard work and the reputation of the committee for their very appropriate, illustrative descriptions. 

The CHAIRMAN. Thank you. 

Mr. McGovern. 

Mr. MCGOVERN. Thank you, Mr. Chairman. 

Mr. Chairman, first I would like to ask unanimous consent to insert into the record the testimony of Congressman Mike Thompson, 

the testimony of Congressman Tom Allen of Maine, the testimony 

of Congressman Jim Langevin of Rhode Island, the statement of 

Congressman Paul Kanjorski, and the testimony of Congressman 

19

John Tierney, all who have amendments, but I guess couldn’t make 

it here at 10 of 2:00 in the morning. 

The CHAIRMAN. Without objection, the statements of our colleagues will appear in the record at this point. 

[The prepared statements of Mr. Thompson, Mr. Allen, Mr. 

Langevin, Mr. Kanjorski, and Mr. Tierney follow:]

PREPARED STATEMENT OF HON. MIKE THOMPSON, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF CALIFORNIA

Last night, the Blue Dog Coalition formally endorsed legislation based upon the 

bipartisan Senate Medicare bill (S. 1). We are bringing this proposal before Rules 

tonight as an alternative to the House Republican plan. 

As you know, the Blue Dogs are a group of fiscally conservative Democrats, who 

are committed—as a coalition—to the passage of a prescription drug benefit that fits 

within our $400 billion budget window. 

However, we are not willing to sacrifice the principles of the Medicare program 

to reach that goal. 

The Senate has come together to develop a strong bipartisan benefit. It is not perfect. But, in recent years, the perfect has become the enemy of the good and, unfortunately, the perfect is out of our price range. 

The Senate offers America’s seniors a good benefit. It carries a monthly premium 

of $35. A deductible of $275. A 50% cost-share through the first $4500 of drug 

spending. And, it offers a catastrophic benefit that kicks in after beneficiaries have 

spent $3700 out of pocket. 

Further, it corrects a variety of inadequacies in our Medicare reimbursement system for rural providers. And, it does all of this without putting Medicare on the path 

to privatization. 

But, with a score of $389 billion, there was some room for improvements. And, 

that is just what the Blue Dog Coalition has done. 

We have strengthened the rural provider package by accelerating the start dates 

to 2004. And, we have improved the adjustments made to the wage index labor 

share—dropping the labor share to 62%. 

We have built upon the Senate’s critically important fall-back provisions. The fallback means that seniors—such as those living in rural areas without two or more 

plans providing service—will always have access to a drug benefit. We have provided an additional layer of stability for those seniors, by requiring the fall-back 

plans to contract for two years as opposed to one. We have included the Senate Generic drug amendment, which has been scored by CBO as a cost-saver because it 

streamlines and clarifies the process by which generic medications can be brought 

to market. This will increase the amount of affordable medications available to all 

of our seniors. We have incorporated disclosure requirements, to ensure that our 

plans are fully demonstrating how savings are passed on to our beneficiaries. We 

allow the Secretary to negotiate on behalf of all Medicare beneficiaries for the best 

prices possible. We permit the re-importation of medications from Canada, provided 

that the Secretary certifies that such action would not jeopardize the health and 

safety of the American public. We allow Medicare to operate as the primary payor 

for all dually eligible beneficiaries, lifting some of the financial burden off of the 

shoulders of our states. We allow a portion of employer contributions to be counted 

towards the beneficiary out of pocket limits, encouraging our employers to continue 

sponsoring retiree health plans. And we are able to make these improvements within the confines of the $400 billion budget allocation. 

Unfortunately, the Congressional Budget Office was not able to complete a score 

on our legislation prior to the convening of the Rules Committee. However, the majority of the changes we have made to the already-scored Senate bill were based 

upon Senate amendments that have either been introduced and passed or are pending introduction. As such, they have all been scored by CBO for their sponsoring 

offices. The availability of that information has allowed the Blue Dogs to say with 

certainty that this legislation fits within the $400 billion budget window. 

We know that the Committee would have preferred that CBO underscore our 

claims. We would have preferred that as well. So, to lie to rest any lingering worries 

the Committee may have about the final cost of our legislation, we have incorporated a budget safeguard within this Substitute. 

Specifically, the language requires the Secretary, in consultation with OMB, to determine the exact cost of this legislation prior to enactment. The Secretary is specifically directed to adjust the percentage of employer contributions that are applied 

20

towards the out of pocket limit accordingly—if necessary—to ensure that the legislation will not exceed the specified allocation. 

I respectfully request that this Committee give the Blue Dog Substitute its full 

consideration. On behalf of the entire Blue Dog Coalition, which has formally endorsed this proposal, I urge you to allow a debate of and a vote upon this Substitute 

on the floor of the House of Representatives. 

PREPARED STATEMENT OF HON. TOM ALLEN, A REPRESENTATIVE IN CONGRESS FROM

THE STATE OF MAINE

Thank you, Mr. Chairman. This amendment is designed to provide doctors with 

valid, evidence-based information on how drugs that treat particular diseases and 

conditions compare to one another. It will ensure that physicians and their patients 

have access to credible, unbiased, evidence-based data on the comparative-effectiveness and cost-effectiveness of prescription drugs. 

This amendment is based on H.R. 2356, the Prescription Drug Comparative Effectiveness Act of 2003, a bipartisan bill which was introduced by Representative 

JoAnn Emerson and me, along with five Democratic and five Republican original 

cosponsors on June 12. The amendment requires the National Institutes of Health 

(NIH) to conduct research, and the Agency for Healthcare Research and Quality 

(AHRQ) to conduct studies, on the comparative effectiveness and cost-effectiveness 

of prescription drugs that account for high levels of expenditures or use by individuals in federally funded health. In addition, the amendment directs AHRQ to submit an annual report to Congress delineating its findings and make the report publicly available on the internet. This amendment does not create a formulary. It does 

not restrict access. Rather, it provides more information to doctors and consumers. 

This amendment provides a sound, bipartisan approach to a fundamental challenge: to ensure that our prescription drug spending is based on evidence-based research and not the latest television ad or marketing campaign in doctor’s offices. 

Currently, drug companies promote their drugs as safer or more effective than competing drugs, but this promotion is too often based on poorly designed studies or 

other questionable sources of information. 

The FDA is responsible for determining safety and effectiveness of prescription 

drugs (does the drug treat the condition its label says it treats), but there is no government entity responsible for examining the comparative effectiveness of prescription drugs (e.g., is drug A more effective at treating a particular condition than drug 

B). FDA judges the effectiveness of drugs compared to a placebo but does not ordinarily make judgments about the comparative effectiveness of drugs for the same 

indication, nor does it take into account relative costs. 

This type of evidence-based review is happening at the state level, with the state 

of Oregon leading the way. Beginning in 2001, the state of Oregon implemented evidence-based review of drug effectiveness in its Medicaid program. To date, the program has examined five classes of drugs, including non-steroidal antiinflammatories; long acting opiate analgesics; proton pump inhibitors for treating 

heartburn/acid reflux; statins for lowering cholesterol; and estrogens for treatment 

of menopausal symptoms and prevention of low bone density and fractures. Oregon 

has seen reductions in drug spending in their Medicaid program of almost 5 percent, 

and Michigan, with a similar program, has seen overall savings of nearly 10 percent. Several states plan to develop programs similar to Oregon’s, including North 

Carolina, California, Idaho, Washington, and Arkansas. 

The amendment recognizes that doctors need a range of treatment options in 

order to make informed choices based on individual patient needs. The amendment 

would ensure that physicians have access to objective, evidence-based, non-biased 

information on which drugs are likely to be most effective at treating a particular 

condition. I urge the committee to adopt this amendment. 

PREPARED STATEMENT OF HON. JIM LANGEVIN, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF RHODE ISLAND

Mr. Chairman, I feel it is essential that we allow the bulk purchasing power of 

40 million Medicare beneficiaries to be used to lower the high cost of their prescription medications. As this bill expressly forbids the Administrator of the prescription 

drug benefit from doing that, I am before you today to ask that the Members of our 

chamber have the opportunity to vote to remove that restrictive language. 

Like many other parts of the country, my home state of Rhode Island uses bulk 

purchasing power of seniors eligible for Medicaid to negotiate discounts for this population. This program has met with a great deal of success. Eligible Rhode Island 

21

seniors are able to purchase prescription medications at a price negotiated by the 

state, which is currently 13 percent below the average wholesale price. However, 

due to financial constraints, the program can only cover a portion of the cost, and 

many seniors find themselves just above the income cap and ineligible for any assistance. 

Here we have a situation with over 40 million people with a common and basic 

need, yet instead of taking advantage of that purchasing power to negotiate lower 

prices for the most rapidly increasing component of health care costs, the federal 

government is actually considering outlawing that practice. America’s seniors have 

made it clear that they want the government to assist them in obtaining their prescription drugs at a fair price. The Secretary of the Veterans’ Administration and 

the Medicaid programs have the authority to use the bulk purchasing power of their 

constituencies to negotiate lower prices. Seniors without access to the VA or to Medicaid, who rely on Medicare, deserve no less. 

Earlier this week, I joined with the Rhode Island Academy of Family Physicians 

in releasing a survey showing that a third of seniors in Rhode Island are relying 

on physician samples for their necessary medications and 20 percent are failing to 

take them as prescribed because of cost—skipping prescriptions to make them last 

longer and failing to refill them. The survey reiterates what we already know—that 

cost is the greatest barrier to seniors taking their prescriptions. These issues are 

not unique to Rhode Island, and this situation will not fix itself. An analysis of H.R. 

2473 by the Consumer’s Union shows that national spending on prescription drugs 

continues to grow, and if we don’t take action to curb costs now, seniors will pay 

more out of pocket in 2007 with the prescription drug benefit than they are paying 

in 2003 without it. All Members of the House of Representatives should be given 

the opportunity to vote on an amendment that would open the door for the government to take action to lower drug prices for our seniors. By forbidding cost control, 

we essentially take the meaning out of the benefit we have fought to offer our seniors for so long. 

Mr. Chairman, I thank you and the Committee for considering my amendment 

and for the opportunity to testify this evening. I am happy to respond to any questions you might have. 

PREPARED STATEMENT OF HON. PAUL E. KANJORSKI, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. Chairman and Members of the Committee, I appreciate the opportunity to 

offer my thoughts about competitive bidding for durable medical equipment. This 

issue is of great concern to the people of my Congressional district in Northeastern 

Pennsylvania. 

As you consider the Medicare reform legislation before you, I urge to remove the 

provision authorizing a competitive bidding procedure for durable medical equipment. 

Such a competitive bidding process would jeopardize countless small business jobs 

across the country, and limit patients’ choice of providers as small companies producing durable medical equipment go out of business. Within my district, over 1,200 

workers in just one local company, Pride Mobility Products, could lose their jobs due 

to a dramatic shift in the type and amount of products purchased by customers if 

a competitive bidding program were implemented. 

I recognize that cost-saving measures are an important aspect of this legislation. 

However, within the realm of durable medical equipment, I believe these cost savings could better be achieved through an approach utilized in the Senate version 

of the bill. There, savings on durable medical equipment are attained by imposing 

a seven-year CPI–U price freeze on the fee schedules for durable medical equipment. According to the Congressional Budget Office, this measure would provide 

equivalent cost savings, yet would eliminate the damage to patients and small businesses that a competitive bidding system as contemplated in the House bill would 

create. A price freeze would further not require the development and administration 

of a new bureaucracy. 

In closing, I recognize that this is a highly complex issue, but one that is extremely important to my congressional district. Thank you again for giving me the 

opportunity to present these facts to you today. 

22

PREPARED STATEMENT OF HON. JOHN F. TIERNEY, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF MASSACHUSETTS

Mr. Chairman, Mr. Chairman, I thank you and the other members of the Committee on Rules for giving me the opportunity to present testimony on an amendment I hope to offer to the Medicare Prescription Drug and Modernization Act 

which will protect the private prescription drug benefits for Medicare-eligible retirees. 

As many as 7 million American retirees have already fallen victim to post-retirement cutbacks or elimination of health care benefits—benefits they worked their entire life to attain. Without my amendment, this legislation will accelerate that process. 

Under the Medicare bill, retirees who receive coverage from their former employer 

would not be able to count employer-paid costs toward the $3,500 out of pocket catastrophic coverage threshold. Thus, retirees with employer-based health care (and 

their former employers) are penalized because this employer coverage is not considered spending. 

The Congressional Budget Office estimates that 32 percent of retirees that have 

a drug benefit through their employers will lose coverage as a result of this legislation, because there will be no incentive for employers to provide it. 

Unfortunately, some corporations are likely to use the excuse that Congress provided a Medicare prescription drug benefit at all to cut their retirees off from this 

promised benefit. 

The consequences are twofold: 

First and foremost, employees will be denied a key component of the health care 

benefits that they were promised upon their retirement. These retirees lived up to 

their end of the employment bargain during years of hard work; they earned this 

benefit; now the companies that they faithfully served will not be held up to the 

same standard. 

And the impact may be dramatic—roughly 12 million Medicare beneficiaries 

(about one third of all beneficiaries) currently have retiree coverage through a 

former employer. 

Second, the cutback in private coverage will place increased pressure on the Medicare system when these retirees turn to the program for full coverage. This change 

will unfairly shift the cost burden for their prescription drugs from private companies—who took on the burden willingly as an explicit incentive they offered to their 

employees—over to the federal government. 

My amendment would protect retirees and bring common sense and fairness back 

to retiree health. Specifically: 

My amendment will protect retirees by prohibiting employers from making postretirement cancellations or reductions of prescription drug benefits that Medicare eligible retirees were entitled to when they retired; 

It will protect taxpayers by allowing retirees to retain their private coverage; 

And it will both protect retirees and employers by allowing employer-paid prescription drug expenses (and retiree cost sharing under the former employer’s plan) 

to count as beneficiary ‘‘out of pocket’’ expenses for purposes of reaching the catastrophic coverage threshold. 

This amendment is strongly endorsed by the National Retiree Legislative Network 

and it’s over 1.6 million members across the country. They have joined together to 

address the crisis in retiree health care, which—without my amendment—the Medicare Prescription Drug and Modernization Act threatens to make far worse. 

Again, Mr. Chairman, I thank you and the other members of the Committee for 

your consideration. I hope you will make my amendment in order.

Mr. MCGOVERN. I would also like to ask unanimous consent to 

insert in the record a letter that was addressed to John Dingell 

from Senator Kennedy of Massachusetts in opposition to the House 

bill, in which he called it ‘‘opening the door to privatization of 

Medicare.’’ I would like that to be in the record as well, sir. 

The CHAIRMAN. Without objection. 

[The information follows:]

23


Insert graphic folio 39 89585A.001
24


Insert graphic folio 40 89585A.002
25

Mr. MCGOVERN. I just have a few brief questions. 

On the issue of copays for home health care, because that is what 

I was talking about earlier, Mrs. Johnson, you say it is only 1.5 

percent, it is not that big of a deal. But, on average, that could be 

$40 per episode or $60 per episode, in some cases even $100 per 

episode. That is a pretty big deal to a lot of seniors on fixed incomes. 

We can debate whether it is a good idea or not, but I guess my 

question to you is, given the fact that the Energy and Commerce 

Committee voted one way on this and the Ways and Means voted 

the other, my question to both of you is, at a minimum, would you 

be in favor of allowing us to have an amendment on the floor that 

we can debate this issue? 

I mean, everybody has their different opinions on it. We can 

argue it. But given the fact that the two committees of jurisdiction 

were split, wouldn’t it be appropriate for us to have that amendment on the floor? That is my question. 

Mrs. JOHNSON. That is certainly a decision for the Rules Committee. 

This is kind of an age-old debate. It is an easier debate, I think, 

when we are talking about per episode than when we are talking 

about per visit. It is just a question of whether you think—if your 

copayment——

Mr. MCGOVERN. But $100 per episode is a lot of money. 

Mr. WALDEN. If I might, you are limited to $40 per episode, and 

people under 135 percent of poverty don’t pay the copayment at all. 

And you get 4 visits. 

Mr. MCGOVERN. But, you know, that is still significant—I guess 

in your committee you voted to remove this? 

Mr. WALDEN. I did. I also voted and the committee voted to increase the reimbursement rate by 5 percent the next 2 years. 

Mr. MCGOVERN. My only question to you is, we can argue the 

merits of this and we can do it on the floor and/or here as well, 

but—would you object to an amendment that you had the privilege 

to vote on in your committee? 

Mr. WALDEN. Well, again, as I say, my amendment covered two 

points, one was the copay and the other was increasing, which I 

think is even more important, the 5 percent reimbursement rate in 

both of the next 2 years. 

And what I have seen in a very rural district is that home health 

is getting hit hard and going out of business. I represent a district 

that is bigger than your State. 

Mr. MCGOVERN. Believe me, it is not just in rural areas. We are 

having a problem in urban as well. 

Mr. WALDEN. I understand that. But I think with the change in 

how the copay will work in home health care, I am satisfied with 

the bill the way it is. 

Mr. MCGOVERN. I appreciate your satisfaction. I am not satisfied. 

But I guess I would like the opportunity to be able to have the freedom to vote on some of these things. That is all my point is. 

Mrs. JOHNSON. I should, though, clarify the fact, five or fewer 

visits are exempted. The average per episode cost is $3,400, so we 

are talking about a $40 copayment for an average taxpayer cost of 

$3,400. 

26

Mr. MCGOVERN. But, again, depending on your income level. 

Let me ask you another question. 

Mrs. JOHNSON. Way below income. 

Mr. MCGOVERN. The other question is, you both represent two 

different committees here. And you mentioned the drug importation bill as being a new provision that wasn’t in either of the Energy and Commerce mark or the Ways and Means mark. 

Are there any other provisions that are in this bill that we 

haven’t read yet, that were in neither the Energy and Commerce 

mark nor the Ways and Means mark? 

Mrs. JOHNSON. Yes, the Hatch-Waxman and the discount card. 

Mr. WALDEN. I went through some of them, and I referenced the 

others, the AWP. 

Do you want me to go through them? Would that be helpful? 

The CHAIRMAN. Whatever Mr. McGovern would like. 

Mr. MCGOVERN. Yes. 

Mr. WALDEN. There are only three, so that I can get into detail 

for the sake of time. 

AWP, the final language establishing house CMS reimbursements for drugs administered in a physician’s office setting is similar to policy passed by the Energy and Commerce Committee last 

week, similar to committee passed bill, H.R. 1, will ensure that 

physicians will retain the ability to obtain their drugs through either a contractor or through a market reimbursement system 

known as the ‘‘average sales price system.’’

At the markup, the committee added an amendment that increased reimbursement to ASP from 100 percent to 112 percent. 

The language is largely retained in H.R. 1. 

Medicaid DSH, also H.R. 1, also contains neither the Medicaid 

disproportionate share hospitals—the legislation expands upon the 

marked-up Energy and Commerce Committee policies, provided all 

States with a one-time, 20 percent increase in their Medicaid DSH 

allotments. This policy targets dollars to those hospitals that need 

resources the most. 

And, finally, rural policies. In addition to some of the party rural 

provisions that were passed out of the Ways and Means Committee, the Energy and Commerce Committee contains specific provisions that increase payments for providers in rural areas. 

First, we establish a floor on the reimbursements for the component fee schedule. This policy will help ensure physicians in rural 

areas are reimbursed adequately for their services. 

Second, we also bump up payment levels 5 percent annually for 

2 years to home health agencies operating in rural areas. This policy will ensure that those home health agencies located in some of 

our most vulnerable areas receive some added help. 

Both of those provisions are contained in H.R. 1. 

Mr. MCGOVERN. Are there any provisions, or is there any language in this new bill that would apply to any single corporation 

or industry or interest group? 

And the reason why I ask that question is because I just—I don’t 

want to wake up on Monday morning and read the New York 

Times and find out, like we did on the Homeland Security bill, that 

there is a deal for, you know, Eli Lilly or some company. I mean, 

I am just asking for your—I haven’t gone through all of this. 

27

Mr. WALDEN. I am not aware of any such provision. 

Mr. MCGOVERN. We have your assurance that there are no special provisions in here for any single corporation? 

Mrs. JOHNSON. There are no provisions for any single corporation, to my knowledge. But there is a change in how we respond 

to employer-provided retirement plans to try to prevent companies 

from dropping those plans. And the estimate is that far fewer companies will drop those plans than would have under any other scenario. 

One of the differences between the Democratic alternative and 

our alternative is that under the Democratic alternative, a great 

majority of the employer-provided plans will drop out because the 

plan is very good. Why should they be in it? 

Under our plan, we provide them with an incentive to stay in by 

providing them with a portion of the subsidy of the plan. We don’t 

provide them with the equivalent subsidy for the whole plan because their people don’t meet the out-of-pocket requirement for catastrophic coverage. But we do give them a capitated amount that 

represents the 80/20, proportionate to their drug spending if their 

drug benefit is as good as ours. 

Mr. MCGOVERN. Finally, one last question, Mr. Walden. How 

many Medicare HMOs offer plans in your district today? 

Mr. WALDEN. You know, most of the Medicare+Choice plans have 

left my district, in part because Oregon has one of the lowest 

AAPCC reimbursement rates in the country, proving that the Federal Government believes no good deed should go unpunished. 

We have one of the shortest stays and least costly delivery systems. I would be happy to compare ours against any other State 

that has $700 per person per county, when we get $400, and equalize those rates. I would love to have that amendment, Mr. Chairman, if I could. 

Mr. MCGOVERN. Why I raised it is, if those plans can’t make it 

in your district, how can the new plans make it that are called for 

in this bill?

Mrs. JOHNSON. There are two ways in which the new plans will 

reach more broadly than the old plans did. 

First of all, the Choice plans will be funded at the same level as 

Medicare. They will get 100 percent fee-for-service, just like we 

spend on ordinary fee-for-service beneficiaries. 

And then their future growth and reimbursements are tied to 

fee-for-service, so it is certain and predictable. That helps them 

stay in the market. 

And then, in 2006, they have the right to bid their own premiums and not be dependent on the vagaries of congressional action, but they have to bid around the fee-for-service costs. So if 

they bid above that, beneficiaries will have to pay more. If they bid 

below that, but they can give lots more benefits—if they bid below 

that, the beneficiary can have a premium reduction. 

So that will give us a good understanding of whether or not those 

plans are any more efficient than Medicare. And, in addition, the 

enhanced plans will be required to be regional. 

That is the nature of them, there will be 10 regions. So under 

that scenario, Oregon would be a very good deal for an enhanced 

plan, because they are a cheap delivery area; but on the other 

28

hand, their AAPCC would be brought up by the regional average. 

So the likelihood that Oregon would be part of a regional plan and 

enjoy the benefits of better technology, of better disease management and integrated care, regionally, is very great. 

If you listen to Tommy Thompson, he really thinks—and, remember, he is an old hand at rural health from Wisconsin, and he really thinks that the enhanced—bucking up of the rural providers to 

the reimbursement package and the enhanced plan is going to improve the quality of rural health dramatically. And all of the actuaries say there will be a 40 percent penetration, or take-up rather. 

Mr. MCGOVERN. With all due respect, I will believe it when I see 

it. But I appreciate your comments here. 

