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Republican Prescription Drug Proposal Fails American Seniors, Says Smith

June 28, 2000

Saying that it fails to meet the needs of seniors, Ninth District Congressman Adam Smith will oppose the Republican prescription drug proposal today.

“This plan fails on four critical fronts,” explained Smith. “It does not guarantee prescription medicine access for all Medicare recipients, it does not adequately control the spiraling costs of prescriptions medicines, the cost is unpredictable, and it is extraordinarily confusing to patients.”

Providing prescription drug benefits to seniors has risen to the top of Congress’s to-do list in recent months. Several weeks ago, the Republicans wrote a plan and introduced H.R 4680. While the Democrats have a competing plan, the House leadership will not allow a vote on the alternative plan during today’s consideration.

“I know how important it is that seniors have access to the medicines they need to stay healthy,” Smith said. “At the same time, we must ensure that we enact a common sense policy that solves problems instead of just reacting to poll numbers. I am concerned that this bill won’t do a thing to help our seniors.”

Smith says that both access and cost control are important. “This bill fails on a critical front: does it provide all Medicare recipients with access to prescription drug coverage? The answer is no,” he said. 

Under the legislation, seniors would enroll in an individual plan offered by a private insurance company. However, private insurance companies have testified to Congress that they are unwilling to offer these individual plans. “We continue to believe that the concept of so-called drug-only private insurance simply would not work in practice,” said Charles Kahn, the President of the Health Insurance Association of America, which is a group comprised of 294 insurance companies.

Scott Serota, the acting President of Blue Cross and Blue Shield, added, “This idea [a private sector drug benefit] provides false hope to America’s seniors because it is neither workable nor affordable.”

The reliance on private insurance companies to offer individual plans does not guarantee coverage for seniors, Smith notes. “We don’t know how many, if any, insurance companies would offer these drug-only plans to seniors and if they would be offered everywhere in America or just in certain regions,” he said. “Instead, Congress should pass legislation that provides a prescription drug benefit under the Medicare program, which serves all of our nation’s seniors.”

Nor does the proposal work to contain the spiraling costs of prescription drugs. “As we aim to provide access to prescription drugs, we cannot forget to also enact measures to contain costs,” Smith said. “This proposal would have seniors purchase individual plans, instead of incorporating any competitive or pooling mechanisms to keep costs down.”

Smith continued, “I don’t support government-mandated price controls on prescription drugs, but we do need to utilize purchasing power and competition to keep drugs affordable, both for seniors and for the Medicare program that will be subsidizing the drugs. I support pooling Medicare recipients and allowing several prescription drug plans to compete for their business. That will help keep costs down.”

Although the Republicans estimate the plan will cost $40 billion over five years, the costs are actually unpredictable because the subsidy to insurance companies can be flexible and the government could be required to offer plans if no insurance company opted to enter a particular region.

“Right now, we have a surplus forecasted, and I think using a portion of those funds to provide a prescription drug benefit to Medicare patients is money well spent,” Smith said. “However, the cost estimate of this plan, I believe, is unrealistically low, and if we’re going to maintain a balanced budget and pay down the debt, we need to be honest about the true cost of our policies.”

Costs to seniors are also unclear. Premiums, deductibles, and benefits could vary widely, and insurance companies may raise them far above the current estimates in order to make offering an individual plan financially worthwhile.

Finally, Smith points out that any prescription drug benefit should be easy to understand and non-bureaucratic. “Once again, the Republican plan falls short,” he said. “This proposal creates a new government agency, and seniors will have to find private drug insurance and deal with a patchwork of different plans, benefits, and availability. We should instead offer all seniors a good prescription drug benefit package as part of Medicare.”

Smith would have supported a Democratic alternative. “The Democrats came up with an alternative plan, which is not perfect in my view, but still better than the Republican plan,” he explained. However, House Leadership did not allow a vote on this proposal.

The Republican proposal is expected to narrowly pass the House this afternoon, but prospects in the Senate are unclear.

Smith Joins New Democrat Coalition To Unveil 'e-genda 2.0'

June 25, 2000

Ninth District Congressman today joined the New Democrat Coalition (NDC), a group of 65 centrist Democrats in the House of Representatives, to unveil the group’s “e-genda 2.0.”

