Jan Schakowsky

Progressive Agenda for the Common Good: Health Care for All - June 12, 2006

Jan Schakowsky
June 12, 2006— Washington, DC
Take Back America conference
Print friendly

I want to thank Bob Borosage, Roger Hickey and everyone at the Campaign for America's Future for putting together this amazing conference.

And I can tell you, that our future looks good - change is in the wind. Can you feel it?

I also want to thank Jacob Hacker for his great work. His book, Off Center, has a whole section on how the Part D drug benefit came into being - check it out at the book signing.

It's important for all of us to understand Part D because it is the shape of what the Bush Administration, the Republican Congress, the pharmaceutical companies and the insurance industry have in store for all of us.

If you like the privatized Part D, you'll like their plans for health care. If you don't, we need to get busy.

Some say the d in Part D stands for Disaster. The New England Journal of Medicine says the D is for Defective. But for anyone who expected an affordable prescription drug benefit in Medicare, the D stands for major Disappointment.

Seniors and people with disabilities desperately need a drug benefit that meets three tests. One, it's affordable. Two, it covers the drugs they need. Third, it's in Medicare. Part D should be Part F - it flunks all three.

First test: affordability.

The Republican Part D benefit actually prohibits Medicare from negotiating for drug discounts, like the VA and large employers do today. Instead of using economies of scale and bulk purchasing principles, Part D embodies the "let's make sure the drug and insurance companies can profit at the consumers' expense" principle.

The pharmaceutical industry is free to charge whatever it wants. The Part D drug benefit started on January 1, 2006. In its first 2 months, the average price of the 10 most popular drugs used by seniors rose 4%. In just 2 months, those drug prices rose 25% more than they did in all of 2005.

Part D drug prices are 80% higher than the prices negotiated by the VA and 60% higher than prices in Canada. No wonder the drug companies fought so hard against negotiation.

Instead of lowering drug prices, Part D shifts costs onto the backs of senior citizens and the disabled who now face the infamous donut hole. For those of you unfamiliar with Part D - this is not a tasty treat - it's a $2850 dollar coverage gap. A gap not found in my insurance plan and probably not yours. But under Part D, once your total drug costs hit $2,250 - you have to pay 100% of the next $2,850 in drug costs out of your own pocket before insurance kicks back in.

Dorothy Berger of Urbana, Illinois, has already fallen into the donut hole's coverage gap. She went to her pharmacy, private Part D plan card in hand, to get her monthly pain patch. "I had my $10 out to pay $8 for the patch," she recalled. "The pharmacist said no, it's $489 and some change." Says Dorothy, "This system is terrible and that's all there is to it. Whoever dreamt this up must have had a rock between their ears."

Well, Dorothy, they may have rocks in their head but they have lots and lots of money in their pockets.

The drug and insurance companies hired 952 lobbyists to pass Part D - almost 2 lobbyists per member of Congress. Not a bad investment - the top 7 health insurers alone are projected to increase revenues by $4.45 billion this year.

Tom Scully, the former Medicare director, also has money in his pocket - while he was negotiating the Part D bill for the Bush Administration, he was negotiating for employment with the health industry.

Billy Tauzin, former chairman of the Energy and Commerce Committee also helped write Part D. Now he is the head of PhRMA - the drug industry association - where he reportedly earns $2 million a year.

And those who voted for this bill also benefited. In the election cycles immediately before and after passage of Part D, the drug industry gave $47.2 million in campaign contributions - 71% went to Republicans. The Bush campaign got over $3 million from 21 health industry executives. Just another reason why we need to pass the Clean Money, Clean Elections bill - public financing for Congressional campaigns - introduced by my colleague John Tierney.

Now to the second test - do you get access to the medications you need? Once again, a failing grade.

Under Part D, each private drug company decides what drugs to cover. And guess what, a lot of senior citizens and people with disabilities aren't getting the medications they need.

In the first quarter of 2006 - the first three months of implementation - 770,998 prescriptions were not filled because the drugs were not covered by Part D plans. In each instance, a doctor decided a medication was medically necessary, a senior citizen or disabled person took their prescription to their pharmacy, and the prescription came back "claim denied."