Mr. FROST. If the gentleman will yield, I wanted to be clear on 

Mr. Walden’s answer because for the last 10 years, up until 2 years 

ago, I had a significant rural area in my district also; and all of 

the HMOs withdrew from my two rural counties. Not a single 

HMO serves my two rural counties. 

Are there any HMOs that currently serve your rural areas? 

Mr. WALDEN. For Medicare or in general? 

Mr. FROST. In Medicare. 

Mr. WALDEN. In terms of the Medicare+Choice plans? 

Mr. FROST. Yes. 

Mr. WALDEN. I do not believe there are. There is a hybrid of sorts 

that is left, I believe, in one county. But, Mr. Frost and Mr. McGovern, you have got to understand my district if you want to understand rural. I understand Texas understands rural, but I have got 

three counties with no hospitals, no doctors, and you drive 100 

miles to find the nearest physician. And so we are talking frontier 

medicine out there. 

The few doctors that do deliver babies are going out of business 

because the malpractice rates are skyrocketing. We need to do 

something about that, too. So we are in crisis out there. 

Mrs. JOHNSON. I do want the record to show that the reason 

those plans dropped out is that they would be totally reimbursed 

at 95 percent. Gradually, their reimbursements shrank, and many 

of them were down to between 80 and 85 of AWP as a reimbursement subsidy. First, they shrank benefits and then they left the 

market. 

One of the reasons you have to not only bring them back in at 

a reasonable reimbursement, but the reimbursement has to be predictable. And so we tie it to simply growth in fee-for-service. We 

will pay no more or no less than we paid for the average Medicare 

beneficiary under the plans. So we will now finally see whether 

stable plans can offer seniors more under integrated care. 

We also mandate, although we don’t pay them any more, that 

they do disease management across the board. 

Mr. FROST. I would be happy to provide this, but I would point 

out, in addition to the fact that there were—my two rural counties, 

all of the HMOs went away; in my two urban counties, where there 

were eight HMOs under Medicare, now there is only one. 

Mrs. JOHNSON. It was all the same mechanism. It is a tragedy. 

When I lost my last HMO, the people who complained the most 

were the people who were in the cardiac disease management programs, and there was nothing in Medicare that they could go to. 

29

So I can’t tell you what an advance this is going to be in health 

care, to not only require the plans to do this, but set Medicare up 

to do this. 

Mr. FROST. Can you understand why there is a healthy skepticism on the part of many of us in relying on the private plan that 

didn’t work under Medicare+Choice? 

Mrs. JOHNSON. We think we have dealt with those problems, regulatory, reimbursement-wise, and there are a couple of other things 

that are there. 

The CHAIRMAN. Mr. McGovern. 

Mr. MCGOVERN. I yield. 

The CHAIRMAN. Mr. Hastings. 

Mr. HASTINGS of Washington. Thank you, Mr. Chairman. 

I would like to know, if this can be confirmed, that the scoring on this bill is less than the $400 billion that we had within our 

budget program parameters. 

Mrs. JOHNSON. Yes, 393 billion. 

Mr. HASTINGS of Washington. I just—Mr. Chairman, I would like 

to make note, in my first term, I recall, in 1995, the Medicare 

trustees gave a report to Congress; and they said, unless there are 

structural changes made in Medicare, Medicare would be dead 

broke, if my memory serves me correctly, by the year 2001—if my 

memory serves me correctly. 

I recall that many of us, particularly on our side, were looking 

at ways to reform Medicare; and I know I can speak personally for 

myself, spent a lot of time in my district talking about the options 

of even talking about it. 

Of course, nothing, unfortunately, happened in 1995 or in 1996. 

As a matter of fact, I also recall that in 1996 the issue of Medicare 

reform became a huge political football. In other words, our seniors 

were trying to help whipsaw all of this, so we came back in 1997. 

And, again if my memory serves me correctly, we discovered that 

the Medicare trustees came back and said we got some bad news. 

The 2001 date now has been accelerated to 2000. So we had a 3-

year window to try to fix it before it went dead broke. 

We did make some fixes that moved that ahead. We can debate 

and nitpick on whether they were exactly the right things to do. 

But I want to commend Nancy. I know you have been in the forefront of this all of the time that I have been here—and, of course, 

Energy and Commerce also—and to recognize that prescription 

drugs have a therapeutic value that ought to be part of this whole 

thing, but it wouldn’t work unless you had basic reforms, I think 

that you have, in the product that you are coming up with here, 

accomplished that. 

I think and I hope that there will be some time so that we can 

go back and review some of these things on a regular basis and 

make sure that they are working, that they are not set in concrete. 

I think the product that you have come up with is a product that 

is certainly worthy of support. 

Based on this, we tend to forget past history, and if we forget 

past history, we are bound to repeat it again. The sooner we confront this, the better off we are. 

I commend both of you and the committees for doing this work. 

It is something that needs to be done; the time is right. And for 

30

those that say this is being imposed upon us in a very short period 

of time, I think you have simply forgotten that we talked about 

taking this up all along. This is something we knew we were going 

to take up the first part of this year. 

So I wanted to commend you and thank you very much. 

The CHAIRMAN. Thank you very much. 

Mr. Hastings. 

Mr. HASTINGS of Florida. Thank you very much, Mr. Chairman. 

First, Mr. Chairman, when an errata occurs, people should be big 

enough to admit it. Let me say to Mr. Linder that he is absolutely 

correct; I made the fatal mistake of quoting colleagues that have 

made the fatal mistake of not having read the legislative history. 

I ask unanimous consent that the legislative history with reference to the origin of Medicare, dated March 23, 1965, be submitted into the record. And it would include, Mr. Chairman, that 

there were 237 yeas that were Democrats. And Mr. Linder is correct, there were 70 Republicans that voted yes; there were 47 

Democrats that voted no and 69 Republicans that voted no. 

With your permission, I think it would help a lot of people. 

[The information follows:]

LEGISLATIVE HISTORY: VOTE TALLIES FOR THE PASSAGE OF MEDICARE IN 1965 

House and Senate Votes: D = Democrat R = Republican 

House Vote—July 27, 1965 

YEAS: (307)

Adams-D; Addabbo-D; Albert-D; Anderson, Tenn.-D; Annunzio-D; Ashley-D; 

Ashmore-D; Aspinall-D; Ayres-R; Baldwin-R; Bandstra-D; Barrett-D; Bates-R; 

Beckworth-D; Bell-R; Bingham-D; Boggs-D; Boland-D; Bolling-D; Brademas-D; 

Brooks-D; Broomfield-R; Brown, Calif.-D; Broyhill, N.C.-R; Broyhill, Va.-R; BurkeD; Burton, Calif.-D; Byrne, Pa.-D; Byrnes, Wis.-R; Callan-D; Cameron-D; Carey-D; 

Carter-R; Cederberg-R; Celler-D; Chamberlain-R; Chelf-D; Clark-D; Cleveland-R; 

Clevenger-D; Cohelan-D; Conable-R; Conte-R; Conyers-D; Corbett-R; Corman-D; 

Craley-D; Cramer-R; Culver-D; Cunningham-R; Curtin-R; Daddario-D; Dague-R; 

Daniels-D; Dawson-D; de la Garza-D; Delaney-D; Dent-D; Denton-D; Diggs-D; Dingell-D; Donohue-D; Dow-D; Dulski-D; Duncan, Oreg.-D; Dwyer-R; Dyal-D; 

Edmondson-D; Edwards, Calif.-D; Ellsworth-R; Evans, Colo.-D; Everett-D; Evins, 

Tenn.-D; Fallon-D; Farbstein-D; Farnsley-D; Farnum-D; Fascell-D; Feighan-D; FinoR; Flood-D; Fogarty-D; Foley-D; Ford, William D.-D; Fraser-D; Friedel-D; Fulton, 

Pa.-R; Fulton, Tenn.-D; Gallagher-D; Garmatz-D; Gettys-D; Giaimo-D; Gibbons-D; 

Gilbert-D; Gilligan-D; Gonzalez-D; Goodell-R; Grabowski-D; Gray-D; Green, Oreg.-

D; Green, Pa.-D; Greigg-D; Grider-D; Griffin-R; Griffiths-D; Grover-R; Gubser-R; 

Gurney-R; Hagen, Calif.-D; Halpern-R; Hamilton-D; Hanley-D; Hanna-D; Hansen, 

Iowa-D; Hansen, Wash.-D; Hardy-D; Harris-D; Harvey, Mich.-R; Hathaway-D; Hawkins-D; Hays-D; Hechler-D; Helstoski-D; Henderson-D; Herlong-D; Hicks-D; 

Holifield-D; Holland-D; Horton-R; Hosmer-R; Howard-D; Hull-D; Hungate-D; HuotD; Hutchinson-R; Ichord-D; Irwin-D; Jacobs-D; Jennings-D; Joelson-D; Johnson, 

Calif.-D; Johnson, Okla.-D; Johnson, Pa.-R; Jones, Ala.-D; Karsten-D; Karth-D; Kastenmeier-D; Kee-D; Keith-R; Kelly-D; King, Calif.-D; King, N.Y.-R; King, Utah-D; 

Kirwan-D; Kluczynski-D; Krebs-D; Kunkel-R; Landrum-D; Leggett-D; Lindsay-R; 

Long, Md.-D; Love-D; McCarthy-D; McClory-R; McCulloch-R; McDade-R; McDowellD; McEwen-R; McFall-D; McGrath-D; Macdonald-D; Machen-D; Mackay-D; MackieD; Madden-D; Mailliard-R; Martin, Mass.-R; Mathias-R; Matsunaga-D; Matthews-D; 

Meeds-D; Miller-D; Mills-D; Minish-D; Mink-D; Minshall-R; Moeller-D; Monagan-D; 

Moore-R; Moorhead-D; Morgan-D; Morris-D; Morrison-D; Morse-R; Mosher-R; MossD; Multer-D; Murphy, Ill.-D; Murphy, N.Y.-D; Natcher-D; Nedzi-D; Nix-D; O’BrienD; O’Hara, Ill.-D; O’Hara, Mich.-D; O’Konski-R; Olsen, Mont.-D; Olson, Minn.-D; 

O’Neill, Mass.-D; Ottinger-D; Patman-D; Patten-D; Pelly-R; Pepper-D; Perkins-D; 

Philbin-D; Pike-D; Pirnie-R; Powell-D; Price-D; Pucinski-D; Purcell-D; Race-D; Randall-D; Redlin-D; Reid, N.Y.-R; Reifel-R; Reinecke-R; Resnick-D; Reuss-D; Rhodes, 

Pa.-D; Rivers, Alaska-D; Roberts-D; Robison-R; Rodino-D; Rogers, Colo.-D; Rogers, 

31

Fla.-D; Ronan-D; Roncalio-D; Rooney, N.Y.-D; Rooney, Pa.-D; Roosevelt-D; Rosenthal-D; Rostenkowski-D; Roush-D; Roybal-D; Ryan-D; St. Germain-D; St. Onge-D; 

Saylor-R; Scheuer-D; Schisler-D; Schmidhauser-D; Schneebeli-R; Schweiker-R; 

Secrest-D; Senner-D; Shipley-D; Sickles-D; Sikes-D; Sisk-D; Slack-D; Smith, IowaD; Smith, N.Y.-R; Stafford-R; Staggers-D; Stalbaum-D; Stanton-R; Steed-D; Stratton-D; Stubblefield-D; Sullivan-D; Sweeney-D; Talcott-R; Taylor-D; Teague, Calif-R; 

Tenzer-D; Thomas-D; Thompson, N.J.-D; Thompson, TeX.-D; Todd-D; Trimble-D; 

Tunney-D; Tupper-R; Tuten-D; Udall-D; Ullman-D; Van Deerlin-D; Vanik-D; 

Vigorito-D; Vivian-D; Walker, N. Mex.-D; Watkins-R; Watts-D; Weltner-D; WhalleyR; White, Idaho-D; White, Tex.-D; Widnall-R; Wilson, Charles H.-D; Wolff-D; 

Wright-D; Wyatt-R; Wydler-R; Yates-D; Young-D; Zablocki-D. 

NAYS: (116)

Abbitt-D; Abernethy-D; Adair-R; Anderson, Ill.-R; Andrews, George W.-D; Andrews, Glenn-R; Andrews, N. Dak.-R; Arends-R; Ashbrook-R; Baring-D; Battin-R; 

Belcher-R; Bennett-D; Berry-R; Betts-R; Bolton-R; Bray-R; Brock-R; Brown, Ohio-R; 

Buchanan-R; Burleson-R; Burton, Utah-R; Cabell-D; Callaway-R; Casey-D; ClancyR; Clausen, Don H.-R; Clawson, Del.-R; Collier-R; Cooley-D; Curtis-R; Davis, Ga.-

D; Davis, Wis.-R; Derwinski-R; Devine-R; Dickinson-R; Dole-R; Dorn-D; Dowdy-D; 

Downing-D; Duncan, Tenn.-R; Edwards, Ala.-R; Erlenborn-R; Findley-R; Fisher-D; 

Flynt-D; Ford, Gerald R.-R; Fountain-D; Frelinghuysen-R; Fuqua-D; Gathings-D; 

Gross-R; Hagan, Ga.-D; Haley-D; Hall-R; Halleck-R; Hansen, Idaho-R; Harsha-R; 

Harvey, Ind.-R; Hebert-D; Jarman-D; Jonas-R; Jones, Mo.-D; Kornegay-D; Laird-R; 

Langen-R; Latta-R; Lennon-D; Lipscomb-R; Long, La.-D; McMillan-D; MacGregor-R; 

Mahon-D; Marsh-D; Martin, Ala.-R; Martin, Nebr.-R; May-R; Michel-R; Mize-R; 

Morton-R; Murray-D; Nelsen-R; O’Neal, Ga.-D; Passman-D; Pickle-D; Poage-D; PoffR; Pool-D; Quie-R; Quillen-R; Reid, Ill.-R; Rhodes, Ariz.-R; Rivers, S.C.-D; Rogers, 

Tex.-D; Roudebush-R; Rumsfeld-R; Satterfield-D; Scott-D; Selden-D; Shriver-R; 

Skubitz-R; Smith, Calif.-R; Smith, Va.-D; Springer-R; Stephens-D; Teague, Tex.-D; 

Thomson, Wis.-R; Tuck-D; Utt-R; Waggonner-D; Walker, Miss.-R; Whitener-D; Whitten-D; Williams-D; Wilson, Bob-R; Younger-R. 

NOT VOTING: (10)

Blatnik-D; Bonner-D; Bow-R; Cahill-R; Colmer-D; Keogh-D; Toll-D; McVicker-D; 

Watson-D; Willis-D. 

FINAL SENATE VOTE—JULY 28, 1965

YEAS: (70)

Aiken-R; Anderson-D; Bartlett-D; Bass-D; Bayh-D; Bible-D; Boggs-R; Brewster-D; 

Burdick-D; Byrd, W. Va.-D; Cannon-D; Carlson-R; Case-R; Clark-D; Cooper-R; Cotton-R; Dodd-D; Douglas-D; Fong-R; Fulbright-D; Gore-D; Gruening-D; Hart-D; 

Hartke-D; Hayden-D; Hill-D; Inouye-D; Jackson-D; Javits-R; Jordan, N.C.-D; Kennedy, Mass.-D; Kennedy, N.Y.-D; Kuchel-R; Lausche-D; Long, Mo.-D; Long, La.-D; 

Magnuson-D; Mansfield-D; McClellan-D; McGee-D; McGovern-D; McIntyre-D; 

McNamara-D; Metcalf-D; Mondale-D; Monroney-D; Montoya-D; Morse-D; Moss-D; 

Muskie-D; Nelson-D; Neuberger-D; Pastore-D; Pell-D; Prouty-R; Proxmire-D; Randolph-D; Ribicoff-D; Russell, S.C.-D; Russell, Ga.-D; Saltonstall-R; Scott-R; 

Smathers-D; Smith-R; Symington-D; Talmadge-D; Tydings-D; Williams, N.J.-D; 

Yarborough-D; Young, Ohio-D. 

NAYS: (24)

Allott-R; Bennett-R; Byrd, Va.-D; Dominick-R; Eastland-D; Ellender-D; Ervin-D; 

Fannin-R; Hickenlooper-R; Holland-D; Hruska-R; Jordan, Idaho-R; Miller-R; Morton-R; Mundt-R; Murphy-R; Pearson-R; Robertson-D; Simpson-R; Stennis-D; Thurmond-R; Tower-R; Williams, Del.-R; Young, N. Dak-R. 

NOT VOTING: (6)

Church-D; Curtis-R; Dirksen-R; Harris-D; McCarthy-D; Sparkman-D.

32

SUMMARY OF PARTY AFFILIATION ON MEDICARE VOTE 

Yea Nay Not

voting 

Senate: 

Democrats .............................................................................................................................. 57 7 4 

Republicans ........................................................................................................................... 13 17 2 

House: 

Democrats .............................................................................................................................. 237 47 8 

Republicans ........................................................................................................................... 70 69 2

The CHAIRMAN. Thank you. 

I frankly thought that you were talking about the 1993 tax bill 

when you were referring to the 1965 Medicare bill. You would have 

been correct. 

Mr. HASTINGS of Florida. I understand you very well. That is 

what kind of saved Medicare. 

But now, by 2010, it is dark and the rest of you all don’t pay attention, it will probably be gone, out of business, by that time, 

thanks to what we have done since then in the way of tax cuts. It 

could have paid for all of this. 

But, that said, let me ask either of our witnesses who—I echo the 

thanks that have been offered to them by colleagues for your 

work—why does this bill go into effect in 2006? 

Mrs. JOHNSON. Our bill goes into effect in 2006, and I believe 

every other initiative does. It takes 2 years to set up a nationwide 

prescription drug plan. To compensate for that, we put in the immediate drug card. 

Incidentally, I appreciated your reading that e-mail from your 

constituent. Unfortunately, there are a lot of misunderstandings 

behind that, and I hope after the sort of political debate gets done, 

that we will all spend some time after the break and be able to give 

our constituents a clear understanding of what the real deal is and 

what has to be resolved in conference. 

Mr. HASTINGS of Florida. I am certain that I will do my best. I 

won’t have very much choice. I don’t go around very much trying 

to talk about parochial interests in places that I represent. 

I have the good fortune of representing urban and rural areas. 

It is challenging on every given occasion, and I doubt very seriously, based on the recent census statistics, if there is any Member 

of Congress—perhaps those that live in South Florida, Republican 

and Democratic, may have as many people that this bill will affect 

as do I. But I don’t approach it from that standpoint. 

I am just as worried about what is happening in Greg’s and your 

district as I am in mine, as it pertains to this matter. The people, 

for example, 12 million of them that are covered by employer plans, 

CBO estimated that 32 percent of them would lose their existing 

coverage. 

And I heard you in response to Mr. McGovern, Mrs. Johnson, 

talking about the fact that the proposed subsidy would encourage 

employers to keep people in the plan. But there is evidence rife 

throughout America that employers are already dropping coverage. 

Now, hopefully, this will be correct, but what in the bill, specifically—explain to us, if you will, what is going to really encourage 

these employers? 

33

Mrs. JOHNSON. Okay. In the—first of all, in our bill, it is predicted—I don’t know how much reliability these predictions have, 

but that 32 percent will go out. Some of those would have gone out 

anyway. The Senate bill is 37 percent, and the Democratic substitute is 100 percent. So that is sort of the lay of the land. 

In our bill, what we do—and the employers are very enthusiastic 

about this—we have negotiated a capitated payment, so they don’t 

have to restructure their plan. The union plans and the business 

plans don’t have to be restructured, but as they spend—remember, 

they don’t get any benefit unless they spend. As they spend, then 

we give them 28 percent of their drug costs up to $5,000. 

That was the way that was worked out, that they preferred, and 

that we felt was a fair estimate of the benefit they would get from 

the 80/20 if we went person by person. 

They don’t get any benefit from the catastrophic provision. 

Mr. HASTINGS of Florida. I have just one other question of either 

of you, and that is in the area of low-income protection, because 

that is where a lot of us are impacted. The restrictive asset provisions that I looked at just a minute ago don’t give me any great 

comfort, and I would wonder how we are improving the protection 

for low-income beneficiaries? 

Mrs. JOHNSON. Well, we are improving the protections, and I will 

let Greg speak to this, too. 

Mr. WALDEN. Yes. In fact, in this bill, it becomes three times the 

SSI. 

Mrs. JOHNSON. The asset test. 

Mr. WALDEN. So it is triple that. 

So we have tried to open it up to care for as many low-income 

as possible. Plus, by having the phase-out at the top end—a cap, 

if you will, on the richest of the rich in American seniors—starting 

at 60,000 and then phasing out at a higher level than that, we are 

able to take the dollars available to us under the budget resolution, 

target more of them to the lower-income folks who need it most, 

people in your district, people in my rural district. 

It doesn’t matter, if you are low income, where you live; the 

drugs are expensive and the need is great. So we felt that was the 

most appropriate use of the expenditure that we had available to 

us, to target the most possible to the lower-income level. 

That is why on the home health copay, 135 percent of poverty, 

you don’t pay it. On the premiums for this program, I believe 135 

percent, we pick up the premium, the deductible. 

And so it really is targeted to help those most in need, sir. 

Mrs. JOHNSON. And then excluded from the asset test is the 

value of your home, without limit; a car used for necessary transportation, regardless of value, or a car not used for transportation 

$4,500 value. 

There are some other exclusions. 

Mr. HASTINGS of Florida. When all of this is finished, I didn’t 

care too much for HCFA before, but I am not going to like the administrator that has to try to implement all of this stuff. 

But I appreciate you all, Ways and Means and Energy and Commerce. I am with my colleague, Mr. McGovern; I just have to wait 

and see. And, hopefully, hopefully, as you all suggested, it will 

work out that way. 

34

The CHAIRMAN. Thank you very much, Mr. Hastings. 

Mr. Sessions. 

Mr. SESSIONS. Thank you, Mr. Chairman. I would like to join Mr. 

Hastings and thank the Commerce Committee and Ways and 

Means for not only their attention to this very important issue, but 

for the long deliberation and, I think, improving upon the product, 

in the delivery over those last few years, that I have seen. 

My observations are not unlike many of my colleagues that believe that a modern day program would have to include prescription drug coverage, prescription drug coverage for those people who 

cannot afford it. I think that prescription drugs nowadays, as the 

result of a very robust and dynamic industry, provide help not just 

with symptoms but with actual cures of many things. That is why 

I am glad that we have taken the perspective that we have to ensure that drug companies will be incented to go and produce the 

next leading-edge drug that will take care of the world’s needs, 

whether it be AIDS or whether it be something else that would 

happen across this world. 

America, I believe, does have a demand put on it to produce answers to problems wherever they exist. So I am very, very proud 

of what you have done. I am, in particular, pleased that so many 

people have shown up here this evening; and would like to impress 

upon you and let you know that I believe this committee, hopefully, 

will be looking at some perfecting amendments to take the hard 

work that you have done, but would allow us the opportunity to 

perhaps enrich this product that you have done and take as much 

time with it. 

And I want to thank both of you for your time and effort. I think 

it was a job well done, and thank you very much. 

The CHAIRMAN. Thank you very much, Mr. Sessions. 