The e-genda is a list of the NDC’s technology priorities and includes measures to improve teacher quality, expand technology education, provide greater access to overseas markets, encourage innovation, promote e-commerce, and maintain fiscal discipline.

“The e-genda outlines policies that we need to adopt in order to keep our country poised to compete in the New Economy,” said Smith. “One of the most important aspects of the e-genda is the focus on education and worker training. We have thousands of unfilled technology jobs right here in Washington state, and we need to make sure that we’re training today’s workers and educating the next generation. Enormous opportunities are provided by the New Economy, and I want to make sure that no one is left behind.”

Technology issues are critically important to the Ninth District, argues Smith. “Growth in the technology sector actually has a far bigger impact in the South Sound than it does up in Redmond and the Eastside,” Smith explained. “The Microsoft millionaires are going to be fine. What I want to do is encourage technology companies to grow and create good paying jobs in the South Sound, and that’s happening. What’s more, the entire Puget Sound economy benefits by the growth in technology and the job creation it brings.”

 

Smith Votes To Repeal Phone Tax

May 25, 2000

Ninth District Congressman Adam Smith announced today that Congress overwhelmingly passed legislation to repeal the federal telephone excise tax. Smith, an original co-sponsor of H.R. 3916, has prioritized repeal of the phone tax this year.

“We should be encouraging growth in telecommunicatons and Internet access, not taxing it,” Smith said. “I’m very pleased that this legislation was passed so overwhelmingly and seems to be on a fast track to becoming law.”

H.R. 3916 would phase out the 3 percent federal excise tax on telephone service (FETT) over three years and be completely eliminated on October 1, 2002. 

“The phone tax was originally put in place to fund the Spanish-American war,” Smith explained. “It was considered a luxury tax because so few people had phones. Obviously, the world has changed and taxing phone lines, which give Americans the opportunity to get on the Internet and take advantage of the technology revolution, just doesn’t make sense.”

Repeal of the FETT would mean a tax cut for almost every American. It would also provide a tax cut for small businesses because many businesses dedicate lines for Internet access, further increasing their tax burden because of the FETT.

“Repealing this tax is a small step forward in the effort to bring technology and the Internet to all Americans,” Smith said. “I look forward to the President signing this tax cut into law as soon as possible.”

Smith Works To Keep Medicare Providers In State

May 22, 2000

In response to concerns that managed care organizations will cease providing Medicare+Choice services to Washington seniors, Ninth District Congressman Adam Smith is urging five health care organizations to remain in the Washington state market while working with Congress and the Administration to solve the financial crisis facing the program.

Medicare patients have two enrollment choices: the traditional fee-for-service Medicare program, or a Medicare + Choice managed care organization. Proponents of Medicare+Choice argue that it lowers costs through more efficient service delivery and gives seniors more choices because plans compete for patients by offering greater benefits, such as prescription drugs. In Washington, PacifiCare, Group Health, Regence Blue Shield, Premera Blue Cross, and First Choice all offer Medicare+Choice, although only 16 of our 39 counties have the Medicare+Choice option. 

“The Medicare reimbursement rate system is unfair to Washington state,” Smith explained. “Medicare+Choice rates have always been based on the fee-for-service costs in each county, and since Washington was one of the most efficient states in Medicare service delivery we had low costs. We tried to fix this problem several years ago, but unfortunately, more needs to be done because we are still being punished for that efficiency and Medicare providers are discovering they may no longer be able to provide services in our state.”

This problem can be illustrated by comparing Pierce County Medicare+Choice reimbursement rates with Dade County (Miami), Florida reimbursement rates. A managed care organization receives a base reimbursement rate of $465.97 for a Medicare patient in Pierce County but $809.90 for a Medicare patient in Dade County. “Obviously, this disparity in payments allows seniors in Miami to receive better benefits than seniors in Pierce County, something that the seniors in the Ninth District are very aware of,” Smith noted. “It’s an unfair system that, ironically, is based primarily on how much each county had previously spent on Medicare, so states that are relatively inefficient have little incentive to cut waste and abuse while efficient states are seeing Medicare+Choice plans disappear.”