97% of all Part D private plans require prior approval or step therapies for many medications they do cover. In case you're not up on the jargon, prior approval means the private insurance company has to sign off in advance.

A step therapy means you have to try every cheaper drug before they let you have the drug your doctor prescribed. Another barrier is volume limits - your doctor prescribes 60 pills but the private drug plan will only approve 30 pills. Not just more costly but a huge problem for frail elderly or disabled people who cannot easily get to a pharmacy.

Part D private drug plans impose those barriers but - according to a report issued by the House Government Reform Democratic staff - two-thirds of those plans can't explain how those mechanisms work when you or your doctor calls for help.

The Medicare Rights Center has been trying to help people. One call they got was from the wife of a quadriplegic and here's what she went through when she tried to get prior authorization for his drugs last month:

One day I called and spoke with 8 supervisors in the Pharmacy Review Section and every single one gave me a different answer. They just give whatever answers come out of their mouths. Meanwhile, my husband is waiting, with his breath held, for their answers. I cannot imagine someone being very ill, or very old and confused and beginning to try and get through the maze on the phone menu."

Finally, Part D flunks the 3rd test: it's not in Medicare where belongs. You can't use your Medicare card to get drug benefits. You have to purchase a private drug plan - or join an HMO. Medicare works - as you've heard from Jacob Hacker. It is a shining example of how a publicly-financed and publicly-accountable system can promote and protect the common good. So, why can't seniors and disabled people get their drug benefit through Medicare?

Because it won't let drug and insurance companies make out like bandits and because it contradicts the Republican privatization theology.

If you want a vivid example of how privatization works, just talk with your parents and grandparents who have been struggling to navigate the dozens and dozens of private Part D plans.

HHS Secretary Michael Leavitt told us that his parents didn't have these problems. He told us that he sat down with them last Thanksgiving and within 20 minutes had chosen their plan. Guess what? If they had stayed in the plan he picked out, they could have lost all of their retiree health benefits.

Ask your parents or grandparents whether they are looking forward to navigating the Part D maze again next fall and the fall after that and the fall after that, as private Part D plans leave the market, enter the market, or change the drugs they offer and the prices they charge.

Then ask them whether they wouldn't rather have a drug plan in Medicare - that is guaranteed year after year after year. Simple, affordable, and safe.

My colleagues, Marion Berry, Tom Allen and I think that is a much a better idea. We have introduced the Medicare Prescription Drug Savings and Choice Act. Senator Durbin sponsored the Senate version. Our bill is simple - provide a Medicare-administered prescription drug plan. Require Medicare negotiate for discounts. Use the savings to fill in the donut hole. I hope you will join in pushing for this bill. We have a discharge petition on the bill in the House - signed by 175 members. Speaker Hastert won't let us debate our bill - but we can force a vote if we can get 218 members to sign our petition.

We can win this fight and, when we do, we will not just improve Part D but enhance our chances of winning Medicare for All. Medicare works - which is one reason it is in the Republicans' line of fire. The Republicans didn't want a Medicare benefit because they knew it would be better and more popular than private insurance.

Medicare says that we are all in it together - and we're better off. The Republican Part D benefit says we're all in it alone - and senior citizens and disabled people are worse off.

To keep Medicare from being the foundation for universal health care, they are trying to destroy Medicare so it cannot be a model for anything.

But just like we beat them back on Social Security and will continue to do so, we will defeat their attempts to privatize Medicare.

We will fight for and win health care that is affordable for consumers and taxpayers, not a profit-making opportunity for drug and insurance companies.

We will fight for and win health care that lets doctors and patients - not insurance companies - decide what medications and what medical services we need.

We will fight for and win universal health that builds on the proven effectiveness and public accountability of Medicare. And we will win our fight by electing Democratic, progressive members to Congress who will fix Part D and set the course to achieve Medicare for All.

Change is in the wind.

Speech from http://www.house.gov/schakowsky/TakeBackAmerica_6_12_06.shtml.