Let me just say that we do know, as we heard from our opening 

statements, that we began this meeting at 12:50, and we have 

spent nearly 90 minutes. And I would just like to say that this is 

my fifth year as chairman of the Rules Committee, and I don’t recall when we have had any more thoughtful exchange between both 

Democrats and Republicans and the witnesses representing the respective committees. 

We all know that this is designed to address a very important 

and pressing need out there. Democrats and Republicans alike very 

much want us to provide for the American people a package which 

will ensure that they have access to affordable prescription drugs, 

and at the same time, as I said at the outset, improve, strengthen, 

protect the Medicare system. 

Both of you should be very proud. I know I speak for every member of this committee when we express our appreciation for your 

very thoughtful presentations. Thank you very much. 

Mrs. JOHNSON. Thank you. 

Mr. WALDEN. Thank you. 

The CHAIRMAN. Our next witnesses, representing the minority 

from both the Ways and Means and the Energy and Commerce 

Committees, are Mr. Sandlin and Mr. Brown. 

Gentlemen, please come forward. And let me say, as I did with 

the other witnesses, that, without objection, any prepared remarks 

35

that you have will appear in the record in their entirety, and we 

welcome a summary. 

Mr. Brown, if you would like to proceed.

STATEMENT OF HON. SHERROD BROWN, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF OHIO 

Mr. BROWN. Mr. Chairman and members of the Committee, The 

Minority on the Energy and Commerce Committee would ask for 

an open rule. If that request is not honored, the minority would ask 

that an array of substitutes and amendments be allowed on the 

floor, so that divergent views can be represented when the House 

debates this issue. 

To produce a fair debate, it is important that members have the 

opportunity to consider substitutes such as those offered by Mr. 

Rangel and Mr. Dingell, the Democratic Blue Dogs, Mr. Dooley, 

and the Republican ‘‘Rump Group,’’ as well as individual amendments addressing specific provisions of H.R. 1. 

The Committee on Energy and Commerce met in markup for 

three days. During that markup, my Democratic colleagues offered 

many worthy amendments, and I would certainly suggest that all 

of them be made in order under the rule. 

Without amendment, H.R. 1 dismantles Medicare, replacing the 

program’s defined benefits, it’s guaranteed coverage, with a defined 

contribution premium voucher. 

Medicare not only secures this nation’s retirement system and 

sustains this nation’s health system, it is enduringly popular with 

the American public. It is fundamentally wrong for Congress to 

strip Medicare beneficiaries of guaranteed, reliable health insurance under the guise of adding a drug benefit to the program. 

Amendments are also called for to address serious flaws in H.R. 

1’s drug coverage. 

Rather than simply adding a drug benefit to Medicare, this bill 

forces seniors to either join an HMO or purchase stand-alone drug 

coverage. There is no commercial market for stand-alone plans 

today. Insurers are balking at the prospect of offering stand-alone 

plans. This bill would subject millions of seniors to a private insurance experiment that is already on shaky ground. 

And the drug coverage itself is woefully inadequate. Seniors with 

$5,000 in drug expenses would still pay nearly $4,000 out of pocket. 

The bill’s coverage gap forces beneficiaries to pay 100 percent of 

their drug costs after the first $2,000 of drugs have been purchased 

until the beneficiary has spent another $2,900 out of pocket. 

And for the first time, benefits would be means-tested, transforming Medicare from a retirement savings program into a federal 

welfare program. 

The substitute which Mr. Rangel and Mr. Dingell offered in their 

respective committees is different from H.R. 1 in several key ways. 

The substitute strengthens Medicare rather than privatizing it. 

The substitute does not erect a new private insurance system and 

force seniors into it; reliable, guaranteed drug benefits are added 

to the core Medicare program. 

These benefits represent true insurance. They are comparable to 

those available to members of Congress. All seniors who contribute 

36

into Medicare would receive the same benefits out of Medicare. 

There is no means testing. 

And there are several potent cost control mechanisms in the substitute, because it would be irresponsible to pass drug coverage legislation without them. 

The substitute enables the federal government to harness the collective purchasing power of 40 million Medicare enrollees and secure discounted drug prices. 

When you think about the sales volume 40 million beneficiaries 

represents, deep discounts are fully appropriate. Yet, H.R. 1 prohibits the federal government from securing those discounts. The 

substitute also includes measures to increase access to lower cost 

generic drugs and provide for the reimportation of drugs that are 

deemed safe by the Secretary of Health and Human Services. 

These amendments are identical to those recently adopted by the 

Senate. 

H.R. 1 does not address the prescription drug coverage gap in 

Medicare; it perpetuates that gap with grossly inadequate drug 

benefits. H.R. 1 does not strengthen Medicare; it abandons it to the 

private insurance industry. 

I urge my colleagues to seriously consider whether it is in the 

best interests of this nation to take Medicare down such a reckless 

path, and I urge my colleagues on the Rules Committee to allow 

Members the opportunity to consider a range of substitutes and 

amendments. 

The CHAIRMAN. Thank you very much, Mr. Brown. We appreciate 

you being here. Thank you for your remarks. 

Mr. Sandlin. 

STATEMENT OF HON. MAX SANDLIN, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF TEXAS 

Mr. SANDLIN. Due to the time, I would just like to associate myself with what my good friend, Mr. Brown, has enumerated about 

the bill as a whole. 

I would like to say, I too join in hoping that the committee would 

allow an open rule and allow the substitutes, such as Mr. Dingell, 

Mr. Dooley, the Blue Dogs and all of the other individual amendments in an attempt to make the bill better. 

Let me make one specific point on an amendment that I have offered specifically, along with Representative Green from Texas, 

Gene Green, who is on the Commerce Committee. 

As you know, the original bill, H.R. 1, has what is commonly referred to—we refer to as ‘‘the doughnut.’’ It makes beneficiaries 100 

percent financially liable for all prescription drug costs between 

$2,000 and $4,900. That leaves beneficiaries with a gap of $2,900 

where they still are paying the premiums each month, but they are 

getting no coverage from their plan. 

And really the only way that they are going to know that, they 

are going to remember that they have coverage is when they send 

that check in every month. So all of that has to be paid for by the 

beneficiary in that range. 

This amendment offered by me and by Gene Green from Houston 

simply extends the 20 percent beneficiary cost-sharing up to the 

37

$4,900 after the $250 deductible, closes the doughnut hole. Thank 

you.

38


Insert graphic folio 58 89585A.003
39

The CHAIRMAN. Thank you very much, Mr. Sandlin. Appreciate 

that. 

Mr. Linder. 

Mr. LINDER. No. 

Mr. FROST. Mr. Chairman, at this point I would like to submit 

for the record a letter from the AARP on the subject of this legislation. 

The CHAIRMAN. Without objection, the letter will be entered. 

Mr. FROST. This is to the Honorable Bill Thomas. 

[The information follows:]

40


Insert graphic folio 60 89585A.004
41


Insert graphic folio 61 89585A.005
42


Insert graphic folio 62 89585A.006
43


Insert graphic folio 63 89585A.007
44

Ms. PRYCE. No questions. 

Mr. MCGOVERN. I wanted to thank you both for being here at almost 2:30 in the morning. And I hope, and those of us on this side 

of the aisle on the committee are going to fight for an open rule, 

because I believe this is a big enough deal, where all members 

should have an opportunity to participate in shaping what this legislation should look like. 

And by restricting the rule, quite frankly, and restricting the 

substitutes that may be offered and restricting the amendments, 

you are not only locking out Democrats, you are locking out Republicans, but you are locking out the voices of the American people 

who have very significant concerns about this. 

And I just would say, as I said in the beginning—I mean, for the 

life of me, I can’t quite understand what the emergency is, why this 

has to be rushed right now, why we can’t take this product, whatever it is, because no one has read it yet and actually go through 

it and be able to go back to our districts, whether we are Republicans or Democrats, talk to our senior citizens, lay out the plan. 

Does this make sense? Doesn’t it make sense? What are the concerns? 

Everyone talks about copays like they are no big deal. Well, for a lot of seniors on fixed incomes, $40 is a big deal, or any kind of 

copay is a big deal depending on their economic situation. 

And I worry too about the fact that we are opening the door to 

privatizing Medicare. You know, people—I am reading this article 

that just came over the Web from, I guess MSNBC.com. There is 

a quote from Chairman Bill Thomas: ‘‘To those who say that the 

bill would end Medicare as we know it, our answer is, ‘We certainly 

hope so.’ ’’ 

Well, I like Medicare, and most of my constituents think it is a 

pretty good program. They want to see Medicare expanded to provide a prescription drug benefit; they don’t want to see it weakened 

or privatized. And so I am concerned that we are not going to get 

the kinds of debate and the kinds of openness that this deserves. 

Mr. LINDER. Would you be so generous as to consider that Mr. 

Thomas might have said it should be the end of Medicare without 

prescription drugs, as he knows it? 

Mr. MCGOVERN. I am reading the quote. And to be honest with 

you, listening to some of Mr. Thomas’ previous statements on Medicare, I assume the worst intentions with regard to protecting and 

preserving the program. 

Mr. LINDER. This is the end of Medicare as he knows it because 

Medicare, as we have known it, had no prescription drug. 

Mr. MCGOVERN. I would like to see Medicare have a prescription 

drug benefit that is real, that remains real, that doesn’t get undercut, as your bill goes into effect. 

I yield. 

Mr. BROWN. I find Mr. Thomas’ comments and the resultant spin 

from his ideological soul mates, sort of metaphorically similar to 

Newt Gingrich’s ‘‘wither on the vine.’’ As soon as he said it, he 

knew that he shouldn’t. Republicans responded in ways that it had 

something to do with HCFA and all of that. 

Mr. LINDER. Would the gentleman yield? 

Mr. BROWN. It is his time. Sure. 

45

Mr. MCGOVERN. Let me answer his question. I didn’t yield. 

Mr. BROWN. I am certainly willing to enter into a dialogue with 

Mr. Linder about it. I just found that it is—I will answer it this 

way. 

I heard Mr. Hastings’ comments about Medicare, saying this and 

then correcting himself. Well, the real answer there is not that it 

passed, not that 74 Republicans voted for final passage and 73 

voted against, with two abstentions—which is what happened. The 

real history and the real vote, as we know on motions to recommit, 

is that only 11 Republicans in the House voted for the creation of 

Medicare during the motion to recommit, the important vote. The 

other 60-some were doing what people always do here in final passage when they get politically jittery. 

What actually always happened was, all mainstream Republican 

leaders opposed the creation of Medicare. Gerald Ford, later to be 

minority leader, John Rhodes, Bob Dole, Strom Thurmond, and my 

favorite, Donald Rumsfeld, all opposed the creation of Medicare in 

1965. 

So your party has a history of opposition to this program, and 

not just the far right of your party, but the mainstream of your 

party, from what happened in 1965 to Speaker Gingrich’s tax cuts 

and Medicare cuts, the crown jewel of the Contract with America, 

to Bill Thomas, to Bob Dole saying—bragging to a conservative lobbyist in 1995 that he was there fighting the fight against Medicare, 

proudly doing it, to Newt Gingrich’s ‘‘wither on the vine,’’ to Dick 

Armey saying something along the lines of ‘‘a civilized society 

wouldn’t have a program like Medicare,’’ to all of Bill Thomas’ line. 

This is a family tree of opposition to and hostility to this program 

that has served the great majority of Americas seniors very well. 

Mr. LINDER. Well, the comment would be interesting if it were 

true. 

Mr. Chris Jackson did a special on CNN that played the entire 

Newt Gingrich line. It wasn’t what the unions put on TV. He said 

giving seniors choices, giving them the opportunities to choose in 

a system, the Health Care Financing Administration ‘‘would wither 

on the vine.’’ He didn’t say the Soviet-style system we now have 

would go away; as soon as we choose, consumers would come back. 

Mr. BROWN. Did he say ‘‘Soviet-style system’’ in that statement? 

So you saw the whole program, but he didn’t say ‘‘Soviet-style,’’ but 

meant Soviet style? 

What Mr. McGovern—what he said was, HCFA would wither on 

the wine, not Medicare. And CNN exposed that lie in prime time. 

Mr. MCGOVERN. I yield. 

Mr. FROST. Just to set the record straight, I believe it was Mr. 

Linder who called it a Soviet-type system. 

Mr. LINDER. I did. 

Mr. SANDLIN. Well, certainly the quote did say, Social Security 

would wither on the vine. I have read that quote specifically. I 

know exactly what it said. 

But I think that is exactly right. It will wither because with legislation such as this, you are making HMOs on parity with Medicare. And if the funding goes down, we will begin to say that the 

government can’t afford Medicare, and all of the people will be 

pushed into HMOs. 

46

And this is particularly important in rural America, where I live 

and as—Mr. Frost referred to this a moment ago. In Texas alone, 

from 1999 to 2001, 330,000 people were dropped by HMOs, and 80 

percent of the people in rural areas that are Medicare-eligible live 

in areas that are not served by HMOs. And you can just bet your 

boots that when this goes into effect and moves forward, soon there 

will be no Medicare, it will wither on the vine, as Mr. Gingrich predicted. 

And recently—the one that you left out, Senator Santorum said 

something that can’t be interpreted in any way. He said, ‘‘We 

should phase out traditional Medicare.’’ 

That is the goal of this legislation, and if that is what you want 

to do, that is what this does. 

Mr. MCGOVERN. I take it the answer to—Mr. Linder and others 

in the Republican Party have said enough to cause us heartburn, 

those of us who think that Medicare is an important program. I 

think it makes the case why we should do this thoughtfully and not 

rush through this. But at a minimum—since we are not going to 

do this in anything short of rushing it to the floor, at a minimum, 

we should have everybody’s amendments and everybody’s substitutes be made in order. So I support you in that regard. 

Thank you Mr. Chairman. 

The CHAIRMAN. Thank you. 

Let me just say that when Mr. Frost submitted the statement 

into the record, he wanted to ask some questions. So please proceed. 

Mr. FROST. I just have a question, if either one of you can answer 

this. 

The bill, the majority’s bill, contains a means-testing provision 

where seniors with annual income higher than $60,000 have to pay 

more money out of pocket before they qualify for catastrophic drug 

coverage. 

Now, there are some basic privacy issues related here. How are 

they going to get that information? What is going to happen? Is 

there going to be contact between the IRS and Health and Human 

Services? What happens to seniors? 

Mr. SANDLIN. That is my understanding, that information will be 

transferred and shared between the IRS and the provider and the 

insurance companies, and certainly will have serious constitutional 

issues and privacy issues as this information is disseminated across 

America by the seniors. 

If you are making $60,000 a year, you would have a coverage gap 

rising up to about $11,200. You are paying for a premium and not 

really getting any benefit. 

Mr. BROWN. I would add that—I mean, this sounds eerily like 

some kind of class warfare waged by the Republicans. But I 

would—I am concerned about that kind of proposal, because it really does undercut and actually fracture the universal coverage system that we know as Medicare. And if it is 60,000 today, then as 

the Republicans continue their assault on Medicare, to privatize it, 

it becomes 50, 40, to the point that Medicare, public Medicare, public fee-for-service Medicare, becomes a welfare program, and where 

the sickest and the oldest and the poorest find themselves; and for 

47

more affluent—Members of Congress and others—we end up in private plans. And that should concern all of us of any income level. 

Mr. FROST. That is my only question. 

The CHAIRMAN. Thank you, Mr. Frost. 

Ms. Pryce. 

Ms. PRYCE. No. 

Mr. DIAZ-BALART. No questions. Thank you. 

Mr. HASTINGS of Florida. Mr. Chairman, I thank both of the witnesses. In the interest of time, I will reserve my comments. 

Mr. HASTINGS of Washington. No questions. 

Mr. SESSIONS. Thank you. 

Mr. BROWN. Mr. Chairman, if I could, I won’t keep the committee 

long. I have four other amendments that I will just submit and ask 

for support. 

The CHAIRMAN. Thank you very much. We appreciate that. They 

will appear in the record. 

[The information follows:]

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The CHAIRMAN. Our next witness is the gentleman from Indiana, 

Mr. Buyer. Please come forward. And without objection, your prepared statement will appear in the record and we welcome a summary. Thank you very much for your forbearance. 

STATEMENT OF HON. STEVE BUYER, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF INDIANA 

Mr. BUYER. Thank you, Mr. Chairman, Mr. Frost, members of 

the committee. 

About 5 months ago there were five senior members of the House 

Energy and Commerce Committee that came together because we 

had very strong policy concerns; and it was really led by Richard 

Burr, John Shadegg, Charlie Norwood, Joe Barton and myself. We 

tried to think outside of the box. 

We are here representing just the four of us, excepting out Joe 

Barton, so I am representing Richard Burr, John Shadegg, Charlie 

Norwood and myself—are asking that our drug value card be a 

substitute to Title I along with the catastrophic coverage. 

And if I could ask the Rules Committee to indulge me for just 

a second—because this was a 5-month product outside of the committee, the work product, and it was a very serious level of effort—

what we had hoped to do here was, how do we extend the drug 

benefit to the traditional fee-for-service Medicare and, at the same 

time, keep employers in the game? How do we make sure that they 

hold the fidelity of the commitments to their employees and retirees and, at the same time, keep the best minds in America continuing to press the bounds of science for the benefit of America? 

We came up with a value drug card. We permit any organization 

that is eligible to offer a CMS-approved drug card—it can be AARP 

or employers or pharmacists organizations, pharmacy benefit managers, drug wholesalers—you name it. If it is approved by CMS, 

they can come up with their formularies and offer a drug card, and 

have the purchasing power and have those drug savings; a senior 

can expect 15 to 35 percent savings on their drug value cards. 

A senior could only select one value card. Seniors would pay an 

annual $30 dollar enrollment fee. Everyone is in, and you have to 

opt out. 

We also, though—when you have this drug account, you have 

this value card that comes with a drug account; and what we do 

is, we say this is a defined contribution so the government knows 

exactly what is going to go on that account. 

So from zero to 100 percent of poverty, the government would 

put down $2,500; from 100 to 125, they put in $1,500; from 126 to 

175, they put down $1,100; From 176 to 250 percent poverty, you 

put $600; from 251 to 350, you put $300; anyone above 351 percent, 

it is $100. So there is a defined contribution, so we know, as a government, exactly what we are putting into the program. 

At the same time, we create a tax deductible opportunity that individuals can put up to $5,000 into that drug account. And very 

often, we like to say, parents take an active role in the lives of your 

children. Now, what we should also be saying is, children take an 

active role in the lives of your parents. 

What is happening in society, I think is shameful. Children are 

so anxious to get hold of an inheritance that they spend down the 

53

assets to get mom and dad Medicaid-eligible and throw them in a 

nursing home. That is not right. 

We have become family friendly here, and we want the children 

to be able to get a tax deduction to put money on the value drug 

card. We also then say to employers, you can make a contribution 

into that card. 

And then with regard to the catastrophic benefit, all beneficiaries that select a drug value card are required to purchase a $10,000 

private catastrophic coverage to avoid risk selection. And to encourage participation, the Federal Government will pay 100 percent of 

the premiums for those up to 175 percent of the Federal poverty 

level, and then there is a sliding scale percentage of the premium 

from 176 to 250. 

And I won’t go into it further, but what I want you to know, Mr. 

Chairman and the committee, this was a very serious level of effort. What happened in the Commerce Committee was, we negotiated with the chairman, and it ended up being a transition, and 

then a fall-back piece; then it got scored pretty high. And so it has 

really been scaled down tremendously. 

I wish this could have been a base bill. I would have loved the 

opportunity to take this to the floor. We had introduced it. It is one 

of those tough times.

The CHAIRMAN. Well, thank you very much. We appreciate your 

very hard work on this, and thanks for the presentation. 

Mr. LINDER. What was it scored at? 

Mr. BUYER. This was scored at 385 billion. 

Mr. LINDER. Over 10? 

Mr. BUYER. Over 10. 

Mr. FROST. Interesting. 

I am not sure that I would support it on the floor, but I think 

that you should have the right to offer it. And if no one on your 

side will offer it when we vote on the rule, I will offer your amendment. I doubt that it will be accepted on your side, but you should 

have the opportunity to have a vote. 

Mr. BUYER. Thank you. 

Ms. PRYCE. Thank you. I admire the work that this group did. 

They worked very hard. They have a product that I believe, with 

a little more time and a little bit more vetting, may have made its 

way to the base bill. There was just not enough time to see where 

it would go. 

I just want to say that I don’t think that you should give up on 

it, because I really thought it was very innovative and tremendously ‘‘out of the box’’ in ways of thinking that we have never gotten to. 

So I would just encourage the gentleman not to give up on this. 

Mr. BUYER. Thank you. 

The CHAIRMAN. Mr. McGovern. 

Mr. MCGOVERN. I think that is a polite way of telling you that 

you are not going to have the opportunity to offer your proposal on 

the floor. But I will associate myself with the remarks of my ranking member, Mr. Frost, and say that I probably wouldn’t vote for 

your proposal on the House floor. 

But when he offers your amendment here, I will certainly vote 

for it, to make it in order, because I do think that this issue is imVerDate jul 14 2003 16:56 Oct 30, 2003 Jkt 089585 PO 00000 Frm 00057 Fmt 6633 Sfmt 6602 E:\HR\OC\89585B.XXX 89585B
54

portant enough where everybody should be able to bring their proposals to the floor and debate these proposals up or down and let 

the entire House work its will. 

So I thank the gentleman for being here. I will support his right 

to offer the amendment in this committee. 

The CHAIRMAN. Thank you. 

Mr. Diaz-Balart. 

Mr. DIAZ-BALART. I thank Mr. Buyer for his hard work. 

Mr. HASTINGS of Florida. Mr. Chairman, I just say to Mr. Buyer, 2 years ago I would have voted for it on the floor. But a $1.3 trillion tax cut later, I don’t think that I would, for the reasons that 

I don’t think that the 1.3 trillion was family friendly. And this is 

a measure, I agree with you, that may very well be family friendly. 

I do agree with my colleagues that you should have a right to 

present it. But if we could repeal some of those taxes, we could pay 

for that and a whole bunch of other things; and pay for what Americans want, and that is affordable drug prices. But we can’t do it, 

unfortunately. 

Thank you. 

The CHAIRMAN. Thank you. 

Mr. Hastings. 

Mr. HASTINGS of Washington. Thank you, Mr. Chairman. 

You said that the bill we are considering there is a transition period. As I understand it here, what your concept is doing, the transition is in here? 

Mr. BUYER. There is a very small, minuscule piece of this. 

Mr. HASTINGS of Washington. I recognize that point. 

But I think that that may be a very, very important part of this, 

because my view is that we have had a Medicare system that has 

been in place with very few innovations over the last generation 

and a half, and I think that we ought to be thinking outside of the 

box; and this body sometimes doesn’t want to accept that change 

until we have had a pilot program. 

If I might say, this may be one of those pilot programs that hopefully it will surprise us in a positive way. I congratulate you. 

Mr. BUYER. Mr. Hastings, I will embrace that, along with Mrs. 

Pryce’s recommendations. We have a great staff that also can help 

put this together. That is exactly what we wanted to do, not think 

along the lines of traditional Medicare and say, we will just let the 

government do the program. Or if you have concerns in the private 

sector, will it happen; will there be two competitive plans in a region? What is another way of doing this? 

That is what 5 months of effort brought us. 

Mr. HASTINGS of Washington. Even though this may be miniscule—and I recognize the hard work that you have put in on this, 

but this could be very, very important as we look at this 2 years 

hence. 

Mr. BUYER. What it does do, Mr. Hastings and Mr. Chairman, 

is, if this bill passes and is signed into law, you have that 3-year 

void. Even though I say it is minuscule, you do have an opportunity to cover those individuals who are at that 175 percent below 

poverty, so you are extending to people who really need it, who are 

making the tough choices out there. 

So, for that, I compliment you for your compassion. 

55

Mr. HASTINGS of Washington. Thank you. 

The CHAIRMAN. Thank you. 

Mr. Sessions. 

Mr. SESSIONS. Thank you, Mr. Chairman. I also want to heap 

praise on you, Steve and your colleagues, for the great work that 

you have done. I think I might have started from about the same 

perspective that you did, that is, to see what impediments are in 

the way for people to be able to fully participate and to help themselves, whether it be tax components or other things, rather than 

just taking the whole thing on by the government. 

I think solving the problem through simpler ways can be done, 

and I think that is what you started to do. I think it is a great opportunity, and perhaps can be a model for us to look at. So thank 

you. 

I yield back. 

The CHAIRMAN. Steve, thank you for your hard work. Thank you 

very much for being here. 

Next, from the Energy and Commerce Committee, I would like 

to ask Mr. Pallone, Mr. Strickland and Ms. Capps to come forward. 

Please proceed as you see fit. Thanks to all three of you for your 

patience, and we appreciate your being here. Without objection, 

your prepared remarks will appear in the record. And Mr. Pallone, 

please begin.

STATEMENT OF HON. FRANK PALLONE, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Mr. Chairman and members of the 

committee. I have two amendments, and I will try to summarize 

them together. 

And I guess I would start out by saying that, as my colleague, 

Mr. Brown, from the committee mentioned earlier, what we really 

would like to see is an open rule, and to allow all of these amendments. And certainly the substitute, the substitute that was put 

forward by the leadership of the Ways and Means and the Commerce Committee, that is the most important amendment that we 

would like to see put in order. And my two amendments actually 

are included in that substitute. So if you didn’t allow the substitute, it would not be necessary to include these two amendments. But they go to the heart of the issue in the substitute, and 

I would put it this way. I think—I believe and I think most of my 

Democratic colleagues on the committee believe that Medicare is 

essentially a good program. It is a program that works. It is not 

broken. I know I have heard many, not necessarily you, but other 

people in Republican leadership and others on the floor say that 

Medicare is broken. Medicare needs to be fixed and doesn’t work. 

When I talk to seniors in my district, they all say they like Medicare, and they like the program, but the one thing they don’t like 

is it doesn’t include a prescription drug benefit, and they would like 

it to be added. 

So essentially the Democratic substitute does just that. It keeps 

traditional Medicare—keeps Medicare the way it is, the way it has 

been, but it adds a prescription drug benefit in the same way that 

Part B was added for your doctor bills. In other words, you just add 

the benefit, you have a low premium, and for $25 you have a low 

56

deductible, $100, and you have 80 percent of the costs paid for by 

the Federal Government. And it is all exactly that. In other words, 

it doesn’t change. Those figures are exactly what they are, and they 

don’t vary. So one of my amendments does that. 

Mr. Frost mentioned it before, which is to say that under the 

plan, even the Republican plan, those things must be fixed. There 

must be a set deductible, either 250 or 275; there must be a set 

catastrophic; and also there should be a set premium. And I think 

if you vary from that, you make it very difficult for the seniors to 

make real choices. I think many of you have talked about choice, 

but, I mean, the bottom line is there can be choice in terms of services and competition between services, but I think if you don’t set 

a standard benefit and say this is what the premium is going to 

be, this is what the catastrophic is going to be, this is what the deductible is going to be, it just makes it that much more difficult for 

seniors to make choices and understand what they are getting. 

So that is one amendment. One amendment would simply define 

the benefit and say that those figures have to be what the Republicans have been advertising. You have been saying $35; you have 

been saying 250, 275. You have been saying a specific amount for 

catastrophic. It shouldn’t vary. That is one amendment. 

The other amendment deals with the issue of negotiated price. 

And I maintain that if you don’t put some language in the bill, regardless of the Republican or Democratic bill, that allows the Secretary or the Administrator of the Medicare programs to negotiate 

price and bring prices down, we will never be able to afford a prescription drug benefit that you are now applauding and advocating. 

The reason why the Republican bill has a huge doughnut hole and 

the reason it has so many problems is because you are trying to 

fit it within a certain budget amount, which is the $400 billion, and 

you are not using the price or negotiating the price as a way of 

bringing the cost down. And I think what you will find over the 

next few years if you don’t allow the Secretary or the Administrator to negotiate the price, you will simply not be able to afford 

the program. It will go way beyond the $400 billion that you are 

proposing. 

And so my second amendment would simply say that the Secretary or the Administrator has the authority to negotiate price to 

reduce the costs, and it makes sense. You have the same thing in 

the veterans program. You have the same thing in the military. 

And we are saying now the Secretary is going to have 400—40 million seniors in the country, and he has real opportunity to negotiate price and bring prices down and save for the program. Instead 

you go to the exact opposite. In the House Republican bill, you actually have a noninterference clause that says the Secretary or the 

Administrator cannot negotiate price and cannot actually interfere 

in the process in that way. I think that is a huge mistake. I don’t 

know if you have it there for ideological reasons or you have it 

there because that is what the drug companies want, but I think 

in the long run it is going to be impossible for you to deliver on 

the very benefit that you are promising. 

So I ask that you adopt those two amendments, but, more important, I ask that you allow the full House to consider the substitute, 

the Democratic substitute, because that would include my two 

57

amendments and would allow for a real debate on the issue of what 

kind of benefit we would be providing. 

Mr. LINDER [presiding]. Mr. Strickland. 

STATEMENT OF HON. TED STRICKLAND, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF OHIO 

Mr. STRICKLAND. Mr. Chairman, I am offering a common-sense 

amendment. My amendment is based on the idea that all seniors, 

regardless of where they live, should pay the same premium to participate in Medicare prescription drug benefit; and moreover, that 

all seniors should have a reasonably good idea every year of what 

they are going to owe each month for their prescription drug plan. 

Now, I know that some of my colleagues claim that seniors under the Republican bill will pay about $35 monthly premium for a prescription drug benefit created by this bill, but there is nothing in 

the text, as Ms. Slaughter was able to elicit from our colleagues 

from the Ways and Means and Commerce earlier, there is nothing 

in the text of the bill that indicates what the premium will be. It 

does not require a $35 premium. In fact, the bill does not even contain a range of premiums that would be acceptable under this bill. 

Therefore, my amendment would just simply ensure that all seniors are charged a $35-a-month premium for their Medicare drug 

benefit regardless of where they live. The $35-a-month premium 

would then be indexed each year, just like the rest of Medicare is 

indexed. 

This amendment, I believe, is essential to the constituents who 

live in a district like mine. My district stretches for 330 miles along 

the Ohio River. If the plan before us today were to be passed into 

law, it is likely that the seniors living in the more densely populated northern part of my district would have access to a drug benefit that could vary widely in terms of the premium from the seniors who live in my more rural southern counties. Since plans will 

have to be paid more to induce their participation in rural areas, 

premiums in these rural areas will likely be higher. 

And then the Commerce Committee, I asked the counsel what 

guarantee there would be that a plan would even be there, a drugonly plan or an HMO plan would be there for seniors in rural 

areas. There is no guarantee that such a plan will be there. My district borders Pennsylvania, West Virginia, Kentucky. It is likely 

that seniors in those States will have access to prescription drugs 

at very different monthly rates. These disparities in costs will create disparities in access to prescription drugs, which is exactly the 

problem that this bill purports to solve. And since Medicare+Choice 

plans, as has been noted many times here this evening, move in 

and out, that they moved out of my area, 6 of my 12 counties have 

no access to Medicare+Choice now. They were there, and they left, 

and seniors were left in the lurch. So seniors know all too well 

what happens when a plan decides to pull out. 

If it is true, as many of you say, that the average monthly pre- mium under this bill will be $35, then it only seems reasonable 

that we would put it in the bill so that seniors can have predictability, they can know how much this is going to cost them from 

year to year, and it will be indexed, and that is a reasonable thing 

to do. 

58

So I just urge you to accept this amendment. I think it is the 

only way that we can give seniors any kind of competence that 

their premium will be $35 rather than $85, as it was in Nevada, 

or even higher. So I ask you to consider the amendment and to rule 

on it in a positive manner. 

Mr. LINDER. Mrs. Capps. 

Mrs. CAPPS. Thank you, Mr. Chairman, for allowing me to make 

this presentation. 

Mr. LINDER. Only 3 o’clock in the morning.

STATEMENT OF HON. LOIS CAPPS, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF CALIFORNIA 

Mrs. CAPPS. I have two amendments, and because of the emergency nature of this hearing, I will be as brief as I can be. The first 

is I think it is titled number 001, called the national plan amendment. A better title would be a backup plan. In this amendment, 

Centers for Medicare and Medicaid Services, we know them as 

CMS, would offer standard coverage as a prescription drug plan 

throughout the United States as a backup plan. The coverage that 

would be offered would be the benefit outlined in the Majority bill. 

So there would be no difference, but it would make sure that in the 

event that the insurance plans did not stay in a particular area 

that traditionally has been underserved, a senior would know that 

there would be this fall-back plan that would give them the same 

benefits that would only be used in reserve. 

I actually think this would really go a long way to help sell, if 

you will, this new Medicare plan, because my experience with seniors, with the only knowledge they have had about insurance companies combined with Medicare, the Medicare+Choice plans, has 

been rather negative because they have seen the plans come in in 

underserved areas like I represent, the rural area. The plans come 

in and offer a lot, and then pretty soon they raise their premiums 

and cut back on the benefits, and then pretty soon they have gone. 

And I have already heard some concern about the idea of having 

the same kind of insurance companies be this partner with Medicare. 

So I am hopeful that you will look seriously at this idea only as 

a reserve plan, but having the senior know that in the event that 

there wasn’t any HMO available in their area, that they wouldn’t 

be left high and dry. That is the first amendment. 

And then the second amendment is one that I am submitting 

called the Norwood-Capps cancer cap amendment, and I think the 

number is 59. The actuality is that the base bill that we went 

through in the commerce energy committee, this base bill threatens 

quality cancer care. It actually cuts cancer care funding by 30 percent, or $500 million. This is because of the way that the average 

wholesale price has been indexed for oncologists. And we need to 

fix this. This is our responsibility as part of how Medicare is financed. We also have to make sure that oncologists are paid properly. 

And so this amendment is based on H.R. 1622, which I have coauthored with Representative Norwood, which this bill has already 

gained strong bipartisan support. This amendment, then, based on 

this bill, offers a more accurate payment for oncology drugs, just 

59

really comes clean with how we have been doing it. But what 

oncologists have been doing since Medicare came into being before 

there really was oncology service in the full sense of the word in 

comprehensive cancer care, oncologists have used the overpayment 

of the drug to pay for the services. 

The CHAIRMAN. Average wholesale price. 

Mrs. CAPPS. Exactly. And that is wrong. We need to fix it. But 

we also need to make sure that cancer care continues to be delivered. And so the amendment would allow for that delivery of services by the oncology community really, nurses and other professionals who deliver the care. 

Oncology treatment is rather severe in many instances and needs 

to have this service to make it work, so I hope these amendments 

will be considered by the Rules Committee. 

Mr. LINDER. Ms. Pryce. 

Ms. PRYCE. Thank you all. 

I am interested in your second amendment. Do you know how it 

differs from the average sales price plus 12 percent that is in the 

base bill? 

Mrs. CAPPS. It has a different formula for doing it. It would reimburse the oncologists for the medication. The way the base bill does 

it, the patients would have to come 2 days in a row because the 

oncologist would have to see the patient, do the blood work and all 

that, and, based on that, order the medications. So they would have 

to make two trips. The base bill would be very costly for the Medicare recipient. 

This bill would allow the oncologists to stockpile, if you will, so 

that they can have the medications on hand, but it would charge 

I think it is 12 percent more, which is a standard rate, than the 

actual wholesale price. It is based on the sales price. 

Ms. PRYCE. The Chairman explained to me that the base bill provision would allow a stockpile, and so that is why I am just concerned, and he worked with Charlie on it. I will try to clear that 

up in my own mind. 

Mrs. CAPPS. In my discussion in Energy and Commerce, it did 

not do that. There has been a lot of work since that happened, and 

if we can improve it, we should. But that is only one of the issues 

that is of concern to us. The wider issue is the lack of ability to 

reimburse for the oncology services. 

Ms. PRYCE. The practice expense. 

Mrs. CAPPS. Which also need to be transparent and need to be 

acknowledged as part of cancer care. 

Ms. PRYCE. It is my understanding it is well tended to in this 

bill, so thank you. 

Mr. LINDER. Mr. Frost. 

Mr. FROST. I support the gentlewoman’s amendment on oncology 

and hope we have the opportunity to vote on it. 

Mr. LINDER. Mr. Hastings. 

Mr. HASTINGS of Washington. No questions. 

Mr. LINDER. Mr. McGovern. 

Mr. MCGOVERN. I support all of your amendments, and, Lois, especially the one on oncology. And I think it raises the issue I think 

that a lot of us are concerned about. No one really knows what has 

been taken care of and what has not. People on the Majority side 

60

can’t tell you definitively that this has been fixed or hasn’t been 

fixed. That is not good enough on something like this. 

Ms. PRYCE. How good would you like it to be? 

Mr. MCGOVERN. I would like definitively. 

Ms. PRYCE. I can tell you what the Chairman said. 

Mr. MCGOVERN. And he said a lot of things in the past, quite 

frankly, that haven’t come true. 

The fact of the matter is all these things affect real people. For 

us to sit up here and say, well, I can assure this, or I think this 

might be, or this might be the case, or that might be the case, it 

is just not good enough. There are a lot of questions, and we are 

rushing this thing through here tonight. Nobody has read this 

thing, and tomorrow it is up on the floor. We are going to have a 

structured rule, limited debate, and people are not going to have 

an opportunity to offer different perspectives. 

This is outrageous, and there is no excuse for it. We are told this 

is an emergency, and we have to be here under emergency situation. The Chairman of the Rules Committee, all he said when it 

was an emergency was that he wanted to do it. That was it. That 

is all we need to do to declare an emergency so we don’t have 24 

hours to review this bill. I mean, that is absurd. This stuff is important. And the only emergency here is they want to rush this 

thing to the floor before anyone reads it, and then they might not 

vote for it. 

Here is a description of how you get your prescription drugs 

under the Republican plan. I don’t know about the senior citizens 

you represent, but my senior citizens are looking for simplicity and 

a guaranteed benefit. They don’t want thousands of bureaucrats 

telling them they can do this, they can’t do that. They want something that is understandable. And clearly this bill that is coming 

through here is anything but simple. It is convoluted and doesn’t 

provide people security, and this whole process just stinks. And I 

can’t—I mean, here we are at 3 o’clock in the morning, and we 

can’t answer some basic questions about what is in this bill and 

what is not, and it is the wrong way to do this. 

Mr. PALLONE. If the gentleman would yield for a moment. I think 

you are very much on point. I have been listening to what the Republicans have been saying tonight in the committee, and essentially almost everyone has said that there is a real problem here 

with Medicare, and we have to fix it. We have to come up with all 

kinds of ways to change it and do different things because the assumption is that there is a huge problem with Medicare, and it is 

simply not true. I think seniors don’t feel that there is a problem. 

Ms. PRYCE. Would the gentleman yield? You don’t think the imminent bankruptcy is a problem? I mean, it is a serious problem. 

If you want it to go bankrupt, then we do nothing, and we have 

done nothing. And if you don’t, we have to fix it. 

Mr. PALLONE. The gentlelady from Ohio, let me just say I respect 

you a lot, and I like you, but the bottom line is that the crisis in 

terms of the funding has been created by the Republicans because 

of their fiscal and tax policies. 

Ms. PRYCE. And we can argue that until the cows come home. 

Mr. MCGOVERN. I would simply say we are jeopardizing Medicare by tax cuts that were not paid for. And I am all for making 

61

sure that we can keep Medicare alive and well, but privatizing 

Medicare is not the way to do it. But I support your amendments, 

and we are going to try to make them in order. 

Mr. LINDER. Mr. Sessions. 

Mr. SESSIONS. I have no questions. 

Mr. LINDER. Mr. Hastings. 

Mr. HASTINGS of Florida. I support all three of the very thoughtful proposals, Mrs. Capps’ and our colleagues’, and support the 

statements that Mr. McGovern said. Four o’clock, I am going to say 

my statement more vigorously. 

Mr. LINDER. Mr. Reynolds. 

Mr. REYNOLDS. No questions. 

Mr. LINDER. I would like to call to the table Mr. Gutknecht and 

Ms. Kaptur. Welcome to the Rules Committee at the delightful 

hour of 3:10. Ms. Kaptur, any statement you might have will be 

submitted to the record.

STATEMENT OF HON. MARCY KAPTUR, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF OHIO 

Ms. KAPTUR. Thank you, Mr. Chairman, very much. I will summarize in view of the time. I thank you, and I thank Mr. Frost and 

all of the Members here. I know it is not your choice to be here 

so late. I feel sorry for all of you and feel sorry for us, and I know 

I am going to feel sorry for the American people after tomorrow. 

But I am here tonight to try to make this bill better, from what 

I know of the bill, and I am heartened in my appearance this 

evening by Claude Pepper looking over our shoulders. I can remember as a new Member here in March of 1983 him giving one of the 

most magnificent speeches I have ever heard as we refinanced the 

Social Security System, which has now served us another 23 years, 

and kept millions and millions and millions of American families 

whole, and given their parents and grandparents dignity in their 

last years, and it was one of the finest votes I have ever cast. 

We have a very important vote in front of us likely tomorrow, 

maybe Friday. I am not sure. And the amendment that I am proposing here would try to deal with the issue that Ms. Pryce talked 

about, and that is the cost of prescription drugs. And my amendment essentially would provide the authority to the Secretary of 

Health and Human Services to provide for the negotiation of prices 

of covered outpatient drugs under prescription plans and what are 

termed MAEFFS prescription plans in the same manner as the 

Secretary of Veterans Affairs provides for the negotiation of prices 

of prescription drugs in conjunction with the procurement of those 

drugs. 

Remember back after 9/11 when Secretary Thompson did such a 

good job of negotiating price on the procurement of immunizations 

for smallpox, and it was pretty tough, but he did it, and he got a 

better price for America. And all we are asking for here is that 

same type of rigor. The idea of our amendment is for getting the 

best competitive bid for a given drug. For example, if any of us 

were to go out to a pharmacy out there today and try to buy a commonly used drug for high blood pressure, I will just use one name, 

Norvast, it is likely we would pay about $134.99. The Department 

of Veterans Affairs has negotiated a price of $102.11 cents. That 

62

is a $32.88 difference, and that is not only a difference for any one 

of us, but for the senior citizen, who can save $32. That is a very 

significant savings. In many cases, the Department of Veterans Affairs has a lot better pricing than even under the Canadian system; 

not always, but many, many times. The same is true with the Department of Defense. 

This amendment, in sum, would essentially replace section—I 

want to give you the exact number here—1809(c)(1), and would add 

this—would add this section as a replacement. 

Let me just say that if you think about our country and our free 

enterprise system, the idea of competitive bidding is really essential to getting the best price. That is how you really determine 

price in the market. And we also know that insurance plans—one 

of the Members was talking about, having sold insurance, if one 

looks at the whole concept of insurance pricing, and they could 

group people in order to get the best price, this is the same concept 

obviously in the acquisition of prescription drugs. It is the same 

that we do with bulk buying. Whether you are buying milk for children in schools, or whether you are buying widgets for automotive 

manufacturing, bulk buying makes sense. 

And so we just ask the committee’s indulgence to offer this 

amendment tomorrow or Friday, whatever the day is. And let me 

just say that as I speak here tonight, I can think of lots of people 

over my years in Congress that have come to me, but one in particular. A man came up to me in Columbus, Ohio, recently, terminated worker out of a major manufacturing company. He had big 

tattoos on both arms. I said, sir, are you a marine? Yeah; 58 years 

old, 281⁄2 years at that company that closed its doors. But his—he was there because of his wife, whose drugs were costing $1,800 a 

month, and I really couldn’t help him. 

And so I know the extraordinary importance of this measure that 

we will be debating, but I also know that with this amendment, we 

would get the best price, better than the market would offer by 

itself, because a group buying provision always saves money. So I 

would ask the committee’s indulgence, and I would hope that you 

would find a way to allow this amendment to be put in order and 

let us debate it on the merits and find the best answer for the 

American people. Thank you very much. 

Thanks, Claude. I love you. 

Mr. LINDER. Mr. Gutknecht. 

STATEMENT OF HON. GIL GUTKNECHT, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF MINNESOTA 

Mr. GUTKNECHT. Well, Mr. Chairman, it is late, and I will try to 

be brief, but the issues before us are big, and the questions that 

you have raised and others have raised with regard to what the ultimate cost of this provision is going to be, this bill, are serious 

matters, and we ought to consider them for a while. 

We asked what the Congressional Budget Office estimates the costs are going to be, and it is somewhere between $390 and $400 

billion over the next 10 years. But, Members, I would at least caution you that the Congressional Budget Office has been wrong far 

more often than they have been right, even in estimating their own 

budget. They have been off by $1 trillion in their estimates. Now, 

63

that is not a small amount, and my estimate is that they are off 

in the estimates of the cost of this bill. 

The reason I say that—and I am not by any means an expert, 

but I have spent a good part of the last 4 years learning about the 

prescription drug industry and the way prices are set, and it is the 

most confusing thing I have ever seen. With all due respect to my 

colleague from Ohio, the idea that we will be able to negotiate better prices is not exactly true, and let me give you an example, and 

this is from the Office of Personnel Management. The prices that 

they are able to negotiate on behalf of the Federal Employees 

Health Benefit Plan, let me give you some of the prices very quickly. For a drug like Coumadin, the BlueCross BlueShield Federal 

Employees Plan’s price is $55.31; for the mailhandlers’ plan, which 

is a fairly large group, is $72.24; for the HMO plan that you can 

participate in here in Washington, it is $69.58. That same drug can 

be bought in Europe for $15.80. That story gets repeated again and 

again. 

Now, in some respects I probably should be doing a victory dance 

because they did put a provision in here which supposedly will 

open up the market to Canada, but there are two, as was alluded 

by Ms. Slaughter—there are poison pills that are included in that 

provision. Let me read them for you. The conditions are that, number one, that this pose no additional risk to the public health and 

safety; and, number two, that they result in a significant reduction 

to the cost of prescription drugs to American consumers. I am not 

sure what ‘‘significant’’ is. Is it half? And more importantly, who 

will determine that? 

And so we have crafted an amendment on a bipartisan basis that 

would, first of all, put in place a regimen to require the Secretary 

to begin to do what the Congress has said repeatedly we want 

done, and that is to open up markets so Americans can have access 

to prescription drugs from the industrialized countries. We are not 

talking about Mexico or developing countries. We are only talking 

about the industrialized countries. I think that makes sense. 

The second thing that is in the amendment that will be before 

you, and hope we get a chance to vote on it, is a provision from 

Congresswoman Emerson that is identical to the Senate language 

relative to generic drugs. We simply have to stop the pharmaceutical industry from gaming the system. 

And the third provision, perhaps Congressman Engle can speak 

about in terms of getting some kind of rate of return from the enormous amount of taxpayers’ dollars that we invest for research. 

Mr. LINDER. Mr. Emanuel.

STATEMENT OF HON. RAHM EMANUEL, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF ILLINOIS 

Mr. EMANUEL. Thank you very much. Good morning. 

The basic point of this bill was to use market forces to reduce 

prices, whether that is generic versus name brand; access here in 

America versus the same prices that our German consumers are 

paying, England’s consumers are paying, French, Italian, New Zealand and Israel; using that market to drive prices down. 

And the third component of this is that through our NIH funding, taxpayer-based funding, we are funding, all the cancer drug 

64

products and cancer drugs on the market are developed with taxpayer-based dollars. All the AIDS drugs are developed with taxpayer-based research. 

And in the private sector usually you look for a 30 percent return 

on investment. We are talking about 10 percent return here for the 

taxpayer dollars. And that would give basically—the truth is the 

NIH is one of the—it would return money to the taxpayers for the 

research they have been funding. And basically over 10 years, the 

NIH becomes self-funded. 

So it uses the market principles, whether it is name brand 

versus generic, and access here in the United States, competitive 

prices around Europe, and also making the NIH what it really is. 

And it doesn’t demand prices, doesn’t command prices; it uses market forces to reduce prices. 

And everybody, regardless of where you live or where you are 

from, knows that one of the debates here is about affordability. I 

believe in the free market. I have seen it work, and this bill in a 

bipartisan fashion uses the market forces to bring prices down. 

Mr. LINDER. Thank you. 

Ms. Kaptur, before you go much further in touting the value of the smallpox negotiations, I would like to inform you that the $13 

per liter of immunoglobin that was negotiated is now $265 per 

liter. 

Ms. KAPTUR. Could I say, because Mr. Gutknecht commented on 

my proposal, I didn’t comment on their proposal, if I could just respond that the operative provision of our measure is the Department of Veterans Affairs. 

I referenced the Secretary’s negotiation, which received very good 

press. I wasn’t aware of that. 

Mr. LINDER. This was recently. 

Ms. KAPTUR. And also Mr. Gutknecht and Mr. Emanuel’s bill 

does not have the Department of Veterans Affairs regimen on here, 

and I think it has good experience, and maybe Secretary Thompson 

could use it. 

Mr. HASTINGS of Washington. No questions. 

Mr. FROST. No questions. 

Mr. LINDER. Mr. Sessions. 

Mr. SESSIONS. No questions. 

The CHAIRMAN [presiding]. Mr. McGovern. 

Mr. MCGOVERN. I support your amendments, and I think they 

are very thoughtful, because the issue of affordability is key to 

many people. That is the big issue. I mean, we could talk about a 

benefit or a subsidy that we are going to provide to people, but if 

the cost of drugs go up, then what are we doing here? 

So I think all of you maybe have different approaches to this, but 

clearly they deserve to be debated on the House floor. And again, 

I appreciate your thoughtfulness here. 

Mr. GUTKNECHT. Mr. Chairman, if I could say this issue is not 

going to go away. If 1 year from now our consumers are still paying 

$360 for tamoxifen, and the Europeans are buying it for $60, it is 

not going to be shame on the pharmaceutical industry, it will be 

shame on us. 

Mr. MCGOVERN. What do you think is the reluctance of the administration to embrace your proposal? 

65

Mr. GUTKNECHT. You would have to bring them in. 

The CHAIRMAN. Mr. Reynolds. 

Mr. REYNOLDS. No questions. 

The CHAIRMAN. Mr. Hastings. 

Mr. HASTINGS of Florida. Thank you, Mr. Chairman. 

You know, this bill specifically prohibits the Secretary of Health 

and Human Services from negotiating cheaper prices for prescription drugs, and I don’t know how that helps the people Medicare 

is designed to serve. For the life of me, I don’t. And I don’t know 

Secretary Thompson, who happens to be the Secretary at this time. 

But I had the good fortune of being at the Ambassador of the 

United States to Italy’s dinner that I was invited to by Mel and 

Betty Sembler, who are Republicans, and big heavy-hitters, and 

Tommy Thompson was there, and he made a speech that night. 

And he had just come from America, and he was talking about the 

fact that he had knocked heads with drug companies trying to get 

them to lower prices. So apparently this present Secretary isn’t 

hesitant at all to undertake to do something. 

And, Ms. Kaptur, perhaps you can answer it best. I support all 

three of your very thoughtful amendments. To prove I don’t have 

a life, I have been up at night listening to Mr. Gutknecht talk 

about this in Special Orders. I know very well what it is like, but 

how is it going to help people that the Secretary is prohibited from 

negotiating? 

Ms. KAPTUR. I was baffled to read that provision in the original 

draft that came out of the committee. I don’t know if it has been 

removed or not, but on the thought that it has not been removed, 

I really don’t understand, because what it essentially does it sets 

up an entitlement for the pharmaceutical companies to charge the 

highest price. There really isn’t any competition in the system 

and—— 

Mr. GUTKNECHT. I agree absolutely, and I wasn’t trying to undercut what Ms. Kaptur was trying to do. It is just that there is a belief among some of our people that we are going to be able to negotiate some of these great prices. My point that I am making with 

the Federal employees plan is we don’t negotiate very good prices 

now relative to the rest of the world. If you are really serious about 

bringing prices down, you have to introduce some level of competition. It is called parallel marketing. And that is why the Europeans 

have cheaper prices. 

Mr. HASTINGS of Florida. Do you have any comments on that? 

Mr. EMANUEL. I just think that if you want to get the $400 billion or whatever it ends up being, if the spread is 5-, you are going 

to get the most bang out of the buck. You bring competition. We 

are not only talking about adding prescription drug benefits to 

Medicare. One of the things we all care about is affordability. We 

are talking about here in our amendment to use the market forces 

to bring to bear, and allows people in the United States who have 

paid many ways for the research for these drugs to get the same 

prices that people in Germany, people in France, people in England, people in Italy or Israel and Canada are paying. 

And using market forces to reduce prices—globalization is supposed to be a benefit. Let us make globalization work for taxpayers, 

government, Medicare, private sector—and a lot of businesses are 

66

drowning by the price of their health care. Of course, that is being 

driven not only by the uninsured, but by the costs of medication. 

I have faith in the private sector, and I hope every Member has 

the same faith that we have in the private sector to bring down—

and in the marketplace to bring down prices. 

Mr. HASTINGS of Florida. The fact of the matter is that this new 

Medicare agency is precluded from using its marketing power. 

And I want to follow up what I said about Secretary Thompson. 

I thought he was very forthcoming on that particular evening and 

was really riding high that he accomplished something. What he 

was talking about is that the VA directly negotiates with drug companies for prescription drugs, and Secretary Thompson negotiated 

with the manufacturer of the antibiotic Cipro and was able to cut 

prices by more than half. Now, if he can do that in that instance, 

I don’t understand why we would pass a measure—and it just happens to be Tommy Thompson. Today it may be somebody, tomorrow 

or some other point in the future, that would have that authority 

that would allow this kind of market power to be negotiated rather 

than all of this talk about markets and competition. I mean, that 

is real power, and to take it away from the Secretary to me is beyond the pale. 

The CHAIRMAN. Thank you very much, Mr. Hastings, and thanks, 

all of you, for being here. We appreciate your testimony. 

Next I would like to call the gentleman from Texas, Dr. Burgess, 

and the gentleman from Georgia, Dr. Gingrey. If the two of you 

would come forward.

STATEMENT OF HON. MICHAEL BURGESS, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF TEXAS 

Mr. BURGESS. Thank you, Mr. Chairman. 

We just heard some discussion about drug affordability affecting 

accessibility for our seniors, and I think we have got to keep first 

and foremost in our minds patients’ safety. 

I actually have two amendments that I would like to discuss this 

evening. The first does deal with affordability of medications. This 

amendment would require the General Accounting Office to conduct a study on foreign prescription drug prices to show how they 

impact the United States consumers. The amendment would also 

require the General Accounting Office to determine if and to what 

extent the United States Trade Representative engages in negotiations with foreign governments to facilitate the elimination of price 

controls under the Trade Promotion Authority Act of 2002. 

With the approval of a multibillion-dollar Medicare entitlement 

that will increase the utilization of prescription drugs, it will be important that our government is able to implement market-based solutions to hold down the cost and to ensure patient safety. In order 

to do so, policymakers must have important information as to the 

extent of foreign price controls that impact the United States consumer market. To complement this data, the study authorized by 

this amendment would also look into the United States Trade Representative efforts in eliminating anti-free-market regulations as 

part of free trade negotiations under the Trade Promotion Authority Act of 2002. 

67

And let me just add, never in my wildest dreams did I ever think 

that I would be up here on the side of the FDA, but after hearing 

the other comments coming from the individuals, it is clear to me 

that we need data in order to make these decisions, and with all 

respect to the gentleman from Minnesota, who has done his own 

data collection, I believe we need data collection done for this body 

and not as independent practitioners. We have an incredible record 

of safety in this country that I do not believe we should sacrifice. 

We do not want drugs for our seniors at any price. I think we do 

need to ascertain where the interference with the free market has 

occurred, and to the extent with other governments that have engaged in predatory practices, I believe that should be corrected. 

The second amendment that I have is largely technical in nature 

and deals with section 409 of the—of at least the bill that I saw 

from the Ways and Means Committee from last week. And this 

amendment, the current bill would allow a nurse practitioner to act 

as an attending physician, perhaps contrary to state medical licensing regulations, to provide Medicare and hospice care. This amendment would not prohibit a nurse practitioner from providing care 

as an attending physician, but would allow them to do so in accordance with State practice guidelines and under the supervision of a 

physician. 

A physician is responsible for managing the health care of patients in all practice settings. Health care services delivered in an 

integrated practice must be within the scope of each practitioner’s 

professional license as defined by State law. In an integrated practice with the nurse practitioner, the physician is responsible for supervising and coordinating care with the appropriate input of a 

nurse practitioner, ensuring the quality of care provided to patients. 

And I understand that it was felt that the language that was 

contained in the original bill did not actually give the nurse practitioner the amount of authority that I assume that it did. I would 

ask that this technical amendment be made to clarify this issue so 

it will be clear and unambiguous for those coming after us. 

The CHAIRMAN. Dr. Gingrey. 

STATEMENT OF HON. PHIL GINGREY, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF GEORGIA 

Mr. GINGREY. Thank you, Mr. Chairman and members of the 

Rules Committee. 

My amendment is—first amendment is in title 5 regarding the 

funding of the hospitals, and this has to do with the market-basket 

issue. The Hospital Market-Basket Index is a measure of inflation 

in the price of items and services hospitals must purchase in order 

to provide care. Like similar measures, such as Consumer Price 

Index or Producer Price Index, a hospital market-basket index 

measures changes in price, not changes in volume. If, for example, 

hospitals use more drugs to keep up with increased patient need, 

the corresponding increase with hospital drug costs would not be 

captured by the Hospital Market-Basket Index. Only changes in 

the base price of drugs would be reflected. The increased use of 

drugs not reflected in the Hospital Market-Based Index would have 

68

to be included in the science and technology or other components 

of the update framework. 

Market basket reductions. The House bill contains approximately $22 billion for target payments for hospitals. However, $12 billion 

in savings from the hospital market basket reductions, the minus 

.4, brings the total net benefit of the hospitals to about $10 billion. 

The Senate bill contains $22 billion in hospital relief and no reductions. Under the Senate bill hospitals will receive the full market 

basket for the foreseeable future. If the House passes legislation including payment reductions, that vote could bring down the value 

of a hospital provision in conference. 

The new prescription drug benefit will keep beneficiaries out of 

the health care system and thus create an overall systemwide cost 

savings; however, as volume decreases, economic trends indicate 

that first service costs will increase. Therefore, Congress should not 

preemptively reduce payments to providers at the same time when 

costs are likely to increase. Providers in general should be allowed 

inflationary adjustments to keep pace with overall rising costs of 

health care. We should not reduce provider payments to pay for 

prescription drugs even before the bill is enacted. Again, the Senate has not had to resort to this. 

Medicare is the largest health care program, making up almost 

50 percent of all hospital payments. Mr. Chairman, in my district, 

this provision would cause my hospitals to lose $2 million. If this 

amendment is accepted, we gain about $14 million, this bill, this 

$400 billion prescription bill that we are going to provide for our 

seniors, and I think that is a wonderful thing. And I think that in 

the final analysis that this $400 billion cost estimate will save us 

money, because I think basically what is going to happen is that 

when people have an opportunity to take needed prescription medications for blood pressure or diabetes or whatever, you are going 

to have less expenditures on hospital care. You are going to have 

less hospital admissions, fewer hospital admissions, shorter lengths 

of stay, hopefully, because you are going to reduce the number of 

heart attacks and stroke. You are going to have less admissions to 

skilled nursing homes and extended periods of stay. 

Basically what this provision is going to do, it is going to create 

a benefit for our seniors that they never had before, and I think 

that is great, but it is going to cut down on the volume that hospitals are seeing today. It is just like if you cut down on the number of admissions to a hotel chain and the length of stay there, it 

is going to cost them a lot of money. I think from the standpoint 

of hospitals, they are going to have to take that hit. But also at 

the same time reduce this market basket below 100 percent is hitting them with a double whammy, and I don’t think it is right, and 

they can’t afford that, and I know the hospitals can’t afford it. 

The CHAIRMAN. Thanks to both of you. 

Mr. Linder. 

Mr. LINDER. I would like to ask unanimous consent to submit the 

statement of Dr. Weldon, a physician in the House, who has an 

amendment. 

The CHAIRMAN. Without objection, Dr. Weldon’s statement will 

appear in the record. 

[The prepared statement of Mr. Weldon follows:]

69

PREPARED STATEMENT OF HON. DAVE WELDON, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF FLORIDA

Mr. Chairman, I, along with my colleagues Rep. Sessions (TX), Rep. Fletcher, 

M.D. (KY), Rep. Burgess, M.D. (TX), Rep. Gingrey, M.D. (GA) who have joined me 

in offering this amendment, strongly urge the Rules Committee to either strike Section 942(d) from the Medicare bills reported out by the Ways & Means and Energy 

& Commerce Committees or allow me to offer an amendment to strike this provision 

from the bill when it is brought before the House for consideration. We know what 

an onerous burden this would mean to every physician involved in private practice 

across this country. 

Mr. Chairman, my amendment (numbered WELDON.001) strikes section 942(d) 

of the bill. Section 942(d) would allow the Secretary of HHS to bypass the requirement that the Secretary receive a report from the National Committee on Vital 

Health Statistics (NCVHS) prior to considering whether to adopt a new, untested 

coding/billing system (ICD–10) for physicians. The amendment would simply allow 

the NCVHS to report, so that the Secretary has the full information prior to making 

a decision regarding ICD–10. 

In 2002, the House of Representatives passed legislation to provide physicians and 

other providers with regulatory relief by a vote of 409–0. Just before marking-up 

a similar bill this year—H.R. 810, ‘‘Medicare Regulatory and Contractor Reform Act 

of 2003’’, a new provision was slipped in concerning the coding system ICD–10 

(International Classification of Diseases, 10th Revision). This provision would allow 

the Secretary of HHS to adopt ICD–10 without receiving a recommendation from 

the National Committee on Vital Health Statistics (NCVHS). 

Now this problematic provision has been inserted into the prescription drug legislation, H.R. 2457/2473, ‘‘Medicare Prescription Drug Modernization Act of 2003.’’ 

This language is so onerous that it has divided the coalition which once strongly 

supported the regulatory relief legislation, H.R. 810. Though slightly different, both 

the Ways and Means version and the Energy and Commerce version of section 

942(d) present substantial problems for virtually all physicians, providers, and payers (private, state, and federal). 

ICD–10 Provisions Increase the Regulatory Burden on Health Care Providers—

Section 942(d) undercuts one of the underlying purposes of Medicare modernization 

by increasing the regulatory burden that the Centers for Medicare and Medicaid 

Services (CMS) imposes on physicians and other providers. In part, the regulatory 

relief legislation was intended to reduce the unnecessary burdens associated with 

the Medicare program—not exacerbate them. 

The ICD–10 provision would dramatically increase the administrative hassles associated with coding for physicians, providers, contractors, payors, and the federal 

government. Every physician will be forced to master 170,000 new procedure codes 

and a foreign vocabulary. 

Rushing to ICD–10 is a Government Takeover of a Private Sector Process—Rushing swiftly to ICD–10 amounts to a government takeover of a now private process. 

CPT, the coding system all physicians now use, is developed and maintained by private sector experts and a representative from CMS. Led by the American Medical 

Association (AMA), CPT is managed by a multi-specialty, cross-disciplinary editorial 

panel that provides CPT at no cost to the federal government. 

The challenge of moving to ICD–10 in lieu of CPT will require significant government efforts to develop and maintain the code set itself, replacing a successful private sector partnership that costs the government nothing. 

The Cost of Moving to ICD–10 Could Be Significant to Government and Private 

Sector—A Coopers and Lybrand 1989 cost analysis of the costs for a newly developed code set and its implementation in 1997 dollars approached one billion dollars. 

CBO did not score section 942(d), because the Secretary ‘‘may’’ implement ICD–10. 

The direct and indirect costs of implementing ICD–10 should not be underestimated. It is vastly different in terms of design, intent, structure, and maintenance. 

Setting up this structure will require significant investments to convert existing 

software or acquire new hardware to complete billing and medical records, including 

training and hiring more sophisticated staff coders. Not unlike the ripple effects of 

new HIPPA regulations, the complete reorganization of a physician’s office to comply 

with this rule would be required. 

ICD–10 Was Not Designed for Physician Office Use In Mind–ICD–10 is an entirely new system to impose on American medicine and would come at great expense 

to the private sector and the government. The current ICD–10 system has no billing 

codes for physician office visits, which account for 30% of physician services. The 

language would impose a new lexicon on physicians, because it does not conform to 

traditionally named body systems and instead adopts clinically meaningless distincVerDate jul 14 2003 16:56 Oct 30, 2003 Jkt 089585 PO 00000 Frm 00073 Fmt 6633 Sfmt 6621 E:\HR\OC\89585B.XXX 89585B
70

tions. Currently named and used medical procedures (i.e., Whipple procedure) will 

instead be replaced with a host of different codes based on clinically meaningless 

distinctions, making the practice of medicine and billing a new, unfamiliar bureaucratic nightmare. While some countries partially use ICD–10 diagnostic codes, no 

country uses the ICD–10 PCS codes that Section 942(d) would allow to be imposed 

on physicians. 

ICD–10 Language Unnecessarily Circumvents an Advisory Body Doing Its Job—

Section 942(d) allows the Secretary of HHS to adopt ICD–10 before receiving a recommendation from its own advisory body. The NCVHS, the statutory public advisory body that provides HHS with recommendations on health data, statistics and 

national health information, is currently considering adoption of ICD–10 as a replacement for ICD–9. 

Before making a decision, NCVHS is awaiting the results of a RAND study measuring the cost and impact of implementing ICD–10 on the inpatient hospital environment. The study will be completed in August 2003. A recommendation based on 

the results of that study is expected by the end of this year. Therefore, rushing action by including the ICD–10 language in the Medicare prescription drug legislation 

is completely unnecessary. 

The Transition to ICD–10 Would Disrupt Payments—The transition would likely 

require a system-wide disruption to revise all resource-based relative value scale 

(RBRVS) units used in reimbursement methodology, another cost to the government, which will also delay physician payments. 

RBRVS has annual government expenditures of over $59 billion per year and is 

tied inextricably to the coding system for Part B services. Moving from a coding system of fewer than 10,000 codes for physician services to a coding system of more 

than 170,000 codes would result in a massive upheaval in payments to physicians 

and other Part B providers. Further, the potential for inaccurate coding would increase exponentially. With a seventeen-fold increase in the number of codes, more 

inaccurate payments would occur which, in turn, could increase fraud and abuse 

concerns. 

Finally, I would commend to you the attached list of medical specialty organizations representing tens of thousands of physicians across this nation, who are supporting our efforts to have this provision removed from the bill. 

Let’s removed this onerous provision and allow NCVHS to complete the report 

that they were asked to do. Let’s not thwart the process by rejecting the successful 

government-private sector partnership that has worked so well. Let us protect the 

federal government and the private sector from potentially huge costs, and prevent 

a serious disruption in payments to healthcare providers by striking section 942(d), 

the ICD–10 Language. 

[The information follows:]

71


Insert graphic folio 102 89585A.012
72


Insert graphic folio 103 89585A.013
73

The CHAIRMAN. Mr. Frost. 

Mr. FROST. I would like to welcome my colleague from Texas. He 

is a very instructive new Member of this body, and he brings a lot 

of expertise and enthusiasm. 

The CHAIRMAN. Ms. Pryce. 

Ms. PRYCE. Thank the gentlemen. 

Very thoughtful provisions. We have been working with the hospital association, and we have improved the association from where 

it began, and I understand my district is even worse than yours, 

way worse than yours. So I understand where you are coming from. 

The CHAIRMAN. Mr. McGovern. 

Mr. MCGOVERN. I want to thank both Dr. Gingrey and Dr. Burgess for their testimony. I am not sure if I will vote up or down 

on the floor, but I support your right to offer them. 

Dr. Burgess, maybe I am not quite reading correctly, but your 

GAO study, your first amendment you are talking about, it almost 

sounds as if you are kind of trying to figure out a way to get Europeans and the Canadians to raise their drug prices so that our 

prices don’t sound so bad. 

Mr. BURGESS. I believe they should pay their fair share. I believe 

that that cost should be distributed equally across all populations 

that are enjoying the benefits of pharmaceutical advances that we 

have made in this country. I think it is outrageous that we ask our 

poor and our uninsured and our Medicaid seniors to pay the highest cost for prices, thereby subsidizing drug purchases in other 

countries. It is a scandal. 

Mr. MCGOVERN. I agree with you it is a scandal. We are gouging 

our own people, but I think there has to be a way to make sure 

it is affordable for people in this country and other people as well. 

Mr. BURGESS. With all due respect, I honestly don’t care what 

drug prices are in Canada. Canada has a system that is largely dependent upon the largesse of the United States. They would not 

have a medical care system if it were not for us, and the fact that 

we are subsidizing their citizens’ pharmaceutical purchases, I can’t 

understand why we allow that to continue. 

Mr. MCGOVERN. I agree with your frustration in the sense that 

we don’t seem to care much about our own people here and allow 

the gouging to go on here, and these pharmaceutical companies get 

away charging huge amounts. So I was trying to follow what the 

point was, but you have explained. Thank you. 

The CHAIRMAN. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. I thank both of you. 

The CHAIRMAN. Mr. Hastings. 

Mr. HASTINGS of Florida. Mr. Chairman, this is a good example 

of having expertise from persons that have been on the firing line 

while a whole lot of people that had—a lot of people who had responsibility putting this bill together wouldn’t have a clue about 

what Dr. Burgess and what Dr. Gingrey have talked about; might 

have gone to visit somebody in the hospital, but don’t know anything about what they do. I think we should listen to Members who 

have expertise and have been on the firing line like both these gentlemen. I admire them for coming forward in a forthright manner. 

How in the world could we not make in order an amendment that 

does what Dr. Burgess requests? And all of us—although Dr. 

74

Gingrey didn’t say so, but all of us have hospitals in very similar 

situations to what he is talking about, and if there is to be a benefit, then I would hope that all of us would want to make his 

amendment in order. 

So I support them and would make that request that we at the 

very least give them an opportunity to have it voted up or down. 

The CHAIRMAN. Thank you very much, Mr. Hastings. 

Mr. Hastings. 

Mr. HASTINGS of Washington. No questions. 

The CHAIRMAN. Mr. Sessions. 

Mr. SESSIONS. Thank you so much for being here. 

Dr. Gingrey, I think—well, I know that I hope that your words 

of encouragement about the future that you have about the success 

of the prescription drug industry to keep people out of the hospital 

will come true. I believe that more of our seniors should have an 

opportunity to participate long term with these drugs. The bottom 

line is that there will be fewer people then, hopefully, going to the 

hospital, which would be a lessening demand upon us and our system to build hospitals. 

In Dallas, Texas, where I am from, we are virtually at full capacity, and we have problems with getting enough nurses, and it is 

just a huge stress on the system. So I share your enthusiasm for 

this drug plan, robust plan, that will now make this available. And 

I hope that your professional insight, Dr. Burgess, and your comfort with what we are looking at will mature and come forward. 

And I thank you for being here. I support what you are talking 

about also. 

Mr. GINGREY. I appreciate that, Mr. Sessions, and I think that 

is exactly what is going to happen. I truly believe that this prescription drug benefit to our seniors, which they needed for a long 

time, the success of that program is going to result—you know, 

somebody gains, somebody loses. Hospitals are definitely going to 

lose, and that is good. That means that fewer people are going to 

have to be admitted to hospital with very expensive care, long-term 

care. Same thing with nursing homes. Same thing with surgical 

procedures. A lot of my surgeon colleagues are, hopefully, going to 

be doing less open heart procedures. I know well about that because our seniors are going to be on medication to lower cholesterol, to thin their blood, to do things to keep them out of those 

hospitals and those expensive procedures. And bottom line is that 

is going to cost the hospitals a lot of money, and that is why I feel 

like cutting that market-basket index to minus .4 percent is half 

the double whammy. 

And as Mr. Hastings says, it is not just the 11th District of Georgia, it is everybody’s district. And, unfortunately, not all hospitals 

in our district are disproportionate share hospitals. But that is just 

a very small percentage of these small community hospitals that 

are not disproportionate shares. So I think it is very important we 

consider this amendment. 

Mr. BURGESS. Could I just add to Mr. Sessions’ comments? When 

I trained at Parkland Hospital in 1970, breast cancer was entirely 

a surgical illness. In the year 2003, it is becoming more and more 

a medical illness treated with medications, not surgery. The hospitalization part will no longer be necessary. 

75

Mr. FROST. If the gentleman would yield, that is why I believe 

in Ms. Kaptur’s proposal. Oncology is very important. I had a personal experience in my family with this recently, and the followup treatment, the follow-up chemotherapy treatment administered 

by oncologists is really remarkable in terms of the progress that 

has been made. 

Mr. SESSIONS. And that is an exact reason, as Mr. Frost knows 

that cancer strikes many of our families, and the inclusion of that 

in what we are doing—I guess I say it is not only just money, but 

it is also the heart and soul of this country because we care about 

this. And I think that our kindness is to take care of people who 

at times don’t have the ability to get the most leading-edge drugs. 

So I am just real proud of it, and I share your enthusiasm for 

what the future is. 

Mr. FROST. It is money in terms of oncology because it is very 

expensive, and it is very important, and it does save a lot of lives. 

Mr. BURGESS. If we are not careful what we do on that particular 

issue, we will drive that therapy from the physician’s office back 

into the hospital, which is more expensive, and I don’t believe that 

is the intent of the bill. 

Mr. SESSIONS. If the outpatient clinic, so to speak, does not get 

it either through efficiency or through the ability to perform this, 

we will drive people back into the hospital and have to have more 

people in the hospital and build more hospitals, and I think we will 

have a reverse. 

I thank the gentleman and Mr. Frost for your feedback, and I 

yield back. 

The CHAIRMAN. Mr. Reynolds. 

Mr. REYNOLDS. No questions. 

The CHAIRMAN. Thank you very much. 

Mr. GINGREY. Mr. Chairman, I am a cosponsor on the Weldon 

amendment. Can I speak to that? 

The CHAIRMAN. His statement has been submitted for the record, 

and if you have a statement that you would like to submit as well, 

we would certainly welcome it. 

Mr. GINGREY. Could I make a statement? 

The amendment that Dr. Weldon is presenting is in regard to the 

ICD 10 codeine provision that is in the mark. And I just want to 

say this: The physicians are faced with a tremendous burden with 

recordkeeping and, of course, HIPPA regulations now that we have 

got a final ruling on that. And as part of this provision, to put an 

additional burden on them with immediately going to this ICD 10 

change, I mean, I think—we got a study that we are waiting on in 

the next couple of months. I don’t think it is necessary to make 

that change right now. Our providers are worried about waste, 

fraud and abuse and trying to comply, and mistakes are made, and 

it is just a very costly burden on them, and I would respectfully 

ask the committee to remove that from the bill and let us wait for 

another day to do that. And let us wait for the study to come back. 

The CHAIRMAN. Thank you very much, and appreciate you both 

being here. 

Next I would like to call Messrs. Cooper, Dooley, Larson and 

Sanders. 

Mr. Dooley.

76

STATEMENT OF HON. CALVIN DOOLEY, A REPRESENTATIVE IN 

CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. DOOLEY. Thank you, Mr. Chairman. 

As we are rapidly approaching sunrise, we almost have the opportunity to have our amendment in the nature of a substitute considered in the light of day. 

Mr. FROST. But not quite. 

Mr. DOOLEY. Many of us have been working on a substitute that 

actually has bipartisan support, which we would ask you to be allowed to be considered on the floor. What the substitute does is 

that we take the $400 billion that the President has said that he 

would allow for a prescription drug benefit—it was also in the 

budget that passed the Republican House—and put that in Medicare Part B, which then we would offer a zero premium benefit 

that would incorporate a prescription drug card, much of what 

President Bush has offered, that would provide a high-cost benefit 

for all seniors under Medicare when they have $4,000 in drug 

costs. 

We also recognize that a lot of our seniors do not have the ability to pay—or to pay for their $4,000 in drug costs before this highcost benefit kicks in, so we provide a low-cost benefit for people on 

low income, which provides a 90/10 benefit up to 150 percent of 

poverty. And then we also allow in those States that will match 

contributions at the SCHIP rate, which varies from anywhere from 

a 65 to 35 split to an 80/20 split, a benefit of up to 200 percent 

of poverty. Up to 200 percent of poverty we cover almost 50 percent 

of all the seniors on Medicare today. 

So this is a plan that is very simple, and it is a plan that would 

allocate our scarce Federal resources to those seniors with the 

greatest need, and those are the seniors with very high drug costs 

and those seniors with the least ability to pay. It also eliminates 

some of the inherent problems that are part of the Chairman’s bill 

that will be considered on the floor, and one of those is just the 

structure of the bill that is going to be offered, and that is that the 

insurance—using a private insurance model, which we have many 

analysts from Wall Street who have recently said they have serious 

doubts whether anyone in the private insurance sector will offer 

this model, whether anything will be available. We think that is a 

gamble to go down that path. And also, when we set up as an insurance policy, recognize that it might not be something that they 

are going to be excited about, so we set up a separate system in 

the bill that would actually allow for the Federal Government to 

buy down the underwriting risk. 

Mr. DOOLEY. Well, we are sending a message to any insurance 

company out there under the chairman’s mark, that if you withhold 

from the market, is that the Federal Government will come in and 

assume a greater portion of your risk. And, you know, this is something that we think is a serious, serious flaw. 

The other issue which I think that we have to be very concerned 

with, is we alleviate in our bill, because we use total drug cost to 

trigger your catastrophic benefit, versus the chairman’s bill, which 

uses basically out of pocket, which will inevitably lead to private 

sector employers leaving the system and no longer providing that 

prescription drug benefit. 

77

CBO says that that can be as high as 32 percent. The response 

by Nancy Johnson today was, no, we are going to overcome that 32 

percent withdrawal of the private sector from this prescription 

drug benefit by subsidizing the private sector companies. 

Well, so what we are doing here is we are basically using taxpayer monies to subsidize private sector companies to try to keep 

them in, to provide a benefit, which we think they should be doing 

on their own. Again, I think this is a very convoluted approach. 

And why would we be designing a prescription drug benefit that 

would sacrifice private sector dollars for taxpayer dollars and provide a prescription drug benefit? 

And my last point that I will make before I turn to Mr. Cooper, 

goes to the point that Mr. Sessions made time and time again, is 

that another benefit of our bill is when you integrate the drug benefit into Medicare Part B, you are ensuring that you are not going 

to have a degree of adverse election that you are going to have on 

the stand-alone insurance-only proposal. 

Because, when you acknowledge that we have some tremendous 

advantage in drugs, which I acknowledge and I am very supportive 

of, is that those drugs may be very expensive. But if it is a standalone drug policy, that premium could quite likely escalate, because 

of costs of those drugs, and yet you get no consideration of the savings in your inpatient and your outpatient that might be generated. 

And we have a structural flaw in the underlying bill that our 

measure overcomes because of the integration into the Medicare 

Part B. And that is why I think we ought to allow this bill to be 

considered as a substitute on the floor. 

The CHAIRMAN. Thank you very much. 

Mr. Cooper. 

Mr. COOPER. I just want to support Cal Dooley’s bill. And having 

lived through Clinton health reform, and catastrophic health reform, as I think only one or two members of this committee have 

also done, I think it is very important that we learn those lessons. 

Doc Hastings mentioned earlier that those who do not learn from 

the lessons of history are doomed to repeat them. I know no one 

on this panel and no one in this Congress wants to repeat those 

lessons. I fear that we are dangerously close. 

For example, the Clinton health plan was not bipartisan. Nor is 

the bill we are likely to put on the floor—there might be a sprinkling, but this is not a genuine bipartisan bill. The Clinton bill was 

way too complicated. Our colleagues on the other side of the aisle 

made great hay by showing us postcards and stuff like that. 

This bill is also very hard to diagram, even if you use fine print. 

But there is another clincher, which is asking seniors to pay even 

amounts like $35 a month, when they can’t see a clear benefit. 

When they can see for example, the first half of the donut is really 

only in the bill, to overcome the terrific adverse selection problem 

that is set up. 

So within the same CBO budget scores, in fact less $367 billion 

Dooley and his team have come up with a bill that is beautiful and 

simplistic, fair to seniors, and remarkably efficient in the way it 

spends taxpayer dollars. 

I think I have been as bipartisan as anybody in this Congress on 

health care issues in particular. And I could have supported pretty 

78

much any bill. But I wanted to find the best one. And Cal has got 

the best one. So I hope this committee has the courage to let the 

House vote its will on a measure like this, to let the American people see what you can do within the same budget window. It is a 

bill that seniors are going to prefer dramatically over what you are 

considering, and I think this House should have a chance to work 

its will. 

Read the Washington Post editorial. I am not the biggest fan of 

the Post in the world. They are not the only folks who supported 

this bill. But now it is yesterday’s paper, this hearing has gone on 

so long. That will show you at least some objective observers, looking at the debate right now. And I mean, they have a chance to 

pick out a bill that makes sense, and they are picking the Dooley 

bill. 

So give it a chance. There are a couple of technical things we can get into. Some people shy away from the $4,000 number. That is 

total drug costs, that is not out of pocket. 

75 percent of seniors already have some sort of drug help already. It probably means for most seniors in terms of out-of-pocket 

expenditures, 2- or $3,000 they are going to be able to benefit from 

this bill, plus the 200 percent poverty provision. It is really a remarkably efficient use of government dollars. 

So I urge to you make it in order, as a substitute.

The CHAIRMAN. Thank you very much, Mr. Cooper. Let’s go to 

Mr. Larson and then Mr. Sanders. 

Mr. LARSON. Thank you very much, Mr. Chairman, Mr. Frost, 

and members of the committee. First just an observation. I have 

been in Congress for 5 years. I agree with much that has been said 

by the members of this committee earlier this evening, that this is 

perhaps the most important piece of legislation that we are going 

to vote on. 

And so it is with a profound and deep sense of respect that all 

of us take this issue so seriously. For 5 years—I have been in Congress for 5 years, I have gone back to my district and spoken to 

seniors. I can’t tell you how difficult it is to tell them that this is 

a piece of legislation that will take effect 3 years from now. That 

is extraordinarily disheartening. But even more so, is the fact, and 

the reason that I am here, and I respect all of the commitments 

that you have. 

But, the reason that I am here at this hour is because I know 

realistically I am not going to get a chance in this Congress to 

speak on an issue that I care so deeply about, and have been addressing the citizens of my district for the past 5 years. That is the 

reality. 

That is why I am hopeful, though I am a realist, that so much 

of this debate that we have heard in this committee this evening 

for those of us that aren’t on Commerce or Energy or Ways and 

Means, we care and feel as strongly about senior citizens as you 

do here on the Rules Committee for them. 

And as a person who cares deeply about this institution, what is 

hurt here the most, aside from seniors from my perspective, is the 

institution. And the other body, as Mr. McGovern has seen fit to 

have far longer debate, I understand the realities of what we have 

to deal with here in the committee. 

79

But do I think with so many intelligent and thoughtful proposals 

they ought to be made in order so that we can debate them? Very 

simply, I would also like to compliment a dear friend and colleague, 

Nancy Johnson. I think that her energy, her temerity, her conscientious manner in which she has approached this issue, certainly her 

good intentions have always been there. 

I disagree with the approach and associate myself with the comments that Mr. Dooley made in terms of this whole issue of subsidies that the doctors also addressed. I say it from a sense of conviction, that as I know all members on the Rules Committee, and 

here that come before this body do, I come from Hartford, the insurance capital of the world. I know a little bit about actuarial assumptions. I know a little bit about adverse selection. 

I know a little bit about the reality of making a profit important 

to any business, and the scarcity of a chance that that has under 

this proposal. And how do we, for God’s sake, go back and explain 

that to our seniors? In the meantime, what we are doing, as the 

doctors have said, are forcing them to subsidize not only the private plans, the ones that the Federal employees have, but the rest 

of the free world. 

My proposal is very straightforward. And I say this with respect 

to all plans. Cost is the issue. If you don’t go in and have the full 

faith and credit and leverage of the Federal Government, and all 

of its agencies, and whether it is the VA or whether it is the DOD 

or whether it is HHS, without that leverage, there can be no cost 

control. Because, the program just is unfeasible in terms of its profitability for people to underwrite in an affordable manner. 

Ronald Reagan said: Facts are a stubborn thing. This is a stubborn, stubborn, thorny issue. But by telling people that it will take 

place in 2006 and bursting another bubble in front of the seniors, 

while they continue to subsidize the rest of the world, is a wrongheaded approach. That is why I offer this amendment and I thank 

you. 

The CHAIRMAN. Thank you. 

Mr. Sanders, thank you for being here. I know you are here on 

a different amendment. 

Mr. SANDERS. I don’t usually get to work this early. I think that 

the evidence is clear, and all due respect, that the proposals that 

you are offering is a weak proposal in terms of methods. The reality is that if I am a senior citizen, and I spend $1,000, or I have 

$1,000 worth of prescription drug needs, I am going to end up paying $807 out of my own pocket. It is very hard for you to go back 

in your district and say to your constituents that this a serious proposal. We pay 17 percent, 13 percent I am sorry. And I pay 87 percent. That is a weak proposal. It doesn’t get much better as we 

spend $5,000. 

Now, why is it a weak proposal? Are you mean guys? No, I don’t 

think that. It is a weak proposal because you don’t have cost containment in your proposition. And if the government is going to pay 

the highest prices in the world for prescription drugs, and you 

want to only spend $400 billion you ain’t going to get much. That 

is the reality. So your proposal is flawed significantly because you 

are not standing up to the pharmaceutical industry, and are you 

80

continuing to pay the highest prices in the world for prescription 

drugs. 

And the bottom line is, and I think we should be honest, and let 

me put this on the record. The pharmaceutical industry is the most 

powerful industry in the world. They are spending $150 million 

this year, just the industry, not to mention the separate companies, 

to make sure we do not lower prices. In the last few years they 

have spent hundreds of millions of dollars and they are succeeding. 

We should be honest about that. 

Now, what should we be doing? What should we be doing? Well, 

it seems to me, and I was—I have to tell you the very first Member 

of the United States Congress to go across the Canadian border. I 

did that 4 years ago. And people who were with me, women bought 

Tamoxifen, the breast cancer drug, for one-tenth of the price. And 

let me tell you, let’s not demagogue the Canadian Government. 

They are doing the right thing. They are doing the right thing by 

negotiating with the drug companies. Their prices are not the lowest in the world, as you know, in Europe they are lower. Every 

other country in the world’s government is standing up to the industry except ours. 

When people come before you and say the problem is the rest of 

the world, not us, I think we have got it backwards. It is us, not 

the rest of the world. They are doing the right thing, we are doing 

the wrong thing. So what should we do? I have two amendments. 

The first one is a very comprehensive amendment, and interestingly enough, you have heard components of it all evening long. If 

we are going to talk about cost containment, let’s do three things 

then I will tell you what you get. 

First of all, I am not going to spend any more money than you 

are. I am going to spend 400 billion. You are spending 400 billion. 

This is what I get compared to what you get. I get premiums of 

$24. I get no deductible. I get an 80/20, and I get catastrophic coverage at $2,000. 

And I have very strong protections for senior citizens, stronger 

than yours. And I don’t spend any more money than you do. Now 

how do I do that? Am I a magician? No. It is because I have cost 

containment, you don’t. What is my cost containment? Well, interestingly you have heard it all evening. I combine what everybody 

else has talked about, reimportation. 

The argument that you cannot bring in safe prescription drugs 

from Canada is a total fraud. There is 1 million people who are 

doing it. Do you know how many of them have been sick or died? 

Anyone here know? The answer is zero. We had the FDA before 

our committee. The Canadian Regulatory System is exactly similar 

to us. We had a CRS report done on that. 

You have free trade—you, Dave, are a free trader aren’t you, 

right? You get on the floor of the House, you say how great free 

trade is. 

I don’t often agree with you. But if you have free trade in pork 

bellies coming over the Canadian border, if you get lettuce and tomatoes from Mexico from God knows where, why does anyone here 

think that you cannot bring in regulated safe prescription drugs 

from Canada, a system which has a strong regulatory system, the 

same as ours. 

81

Nobody with a straight face can make that argument. 

So that is number 1. You do reimportation. Number 2, we do 

what a number of people have talked about. You do exactly what 

the Veterans Administration is doing. You use the clout of the Federal Government to negotiate the strong price. And the third thing 

you do, which we have also heard earlier, we are spending billions 

and billions of dollars to go to the NIH that are used for research. 

If we are doing that, then the companies cannot just charge outrageous prices. It is called reasonable pricing. The taxpayers paid 

for the development of the product, they should get a break on 

that. I think that is common sense. 

You add those things together, you know what, you have lowered 

the cost of prescription drugs for senior citizens, for the government, for the taxpayer. And that is why I can do far more than you 

can do, and spend the same amount of money that you can, because I am getting the product a lot cheaper. That is what I am 

doing. 

And, I have to tell you, the pharmaceutical industry doesn’t contribute very much to me. I have got to be honest about that. They 

don’t. But that is the issue. The issue is that we have the guts to 

stand up to the industry. That is my first amendment. That is the 

major one, that I would ask you to put in order. 

The second one is a more simple one. If you don’t want to go that 

far, then do what you played a game with doing. Earlier we had 

the first people from the Commerce Committee talk about reimportation, go through the whole reimportation, but then buried 

away in there is this little section called the Cochran amendment. 

It says it has to be approved, the Secretary of HHS has got to say 

that it is safe and can save money. 

The Secretary has already told us publicly he isn’t going to do 

it. So all of that language, and you shouldn’t play a game. If you 

don’t believe in reimportation, don’t put it in. Gutknecht was right. 

We should do those things. Like putting it in, but you are not really serious about it. 

My second amendment would simply say, limit it to Canada, because of the same regulatory system that we do, and not have the 

Secretary have to get the approval. So it is a reimportation bill. 

You do that, and you lower prescription drug prices in the country 

by 30 or 40 percent. 

I will bet you, I will get a better benefit just by doing that without one nickel of taxpayers dollars than you get. People from 

Vermont, they get in the car and go across the border. They will 

save more money just going across the border than you will in your 

bill, and it doesn’t cost $400 billion and it won’t cost a penny. 

So those are the two options, be bold, do the whole thing or just 

take the Canadian piece. You will be far better off than what you 

have got. 

The CHAIRMAN. Thank you. 

Mr. SANDERS. I thank you for your support, Mr. Chairman. I 

know it will be there. 

Mr. LINDER. Thank you. 

Mr. FROST. You know, I am struck by a couple of ironies now 

that we are winding down here. The first irony, Mr. Dooley, I think 

you are probably aware of this, that your proposal is basically what 

82

the President was for originally. I remember, you know thinking 

about it, because I remember when he put it in a State of the 

Union, or somewhere, thinking that, well, it is an interesting proposal. I am not personally for it. 

But, I am pretty sure that your proposal is very similar to what 

the President originally proposed, which was to take care of people 

at the bottom by a system of subsidies and to have catastrophic at 

the top. Interesting that you wound up the same place that he 

started at. 

The second irony is that even though we started very late tonight, 12:50, this has been one of the best committee hearings we 

have had. We have actually had a very good discussion on a very 

important issue. It is too bad that it was at a time when there was 

virtually no press coverage. I think there are two reporters here, 

maybe a couple of other people. I recognize two reporters in the 

room. 

And these are—this type of meeting should be held at a time 

when it can be covered by the public’s representatives, by the 

press. And it wasn’t. 

Now, the other part is that clearly your amendment should be 

made in order. It is not going to be. And there are some other 

amendments that clearly should be made in order if you were going 

to have a fair consideration on the floor. These amendments might 

all fail. I mean, the majority, I assume, has the votes to pass their 

bill. I don’t understand what they are afraid of. Why wouldn’t they 

give you a vote? 

Now, they are going to give Dingell and Rangel a vote, because 

they are not worried about that. They think they can beat that. 

They probably can. But, why won’t they give you a vote? Why won’t 

they give Mrs. Capps a vote? Why won’t they give Dr. Burgess and 

Dr. Gingrey a vote? That is the type of rule that ought to come out 

of this committee, where you have serious people with serious proposals. If the majority has their act together, they will beat all of 

those proposals. And if they don’t, they don’t deserve to. I mean 

you have come up—a group of members, and Mr. Sanders has a 

very serious proposal that deserves to be voted on. 

And yet we have had this meeting, that has gone on for 3 hours 

and none of you who have come up here are going to get your 

amendment in order, except the Dingell-Rangel, and that is too 

bad, because this is such an important piece of legislation that the 

House ought to have the opportunity, just as the Senate has done. 

I am not suggesting this should be on the floor for 2 weeks, but 

there is a way to structure a rule with time limits where all of the 

major proposals can be voted on. 

Now, we are under the airplane imperative. The majority has decided that they want to give away Friday. And so they want to—

they are going to have this go on the floor Thursday, today, under 

a very tight rule. This bill could be on the floor for 2 days, Thursday and Friday, and all of you could have a vote on your amendments. 

You might all lose. But you should have that right. It is unfortunate that the majority will not give you the opportunity to present 

very sensible proposals and to have the House vote on those. 

83

And that was the thing—I am sorry if my remarks were overly 

harsh at the beginning of this proceeding. But that is what I was 

talking about, Mr. Chairman, is there is no reason why this House 

should not have the opportunity to cast votes on serious proposals 

made by serious and thoughtful members on this—what may be 

the single most important piece of legislation that this House will 

consider during this 2 year session of Congress. 

The CHAIRMAN. Thank you very much. 

Ms. Pryce. 

Ms. PRYCE. I have no questions. Thank you. 

The CHAIRMAN. Mr. McGovern. 

Mr. MCGOVERN. I want to thank Mr. Dooley and Mr. Cooper and 

Mr. Sanders and Mr. Larson for being here at 4 in the morning, 

because it shows their seriousness and their commitment to this 

issue. 

I want to associate myself with the remarks of our ranking member. I think these proposals absolutely should be made in order. 

They should be debated. Even if it takes a week or two, how many 

suspensions have we voted on this week alone? I have to believe 

this is a little bit more important than some of these suspensions. 

And, this is an issue that impacts 40 million senior citizens. And, 

quite frankly, it deserves not only to have your amendments in 

order on the floor, but you deserve more than 10 minutes for this 

amendment and 5 minutes for that amendment, because we should 

have a debate, a real debate rather than screaming soundbites at 

each other. 

I agree with Mr. Frost, that I thought that the testimony by Republicans and Democrats here tonight was very thoughtful and 

very productive. And I also agreed with something Mr. Larson said 

in his opening remarks, that he is not on the Energy and Commerce Committee, he is not on the Ways and Means Committee, 

but there were members who were not on the relevant committees 

that nonetheless have an opinion on this issue. Every one of us 

does. 

And, this idea that well, the committees have worked their will, 

and we should all just respect that. We had a defense authorization 

bill that came through this committee. And not all of us are on the 

Armed Services Committee, but the chairman of our committee had 

a very thoughtful amendment that was made in order. I agreed 

with him on it and voted for it, but it was brought to the floor. It 

illustrates the fact that there are members who are not on the committees of jurisdiction that do have interesting and thoughtful and 

productive ideas. And, I think it is just a shame that we are not 

going to have that kind of thoughtful debate on the floor. 

So I thank you all very much for your comments. 

The CHAIRMAN. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. I thought the presentations, all of the presentations, that were made here were very interesting and helpful. I 

appreciate the hard work. 

The CHAIRMAN. Mr. Hastings. 

Mr. HASTINGS of Florida. Thank you very much, Mr. Chairman. 

Mr. Chairman, I appreciate all of the amendments of our colleagues. All of them have studied very carefully and for a very long 

period of time. Mr. Cooper was with us at one point and then away, 

84

and back once again discussing the same issues. And Mr. Dooley 

has been a continuing leader on this. 

Of course, none of us have the nerve that Bernie Sanders has to 

really do what is right, and none of us have the nerve to say what 

is really needed here, that is universal health care notwithstanding 

all of the ups and downs and back and forth and everything that 

we talk about. 

The reality is, that we are better people than that, and we ought 

to be about that business, Mr. Chairman, I also want to say to 

John, I did not know or ask the nature of your child’s illness. But 

I am delighted to see you back. And I know that from a personal 

standpoint, like our colleague, Ms. Pryce and others of our colleagues, Mr. Sessions, all of us have these complications in our personal lives that ought to cause us to want to dramatically do something that would be beneficial for all of us. 

I can’t imagine what the medical costs may have been for the period of time that you were away from here. And when I talk frequently, as I do about my mother, I am not talking about somebody 

that is a stranger, I am not talking about people who are constituents, I am talking about somebody that brought me here on earth, 

and I pay for, gladly, every inch of this mile that we are walking 

toward her death. 

And I may very well precede her, not being God, but the fact of 

the matter is, it is extremely expensive. And all I know is that we 

are doing things sometimes that are helping people that don’t need 

help. 

And we are not doing things that we ought to do to help people 

that do need help. Today, when we pass this measure, or Friday, 

we will not have done what we could have done had we just given 

ourselves the time and attention to undertake to do what is necessary. 

With that, Mr. Chairman, I thank our colleagues and I am sure 

that each of them should have the privilege as well as every other 

member to have their measures brought to the floor and let the 

will of the House be worked. 

The CHAIRMAN. Thank you very much, Mr. Hastings. 

Mr. HASTINGS of Washington. No questions. 

Mr. SESSIONS. Mr. Chairman, I would just agree with my colleagues. I think it was a wonderful debate that we had this 

evening. I will tell you that I was personally impressed with, I 

think every single speaker that came up that talked about their 

thoughts and ideas. I think it shows the extreme need for us to address this issue. 

And I too would like to single out Nancy Johnson for her clear 

articulation and her vision of ideas about what this great Nation 

has in mind for us, a plan. And I feel like this was well worth my 

time to be here, even at this late time. 

I will not be representing the Rules Committee in the morning 

at the baseball game practice. 

The CHAIRMAN. Why not? 

Mr. SESSIONS. I choose not to. Mostly because we have seen what 

happens with one colleague who stayed up too late and misspoke, 

so I am not going to do that. 

85

But I think this is worth our time, and thank everyone for hanging in on this. 

The CHAIRMAN. Thanks. Let me say that the evening is not over 

yet. 

Mr. Reynolds. 

Mr. REYNOLDS. No questions. 

The CHAIRMAN. Thank you very much, gentlemen. We appreciate 

your being here. 

Mr. DOOLEY. Just ask unanimous consent to insert into the 

record a statement from Ellen Tauscher. 

The CHAIRMAN. Without objection, Mrs. Tauscher’s statement 

will appear in the record. 

[The prepared statement of Mrs. Tauscher follows:]

PREPARED STATEMENT OF HON. ELLEN TAUSCHER, A REPRESENTATIVE IN CONGRESS

FROM THE STATE OF CALIFORNIA

Thank you Chairman Dreier and Ranking Member Frost for recognizing me. I 

would like to voice my support for the Medicare Prescription Now Act to be the substitute to H.R. 1. It is clear that the status quo is not working to make prescription 

drugs affordable for seniors. It is also clear that our country’s current economic situation does not give Congress a lot of options for solving this growing problem. Any 

prescription drug plan needs to be part of Medicare, which seniors like and trust. 

Our plan is managed by Medicare. By leveraging the buying power of all seniors, 

our plan allows every single person on Medicare to benefit from immediate drug 

savings, regardless of how many prescriptions they are filling a month. Furthermore, Mr. Chairman, our seniors need to be protected from catastrophic drug costs. 

Seniors who have high drug costs will be able to access the full benefit sooner because our plan focuses on the total cost of the drug—not the discounted price paid 

out-of-pocket. Our plan has an extra safety net for those who really need it—people 

with total drug costs of $4,000 a year. 

Finally, Mr. Chairman, I would like to point out that under our bill, companies 

that currently provide prescription drug coverage to their retirees will have the incentive to continue doing so because the federal government will assume the risk 

of drug coverage once beneficiaries reach their deductible. We need to be smart and 

realistic about how we provide every American senior with prescription drug coverage. Given the current economic situation, our plan is the one that provides this 

coverage and is fiscally achievable.

The CHAIRMAN. Our next witness is the gentleman from Florida, 

Mr. Hastings. 

Mr. HASTINGS of Florida. Mr. Chairman, I would ask unanimous 

consent to have both statements that I have made placed in the 

record. I won’t belabor the matter this evening. I do urge that one 

of my measures is nothing more than a sense of Congress that expresses support for Federal and State funded in-home care for our 

Nation’s elderly. 

It doesn’t impact this bill in any way, all it does is say that we 

ought to have better in-home care establishing guidelines, implementing better schooling for the people that do it. 

I can’t imagine that this couldn’t be something that could be in 

order. With that in mind, I ask unanimous consent that I ask that 

the statements on both measures that I have offered be placed in 

the record. 

The CHAIRMAN. Without objection. 

[The prepared statements of Mr. Hastings of Florida follows:]

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Mr. LINDER. No questions. 

Mr. FROST. Mr. Chairman, are we to the point where we are 

going to be voting shortly? 

The CHAIRMAN. We have another witness. We are asking questions of Mr. Hastings now. 

Mr. FROST. I will save it to the end. 

Ms. PRYCE. No. 

Mr. MCGOVERN. No. 

Mr. DIAZ-BALART. No questions. 

Mr. HASTINGS of Washington. No. 

Mr. SESSIONS. No. 

Mr. REYNOLDS. No. 

The CHAIRMAN. Thank you very much. Thank you very much. 

Our next witness is the gentleman from Arkansas, Mr. Berry, who 

does not appear to be here. Our next witness is the gentleman from 

Massachusetts, Mr. McGovern. 

Mr. MCGOVERN. Mr. Chairman, I will ask unanimous consent to 

insert my statement in the record since I talked about it in my 

opening statement in support of my amendment. 

[The prepared statement of Mr. McGovern of Massachusetts follows:]

PREPARED OPENING STATEMENT OF HON. JAMES MCGOVERN, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. CHAIRMAN, I will be brief. This bill includes a copayment for home health 

services. My amendment would strike this provision from the bill. 

A home health copay will lead to increased costs for seniors, home health care 

agencies and the states. Seniors will have to pay for these costs out of pocket, a difficult task for seniors living on a fixed income. Agencies will have increased costs 

due to collection and the paperwork necessary to complete collection of the copay. 

And, finally, this will be an unfunded mandate on states as Medicaid begins to pick 

up the costs for home health care patients who can’t afford Medicare home health 

services. 

Some groups, like 60-plus and the Seniors Coalition, are labeling this a ‘‘sick tax’’ 

on home health beneficiaries. I think this an important point. Medicare beneficiaries 

primarily live on a fixed income and a copay, although it may not seem like a lot 

of money, will take away from the limited funds these seniors rely on to live a relatively comfortable life. 

Mr. Chairman, this is bad policy, plain and simple and I urge my colleagues to 

support my amendment. I yield back the balance of my time.

The CHAIRMAN. Thank you very much. Our next witness is Mr. 

Langevin. He appears not to be here. So that will close the hearing 

portion. 

Mr. Frost, you would like to be recognized. 

Mr. FROST. Mr. Chairman, it is really, and I am anticipating a 

rule that the committee is going to be handing out. But I think it 

is a very sad day. This, as I said a moment ago, this may be the 

single most important vote that any of us cast this session. And if 

we should be so fortunate to be back in the majority any time soon, 

and if I should be so fortunate to be here, and to be the chairman 

of the committee at that time, I will not tolerate a major piece of 

legislation going to the floor with this kind of rule, without the 

House having the opportunity to consider major, carefully thoughtout alternatives. 

I think that this is an enormous disservice to the House. 

The CHAIRMAN. Thank you very much, Mr. Frost. 

93

We will distribute the rule. And the Chair will be in receipt of 

a motion. 

Mr. LINDER. Mr. Chairman, I move the committee grant a rule 

providing for the consideration of H.R. 1, the Medicare Prescription 

Drug and Modernization Act of 2003, under a modified closed rule, 

providing 3 hours of debate in the House equally divided among 

and controlled by the chairmen and ranking minority members of 

the Committee on Energy and Commerce and the Committee on 

Ways and Means. 

The rule waives all points of order against consideration of H.R. 

1. The rule provides for consideration of the amendment to H.R. 1 

printed in the Rules Committee report accompanying the resolution, if offered by Representative Rangel of New York or his designee, which shall be considered as read and shall be separately debatable for 1 hour, equally divided and controlled by the proponent 

and an opponent. The rule waives all points of order against the 

amendment printed in the report. 

The rule provides one motion to recommit H.R. 1 with or without 

instructions. 

The rule further provides for consideration of H.R. 2596 on the 

legislative day of June 26 or June 27, 2003, under a closed rule 

providing 1 hour of debate in the House on H.R. 2596, equally divided and controlled by the chairman and ranking minority member of the Committee on Ways and Means. The rule waives all 

points of order against consideration of H.R. 2596. The rule provides one motion to recommit H.R. 2596 with or without instructions. 

The rule provides that in the engrossment of H.R. 1, the clerk 

shall add the text of H.R. 2596, as passed by the House as a new 

matter at the end of H.R. 1, and then lay H.R. 2596 on the table. 

The rule provides that during consideration of H.R. 1 and H.R. 

2596, notwithstanding the operation of the previous question, the 

Chair may postpone further consideration of either bill to a time 

designated by the Speaker. 

The rule further provides that it shall be in order to consider 

concurrent resolutions providing for adjournment of the House and 

Senate during the month of July. 

Finally, the rule provides that the Committee on Appropriations 

may have until midnight on Thursday, July 3, 2003, to file a report 

to accompany a bill making appropriations for the Department of 

Defense for the fiscal year ending September 30, 2004, and for 

other purposes. 

The CHAIRMAN. You have heard the motion of the gentleman. Let 

me take a couple of minutes to make some comments myself and 

then provide an explanation of the rule that we are proceeding 

with. 

First of all, many people have commented over the last few hours 

about what a spectacular hearing this was. I observed that there 

have been no recorded votes on the House floor, no one has been 

called off to other meetings, and while I am not going to propose 

that we have our regular meetings begin at 12:50 and extend until 

4:30 in the morning, I will say that I think that we have had a 

great deal of attentiveness on the part of the members of the comVerDate jul 14 2003 16:56 Oct 30, 2003 Jkt 089585 PO 00000 Frm 00097 Fmt 6633 Sfmt 6602 E:\HR\OC\89585B.XXX 89585B
94

mittee and witnesses, and that is due to the fact that we haven’t 

had the normal distraction that we often experience. 

I also wanted the say that this has been fully covered by some 

of the top reporters on Capitol Hill. And we appreciate their forbearance. 

But, let me just comment on this rule. As you can see, we have 

taken both the Medicare Prescription Drug and Modernization Act 

and the Health Savings Affordability Act, and we will allow consideration of both of those measures on the floor tomorrow as outlined 

by Mr. Linder. 

We also will be putting in place provisions in this rule that will 

ensure that the House does not have to reconvene every 3 days 

based on the fact that we have yet to complete our appropriations 

work. And we still are working hard on that. 

And as the members know, we will having the rule that will be 

following this one, complete the second appropriation bill of the 13. 

We will have 11 more to work on during the month of July. And 

we hope to have those completed by the August recess. We also 

called for an allowance for the committee on appropriations to file 

their defense appropriations bills, so that we will be able to consider that immediately upon our return. And we will meet on Monday, July 7th, and that provision will be in the rule, it will make 

an allowance for that. 

Are there any amendments to the rule? 

Mr. FROST. Yes, Mr. Chairman. And I would preface that by saying that when we were in the majority, we often had very lengthy 

hearings during the daytime. We had no difficulty with members 

having to leave for votes or distractions. We didn’t have to have a 

hearing late at night to be able to have a hearing without distractions. 

Mr. Chairman, I move that H.R. 1 be considered under an open 

rule.

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the Frost amendment. 

Those in favor will say aye. Those opposed no. In the opinion of the 

Chair, the noes have it. The noes have it. The motion is not agreed 

to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

95

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. Frost. 

Mr. FROST. I have an amendment to the rule. I move the committee make in order the amendment numbered 52 offered by Representative Dooley and ask that the amendment be given the appropriate waivers. The amendment offers a prescription drug plan 

with no premiums and universal eligibility. It provides an 80/20 

cost share after total drug costs of $4,000 and enhanced benefits 

for beneficiaries living up to 200 percent of the poverty level. 

The amendment encourages continuation of current drug coverage based on reimbursement agreements with Medicare. It also 

adds rural provider fixes to address geographic inequalities. 

Mr. Chairman, this is a very thoughtful amendment offered by 

a group of Members who have a distinct and different approach 

from that being offered by the majority. I do not know if this 

amendment would pass on the floor, but it is an amendment that 

deserves to be debated on the floor. 

And I would—the reason that I said earlier that this may be the 

most important piece of legislation we will consider this session, is 

that the underlying bill, the majority’s bill, would dramatically 

change the Medicare program as your own members have acknowledged, including Mrs. Johnson, it just doesn’t provide prescription 

drugs, it dramatically changes the way that Medicare would operate after 2010. 

It is a monumental piece of legislation. And we are—the Members should be entitled to vote on serious alternatives to the approaches. I would ask for a roll call. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the Frost amendment. 

Those in favor will say aye. Those opposed no. In the opinion of the 

Chair, the noes have it. The noes have it. The motion is not agreed 

to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

96

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? Mr. Frost. 

Mr. FROST. I have an amendment to the rule. This is the Blue 

Dog substitute. I move that the committee make in order the 

amendment in the nature of a substitute numbered 50 offered by 

Representative Thompson of California, and ask that the amendment be given the appropriate waivers. The amendment in the nature of a substitute generally incorporates the provisions of the bipartisan Medicare bill, that the other body is currently debating. 

It establishes a prescription drug benefit in Medicare, delivery 

through private plans, and contains a fallback provision for areas 

where there are not at least two plans available. 

This bill has higher payments for rural health care providers 

than the House bill, and does not include the premium support provisions that would privatize Medicare in the year 2010. This is the 

bill that is currently being considered by the other body. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? 

Mr. MCGOVERN. I have a question. I guess I am just curious, if 

you can give us an explanation as to why none of these substitutes 

or amendments will be made in order? 

The CHAIRMAN. I don’t know that that is the case. 

Mr. FROST. They are not in your rule. 

The CHAIRMAN. Let me explain. What we decided, if I can answer 

your question, thank you very much. What we decided in the rule, 

was as we had discussed for the last several weeks is to make a 

substitute in order, which was my request, that we make a substitute in order. And we have made a substitute in order, the first 

substitute that was requested by the representatives of the Energy 

and Commerce Committee who testified here. 

The number 1 request from the Democratic representative at this 

table, was that we make in order the substitute that we made in 

order. We made that choice. So, while that was at the top of the 

list, we chose to make in order that amendment. 

97

Mr. MCGOVERN. Before Mr. Frost responds, I guess that is not 

answering my question, which is why—the question I have is when 

we talked to the Blue Dogs, or if we talk to any of the people who 

you acknowledge were so thoughtful and eloquent tonight as to 

why they were shut out of this process, I am wondering is because 

there is not enough time or because they were—their amendments 

weren’t germane or——

The CHAIRMAN. So that you will have an opportunity to explain 

this very clearly, and quote me well on the House floor tomorrow, 

I want to say very clearly: We made a determination that we would 

meet the request of the minority to make a substitute in order. 

The first substitute that was requested by the representatives of 

the Energy and Commerce Committee, Mr. Brown, who testified, 

his first request was that we make in order the Dingell-Rangel substitute. And that is what I perceived it to be. 

So let me just say that, that is what we are going to do. We are 

going to have a number of recorded votes. We are going to be here 

through the evening. I know that we have quite a bit of time ahead 

of us here. I have given my explanation and that is the explanation. 

Mr. MCGOVERN. I am going to yield to the gentleman, but let me 

just simply say that I think you are mischaracterizing the minority 

position. There was a letter sent to you signed by Mr. Frost and 

the leader. 

Mr. FROST. The position of the minority was that this be an open 

rule so that all substitutes can be considered. There was a letter 

sent to your leadership, by every one in our leadership, and I also 

signed the letter. It is not the position of the Democrats in Congress, it was not the position of our leadership, that only one substitute be made in order. 

You have chosen not—the majority has chosen which substitute 

it wanted to make in order. That was not the position of the minority. That was not the request of the minority. And you have a letter 

to that effect. 

The CHAIRMAN. What was the request of the minority? 

Mr. FROST. I just stated it. That every amendment be made in 

order. That was signed. 

The CHAIRMAN. That every substitute amendment be made in 

order? We chose to make a substitute amendment in order. When 

testimony was provided, the lead Democratic witness went through 

the request that you just had. We chose to make one substitute in 

order on this rule. And what we did was we made in order the first 

amendment, substitute amendment that was offered by the lead 

Democratic witness. And I would like to have a vote, if you don’t 

mind, on this amendment. 

Mr. FROST. If I may, I would like to submit for the record——

The CHAIRMAN. Without objection. 

Mr. FROST [continuing]. The letter signed by Nancy Pelosi, Steny 

Hoyer, Bob Menendez, Jim Clyburn and myself as ranking member, asking that all substitutes be made in order. 

[The information follows:]

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100

The CHAIRMAN. I understand that minority would like to have an 

open rule on this, and would like to have every single amendment 

that was proposed. 

Mr. FROST. You are mischaracterizing what the request of the 

minority was. The request of the minority is that all substitutes be 

made in order. You are mischaracterizing——

The CHAIRMAN. I did not say that the minority did not ask that 

all substitutes be made in order. What I said was, that we made 

the determination that we would give the minority an opportunity 

to offer a substitute. The first substitute that was mentioned in testimony here by the lead Democratic witness was the substitute 

that we have made in order. 

Mr. FROST. Those were the witnesses from the two committees 

of jurisdiction. Obviously they are going to be the first ones to testify. Obviously. That doesn’t mean that that was the favored position. That doesn’t mean——

The CHAIRMAN. Well, actually, Mr. Frost, if I may, that lead witness mentioned all of the substitutes. But he began by first mentioning the Dingell-Rangel substitute before he said, as you just 

have, that you would like to have the other substitutes made in 

order. 

Mr. FROST. Those two witnesses were there representing Mr. 

Dingell and Mr. Rangel. They were not representing the leadership 

of our party, they were representing the ranking members of the 

two committees of jurisdiction. 

Mr. MCGOVERN. If you go back to the opening statements, it 

began with, we want an open rule. 

The CHAIRMAN. I think we have had the vote on that. The vote 

occurs on the motion of the gentleman. 

Those in favor will say aye. Those opposed no. In the opinion of 

the Chair, the noes have it. The noes have it. The motion is not 

agreed to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington.

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

101

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. Frost. 

Mr. FROST. I have an amendment to the rule. I move the committee make in order the amendment number 1 offered by Representative Sanders and ask that the amendment be given the appropriate waivers. The amendment replaces Title 1 of the bill with 

a Medicare prescription drug benefit structured like Medicare Part 

B, with a defined premium and a strong benefit. 

It also allows the reimportation of drugs from Canada, eliminates 

price discrimination against seniors and sunsets the program when 

its expenditures reach $400 billion. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the Frost amendment. 

Those in favor will say aye. Those opposed no. In the opinion of the 

Chair the noes have it. The noes have it. The motion is not agreed 

to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

102

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. Frost. 

Mr. FROST. Mr. Chairman, I have an amendment to the rule. I 

move the committee make in order the amendment number 49 offered by four Republican Members, Representatives Buyer, Norwood, Burr, and Shadegg, and ask that the amendment be given 

the appropriate waivers. 

The amendment replaces the Title 1 drug benefit of the bill with 

a discount drug card program. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the Frost amendment. 

Those in favor will say aye. Those opposed no. In the opinion of the 

Chair, the noes have it. The noes have it. The motion is not agreed 

to. 

The FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye.

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. Frost. 

Mr. FROST. Mr. Chairman. I have an amendment to the rule. I 

move the committee make in order the amendment numbered 59 

offered by Representatives Capps and Norwood, and ask that the 

amendment be given the appropriate waivers. The amendment corrects the overpayments for oncology drugs that goes on today, but 

increases the compensation oncologists receive for their services. 

103

It also allows a more accurate payment for oncology drugs which 

by replacing the average wholesale price with the average sales 

price. It also would pay physicians for the additional work they 

perform before and after patient visits and consultations. 

I would add, Mr. Chairman, that, as you know, I have some personal experience in this area. Over the last year, my wife was operated on for breast cancer and was treated by the oncology department on an outpatient basis at Southwestern Medical Center in 

Dallas, Texas. She received excellent care. And I know that a Member on your side who is not here tonight, Mrs. Myrick, also has the 

same situation. 

And I am aware that other members of this committee have had 

members of their family or close associates who have also received 

this type of treatment. 

Mr. Chairman, I think this is an eminently reasonable amendment. And I think it would be very unfortunate if this amendment 

is not made in order. 

Mr. LINDER. Mr. Chairman, I believe that is in the bill. The average wholesale price in the bill has been taken out if you go to a 

lower actual price and a higher reimbursement fee for oncology. 

Mr. FROST. Several parts of this amendment. I do not believe the 

entire amendment is. 

Mr. LINDER. Okay. 

Mr. FROST. And, Mr. Chairman, I would ask for a vote. 

The CHAIRMAN. The vote occurs on the motion of the gentleman. 

You have heard the motion of the gentleman. Any discussion? If 

not the vote occurs on the Frost amendment. Those in favor will 

say aye. Those opposed no. In the opinion of the Chair, the noes 

have it. The noes have it. The motion is not agreed to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

104

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. McGovern. 

Mr. MCGOVERN. I have an amendment to the rule. I move the 

committee make in order amendment number 41 offered by Representative Strickland and ask that the amendment be given the 

appropriate waivers. 

The amendment guarantees that all Medicare beneficiaries participating in the bill’s new prescription drug programs will pay a 

$35 premium in 2006, the first year of the program. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the McGovern amendment. Those in favor will say aye. Those opposed no. In the opinion 

of the Chair the noes have it. 

The noes have it. The motion is not agreed to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman.

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. McGovern. 

Mr. MCGOVERN. Mr. Chairman, I have an amendment to the 

rule. I move the committee make in order the amendment number 

18 offered by Representatives McGovern and ask that the amendVerDate jul 14 2003 16:56 Oct 30, 2003 Jkt 089585 PO 00000 Frm 00108 Fmt 6633 Sfmt 6602 E:\HR\OC\89585B.XXX 89585B
105

ment be given the appropriate waivers. The amendment eliminates 

the bill’s home health care copayment. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the McGovern amendment. Those in favor will say aye. Those opposed no. In the opinion 

of the Chair, the noes have it. The noes have it. The motion is not 

agreed to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. McGovern. 

Mr. MCGOVERN. I have an amendment to the rule. I move that 

the committee make in order the amendment numbered 48 offered 

by Representatives Emanuel and Gutknecht and ask that the 

amendment be given the appropriate waivers. 

The amendment closes loopholes that brand name drug companies use to block generic drugs from coming into the market. It utilizes the principles of the free market by giving Americans access 

to FDA approved drugs from other industrialized nations and provides for a return for government sponsored pharmaceutical research. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the McGovern amendment. Those in favor will say aye. Those opposed no. In the opinion 

of the Chair, the noes have it. The noes have it. The motion is not 

agreed to. 

106

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. McGovern. 

Mr. MCGOVERN. I have an amendment to the rule. I move that 

the committee make in order amendment 20 offered by Representative Cardin and ask that the amendment be given the appropriate 

waivers. 

The amendment directs the Secretary to offer a prescription drug 

plan with standard coverage throughout the United States and 

areas not served by private prescription drug plan sponsors. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the McGovern amendment. Those in favor will say aye. Those opposed no. In the opinion 

of the Chair, the noes have it. The noes have it. The motion is not 

agreed to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder.

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

107

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. 

Are there further amendments? 

Mr. McGovern. 

Mr. MCGOVERN. I have an amendment to the rule. I move that 

the committee make in order the amendment numbered 10 offered 

by Representatives Sandlin and Green of Texas and ask that the 

amendment be given the appropriate waivers. 

The amendment would eliminate the bill’s so-called doughnut 

hole by extending 20 percent cost-sharing up to the beneficiary’s 

annual out of pocket threshold. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the McGovern amendment. Those in favor will say aye. Those opposed no. In the opinion 

of the Chair the noes have it. The noes have it. The motion is not 

agreed to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

108

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. McGovern. 

Mr. MCGOVERN. Mr. Chairman, I have an amendment to the 

rule. I move that the committee make in order the amendment 

number 30 offered by Representative Kaptur and ask that the 

amendment be given the appropriate waivers. The amendment 

would strike language in H.R. 1 that prohibits the Secretary from 

negotiating prices of prescription drugs, and requires the Secretary 

to participate in price negotiations such as the Secretary of Veterans Affairs does under the Federal Supply Schedule. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the McGovern amendment. Those in favor will say aye. Those opposed no. In the opinion 

of the Chair the noes have it. The noes have it. The motion is not 

agreed to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.]

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

109

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. McGovern. 

Mr. MCGOVERN. I have an amendment to the rule. I move that 

the committee make in order amendment number 2 offered by Representative Sanders. I ask that the amendment be given the appropriate waivers. 

The amendment includes a Canada-only reimportation provision 

allowing Americans to benefit from international price competition. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not, the vote occurs on the Frost amendment. 

Those in favor will say aye. Those opposed no. In the opinion of the 

Chair, the noes have it. 

The noes have it. The motion is not agreed to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. The motion is not agreed to. Are there further 

amendments? 

Mr. McGovern, further amendments? 

Mr. MCGOVERN. I have an amendment to the rule. I move that 

the committee make in order the amendment offered by Representative Brown of Ohio and ask that the amendment be given the appropriate waivers. 

The amendment revises the certification provision in the drug reimportation section of the bill to require the Secretary to provide 

defensible reasons for blocking its implementation to ensure that 

110

the Secretary takes into account the risks associated with failing 

to address the price discrimination against American consumers. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? If not the vote occurs on the McGovern amendment. Those in favor will say aye. Those opposed no. In the opinion 

of the Chair the noes have it. The noes have it. The motion is not 

agreed to. 

Mr. FROST. Roll call, Mr. Chairman. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Ms. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. The Clerk will report the total. 

The CLERK. Three yeas and seven nays. 

The CHAIRMAN. Are there further amendments? 

Mr. McGovern. 

Mr. MCGOVERN. Mr. Chairman, I have an en bloc amendment. 

I move that the committee make in order amendment number 13 

offered by Representative Brown of Ohio, number 8 offered by Representative Pallone, number 34 offered by Representative John, 

number 33 offered by Representative John, number 32 offered by 

Representative Green, number 29 offered by Representative 

Langevin, number 22 offered by Representatives Berry and Emerson, number 27 offered by Representative Capps, and an additional 

one offered by Representative Brown of Ohio. 

The CHAIRMAN. You heard the motion of the gentleman. Any discussion?

Mr. HASTINGS of Florida. Yes, Mr. Chairman. 

The CHAIRMAN. Mr. Hastings. 

Mr. HASTINGS of Florida. Mr. Chairman, I would like to ask you 

or Mr. McGovern whether or not Mr. Frost earlier offered an 

amendment on Dr. Burgess and—— 

111

Mr. FROST. No, I did not offer Dr. Burgess. 

Mr. HASTINGS of Florida. Then, if it is permissible, I would offer 

an amendment to the en bloc. 

The CHAIRMAN. If Mr. McGovern will agree to offer that. 

Mr. MCGOVERN. I am happy to. 

The CHAIRMAN. The Burgess-Gingrey amendment will be included in the en bloc. 

Mr. MCGOVERN. I think they had two apiece. 

Mr. HASTINGS of Florida. Three and four. 

Mr. MCGOVERN. Gingrey had two others. 

The CHAIRMAN. For the Clerk and all—— 

Mr. MCGOVERN. Why don’t I do this now and offer them separately? 

The CHAIRMAN. The vote occurs on the en bloc amendment of the 

gentleman from Massachusetts Mr. McGovern. Those in favor will 

say aye. Those opposed, no. 

In the opinion of the Chair, the noes have it. 

Mr. MCGOVERN. I ask for a roll call. 

The CHAIRMAN. The Clerk will call the roll. 

The Clerk. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Mrs. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. And the Clerk will report the total. 

The CLERK. Three yeas; seven nays. 

The CHAIRMAN. And the motion is not agreed to. 

Would you like to—— 

Mr. MCGOVERN. Mr. Chairman, I have an amendment to the 

rule; and I move the committee make in order en bloc the following 

amendments and ask that the amendments be given the appropriate waivers: Burgess numbers 3 and 4 and Gingrey number 25 

and number 26. 

112

The CHAIRMAN. You heard the motion of the gentleman. Any discussion? 

If not, the vote occurs on the McGovern amendment. Those in 

favor will say aye. Those opposed, no. 

Mr. MCGOVERN. I ask for a roll call. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Mrs. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. And the Clerk will report the total. 

The CLERK. Three yeas; seven nays. 

The CHAIRMAN. And the motion is not agreed to. 

Are there further amendments? 

Mr. Hastings. 

Mr. HASTINGS of Florida. Yes, Mr. Chairman, before I offer my 

amendments, I would like to offer an anecdotal situation that is related to two of us. 

Judge Pryce and myself have had the responsibility of sentencing 

people at different times during our career. We were provided a 

presentence investigation or probation report. It named a lot of 

things. Generally, before going into the sentencing, I read that report; and judges would make a little numerical note, some of them, 

indicating how much they were going to sentence the person to 

after listening to the person and their representative. I never did 

that, and the reason for that is I wanted to have someone persuade 

me to do either more or less than what was in the presentence report.

We have sat here as we sit here all the time. We let these people 

come up here and testify, and then we pass something out. My 

question to you Mr. Chairman, we pass out our rule—and I guess 

it is a governing principle question or process question. Do you all 

meet and discuss all of these amendments and then talk about 

113

them or do you just come in here and listen to these people and 

somewhere you made a decision as to what the rule is going to be? 

Do you understand what I am saying? Is there any—is there ever 

an opportunity for anybody to persuade us to do anything different? 

The CHAIRMAN. If you are posing a question to me, let me explain the process. 

First of all, as the gentleman knows, he is fortunate enough to 

serve in two branches of government. Obviously, the legislative 

branch is certainly quite different than the judicial branch; and I 

don’t consider the role of the Rules Committee as being anything 

akin to the judicial branch of government. 

This is a law-making body, and the process for determining what 

amendments are made in order is an ongoing order which we deal 

with the Speaker that—you know this is known as the Speaker’s 

committee. We have the majority of nine to four, which it has been 

since I have been around and serving as a member of both the majority and minority; and members of this committee are all given 

the opportunity to provide their input on both sides of the aisle. We 

structure the rule from the recommendations that are provided to 

us, working closely with the Speaker of the House and his staff; 

and then we come forward. 

I will tell you, as I have said on many occasions, I myself, having 

served 14 years as a member of the minority party, regularly, regularly pitched to make as much of the minority agenda in order for 

consideration because I feel passionate of the Madisonian spirit of 

minority rights. I will admit that sometimes I am more successful 

than others, but I will continue to do that. There are a lot of things 

that go into the consideration of these rules, and obviously the 

presentations that are made by our colleagues are one of those. 

Mr. HASTINGS of Florida. You know, that is part of the problem; 

and it was like that in the judiciary, too. People got accustomed to 

doing things the same old way, and then they couldn’t change. I 

don’t care whether it is Democrats or Republicans. They were in 

power, and we were wrong, and now we are wrong. 

All I am saying to you is that it doesn’t make good sense for us 

to make the decision about stuff—I could ask anybody in here to 

tell me what amendment number 24 is about and whether it is a 

Republican or Democratic amendment. I mean, these are serious 

proposals. 

I am not asking that this be like the judiciary. I understand the 

dynamics perhaps as good or better than you do, Mr. Chairman. 

The CHAIRMAN. I know you certainly do. You and Ms. Pryce have 

served in both branches. 

The fact is, my opening remarks were that we welcome the input 

of members of the minority and majority. I will tell you, as you 

know, on regular occasions on issues we have listened to; and I 

have tried on occasions to accommodate you every time we can. Because, quite frankly, as we have discussed in the hearing the other 

day—we had a lengthy discussion about the very narrow majority 

that we enjoy and the priority that I have set forward, and I am 

proud to be quoted on it. I have the responsibility, as do my colleagues, to move our agenda; and we are doing that. 

114

Quite frankly, as we found in the testimony provided here today, 

we are going to do something that has never been done before 

when we, tomorrow on the floor of the House of Representatives, 

pass a measure that will for the first time put into place a prescription drug program. 

Mr. HASTINGS of Florida. I am not quarreling that. I want to use 

Dr. Gingrey’s measure because there is not one of us that would 

not have had a hospital that would have benefited from what he 

talked about. Most of us in here don’t have a clue about market 

basket. And here is somebody who came in here—and what I am 

saying to you is, I will tell you, after I listened to him, I wanted 

his amendment to be in order not as a Democrat, as a citizen of 

the United States. 

I think it is an abomination when we can’t come in here and 

change our minds or you change your mind or you go back to the 

Speaker or all of you go back to the Speaker and all the staff and 

everybody else and say to them, look, we had some people come in 

here with some serious stuff that needs to be talked about. If we 

are going to make up our minds ahead of time, what the hell are 

we up here for? We ought to mail it in. 

I have an amendment. 

The CHAIRMAN. Please state the amendment. 

Mr. HASTINGS of Florida. Amendment number 9 offered by Representative Pallone and ask that the amendment be given the appropriate waivers. Amendment charges the Secretary of Health and 

Human Services to use the collective purchasing power of 40 million Medicare beneficiaries to negotiate lower drug prices. The Secretary must take into account the goal of promoting the development of breakthrough drugs. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? 

If not, the vote occurs on the Hastings amendment. Those in 

favor will say aye. Those opposed, no. 

Mr. HASTINGS of Florida. I ask for a roll call. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Mrs. Slaughter. 

115

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. And the Clerk will report the total. 

The CLERK. Three yeas; seven nays. 

The CHAIRMAN. And the motion is not agreed to. 

Are there further amendments? Mr. Hastings. 

Mr. HASTINGS of Florida. I have an amendment to the rule. I 

move the committee make in order amendment number 5 offered 

by my colleague from Florida, Representative Wexler, and ask that 

the amendment be given the appropriate waivers. 

The amendment creates an affordable, dependable Medicare prescription drug benefit structured like Medicare Part B with the defined premium and a strong benefit. The bill is paid for by freezing 

or repealing the recent tax cuts which disproportionately benefit 

the wealthiest Americans. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? 

If not, the vote occurs on the Hastings amendment. Those in 

favor will say aye. Those opposed, no. 

Mr. HASTINGS of Florida. I ask for a roll call. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Mrs. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. And the Clerk will report the total. 

The CLERK. Three yeas; seven nays. 

The CHAIRMAN. And the motion is not agreed to. 

Are there further amendments? Mr. Hastings. 

116

Mr. HASTINGS of Florida. Three more, Mr. Chairman. I have an 

amendment and move en bloc Cardin number 58, Allen number 43, 

Allen number 44, Andrews number 11, Andrews number 12, Engel 

number 39, Engel number 40, Inslee number 23, Inslee number 24, 

Larson number 51, Sanchez number 21, and Tierney number 42. 

The CHAIRMAN. You have heard the motion of the gentleman. 

Any discussion? 

If not, the vote occurs on the Hastings amendment. Those in 

favor will say aye. Those opposed, no. 

Mr. HASTINGS of Florida. I ask for a roll call. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Mrs. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Aye. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. And the Clerk will report the total. 

The CLERK. Three yeas; seven nays. 

The CHAIRMAN. And the motion is not agreed to. 

Are there further amendments? Mr. Hastings. 

Mr. HASTINGS of Florida. I have an amendment to the rule. I 

move the committee make in order the amendment number 38 offered by myself and ask that the amendment be given the appropriate waivers. I have explained the amendment and offer a unanimous consent request. 

The CHAIRMAN. You heard the motion of the gentleman. Any discussion? 

If not, the vote occurs on the Hastings amendment. Those in 

favor will say aye. Those opposed, no. 

In the opinion of the Chair the noes have it. The noes have it, 

and the motion is not agreed to. 

Mr. HASTINGS of Florida. I have one more amendment. I move 

the committee make in order the amendment number 37 offered by 

myself and ask that the amendment be given the appropriate waivVerDate jul 14 2003 16:56 Oct 30, 2003 Jkt 089585 PO 00000 Frm 00120 Fmt 6633 Sfmt 6602 E:\HR\OC\89585B.XXX 89585B
117

ers. The amendment is a sense of Congress expressing support of 

Federal and State funded in-home care for the elderly. 

The CHAIRMAN. You heard the motion of the gentleman. Any discussion? 

If not, the vote occurs on the Hastings amendment. Those in 

favor will say aye. Those opposed, no. 

In the opinion of the Chair, the noes have it. The noes have it, 

and the motion is not agreed to. 

Are there further amendments? If not, the vote occurs on the motion of the gentleman from Atlanta. Those in favor will say aye. 

Those opposed, no. 

In the opinion of the Chair, the ayes have it. 

Mr. FROST. Roll call. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. Aye. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. Aye.

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. Yes. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. Aye. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. Aye. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. Aye. 

The CLERK. Mr. Frost. 

Mr. FROST. No. 

The CLERK. Mrs. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. No. 

The CLERK. Mr. Hastings of Florida. 

Mr. HASTINGS of Florida. Nay. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. Aye. And the Clerk will report the total. 

The CLERK. Seven yeas, three nays. 

The CHAIRMAN. The motion is agreed to. 

Ms. Pryce has been working on this for a long period of time, and 

she will be managing this for the majority and Mrs. Slaughter for 

the minority. 

Let me just say we have two more rules that we are going to be 

considering: the measure on H.R. 2559, the Military Construction 

Appropriations bill. We have no witnesses here. We have an open 

rule that we are going to be having offered by the gentleman from 

Atlanta, Mr. Linder. 

Mr. LINDER. Mr. Chairman, I move the committee grant H.R. 

2559, the Military Construction Appropriations Act for fiscal year 

2004, an open rule providing one hour of general debate equally diVerDate jul 14 2003 16:56 Oct 30, 2003 Jkt 089585 PO 00000 Frm 00121 Fmt 6633 Sfmt 6602 E:\HR\OC\89585B.XXX 89585B
118

vided and controlled by the chairman and ranking minority member of the Committee on Appropriations. 

Under the rules of the House the bill shall be read for amendment by paragraph. The rule waives points of order against provisions in the bill for failure to comply with clause 2 of rule XXI—

prohibiting unauthorized appropriations or legislative provisions in 

an appropriations bill. The rule authorizes the Chair to accord priority in recognition to Members who have preprinted their amendments in the Congressional Record. 

Finally, the rule provides one motion to recommit with or without instructions. 

The CHAIRMAN. You heard the motion of the gentleman. 

Any discussion? Mr. Frost. 

Mr. FROST. I have an amendment. I move the committee make 

in order the amendment offered by Representative Obey and ask 

that the amendment be given the appropriate waivers. 

The Obey amendment would increase the amount of the Military 

Construction Appropriations bill to the level of the President’s request. This amendment is paid for by reducing the average tax cut 

received by millionaires under H.R. 2 from $88,000 to $83,000. 

The CHAIRMAN. You heard the motion of the gentleman. Any discussion? 

Mr. MCGOVERN. I strongly support the gentleman’s amendment. 

We all talk about what a great job our men and women in uniform 

are doing, and this is underfunded and adequately addresses a 

whole range of issues. 

The CHAIRMAN. Vote occurs on the Frost amendment. Those in 

favor will say aye. Those opposed, no. 

In the opinion of the Chair, the noes have it. The noes have it. 

Mr. REYNOLDS. Roll call. 

The CHAIRMAN. The Clerk will call the roll. 

The CLERK. Mr. Goss. 

[No response.] 

The CLERK. Mr. Linder. 

Mr. LINDER. No. 

The CLERK. Ms. Pryce. 

Ms. PRYCE. No. 

The CLERK. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. No. 

The CLERK. Mr. Hastings of Washington. 

Mr. HASTINGS of Washington. No. 

The CLERK. Mrs. Myrick. 

[No response.] 

The CLERK. Mr. Sessions. 

Mr. SESSIONS. No. 

The CLERK. Mr. Reynolds. 

Mr. REYNOLDS. No. 

The CLERK. Mr. Frost. 

Mr. FROST. Aye. 

The CLERK. Mrs. Slaughter. 

[No response.] 

The CLERK. Mr. McGovern. 

Mr. MCGOVERN. Aye. 

The CLERK. Mr. Hastings of Florida. 

119

Mr. HASTINGS of Florida. Yes. 

The CLERK. Mr. Chairman. 

The CHAIRMAN. No. And the Clerk will report the total. 

The CLERK. Three yeas; seven nays. 

The CHAIRMAN. And the motion is not agreed to. 

Are there further amendments? If not, the vote occurs on the motion of the gentleman from Atlanta. Those in favor will say aye. 

Those opposed, no. 

In the opinion of the Chair, the ayes have it. The ayes have it. 

Mrs. Myrick will be managing this rule for the majority. 

Mr. FROST. Mr. McGovern for the minority. 

The CHAIRMAN. Our final rule, as we discussed at the subcommittee hearing committee that Mr. Linder presided over, we 

will be allowing for the consideration of motions to suspend the 

rules on Wednesdays through this Congress. 

Chair will be in receipt of a motion. 

Mr. LINDER. Mr. Chairman, I move the committee report a resolution providing that during the remainder of the One Hundred 

Eighth Congress the Speaker may entertain motions that the 

House suspend the rules on Wednesdays as though under clause 1 

of rule XV. 

The CHAIRMAN. You heard the motion of the gentleman. Any discussion? 

If not, the vote occurs on the gentleman’s motion. Those in favor 

will say aye. Those opposed, no. 

In the opinion of the Chair, the ayes have it. The ayes have it, 

and Mr. Linder will be managing this rule for the majority. 

Mr. FROST. Mr. McGovern for the minority. 

The CHAIRMAN. And Mr. McGovern for the minority. 

Thank you all very much for being here. We thank you very 

much. We appreciate that, and we will see you all in a very short 

period of time. 

The committee stands adjourned. 

[Whereupon, at 5:10 a.m., the committee was adjourned.]