Giving seniors choices should be a fundamental part of Medicare, argues Smith. “I think it’s important that we give seniors the option of enrolling in Medicare+Choice,” said Smith. “Competing for patients can help lead to better benefits and a more efficient Medicare system.”

However, the inequality problem was exacerbated when Medicare reforms treated already-efficient states the same as inefficient states when reimbursement rates were recalculated. “Washington state was already very efficient, and there was simply very little fat to trim from Medicare in our state,” he said. “Instead, critical health care services have been scaled back and providers have stopped serving the rural regions of our state altogether.”

To combat this problem, Smith is drafting legislation to ensure Medicare+Choice can survive in efficient states like Washington and in rural areas. He is working with other Members of Congress whose districts are similarly impacted to urge House Leadership to address this issue before Congress adjourns for the year.

In the meantime, Smith is making a personal plea to the five Medicare+Choice providers in Washington state. Private health care organizations must renew their Medicare contracts by July 3, 2000 for 2001, and Smith is working to ensure that they do not abandon Washington state altogether. Smith is also asking the Health Care Financing Administration (HCFA), the agency that oversees Medicare, to implement several regulatory changes that would encourage Medicare+Choice providers to continue offering services to Washington state seniors. 

“I have asked HCFA to make a few simple changes that would hopefully encourage Medicare+Choice providers to stick around in Washington state,” said Smith. “I’m also working with the health care providers on a long-term solution to this problem and asking them to renew their contracts for 2001 while we find a solution that allows them to continue offering health care options to Washington state seniors. I don’t want to see a situation where our seniors don’t have the choice of enrolling in a managed care organization while Medicare patients around the rest of the country have that option.”

House To Pass Defense Bill

May 18, 2000

Today the House will pass the 2001 Defense Authorization bill, which includes several key prioritizes for Ninth District Congressman Adam Smith.

“The defense bill makes key investments in quality of life measures for our armed services and invests in the leap-ahead technology we need to continue having the best military in the world,” Smith said. 

The bill authorizes $309.9 billion for defense and national security in 2001. Highlights include: 

Health Care 

  • Improves heath care coverage for military personnel by extending “TRICARE Prime Remote” coverage for family members who live far from military treatment facilities and thus are not covered under the current system.
  • Phases in permanent chiropractic care for active duty military personnel over a period of five years. 
  • Restores pharmacy access to all Medicare-eligible military retirees.

Quality of Life and Retirement

  • Provides a 3.7 percent military pay raise (effective January 1, 2001).
  • Reduces out-of-pocket housing costs for military personnel to less than 15 percent.
  • Provides a targeted subsistence benefit of up to $500 per month to assist military personnel who are most in need of assistance — primarily those living on food stamps.
  • Includes authority for a thrift savings retirement plan for military personnel.

Education

  • Authorizes $35 million for the Impact Aid program, which provides supplemental money to school districts across the country that support almost 550,000 military children. 
  • Authorizes $1.4 billion for DOD Dependent schools. 

Military Housing 

  • Provides $8.4 billion for military construction – $400 million more than the President’s budget request. Importantly, more than $253 million of this increase is dedicated to quality of life improvements. 

Large scale projects

  • The F-22, which is partially produced in Tukwila, received $1.4 billion in funding for research and development, $2.1 billion for ten low-rate initial production (LRIP) aircraft and $396.1 million for advance procurement of 16 LRIP aircraft in FY02.
  • The Joint Strike Fighter, another Boeing project, received a total of $856.6 million for the Air Force and Navy Joint Strike Fighters. 
  • The President’s budget request included just $148.6 million for the Airborne Laser (ABL) program, which is a highly accurate laser carried in a modified Boeing 747-400F freighter aircraft. This represented a cut of $92.4 million. Adam worked hard to successfully restore $82.4 million of these funds. The ABL will be capable of operating at altitudes above the clouds, track hostile missiles and — at the boost phase of flight — fire the laser and destroy the missile over the launch area.

Readiness
Distance Learning Initiative
Smith worked to add $4 million for web-based distance learning courseware development – these funds will support an important pilot program at Camp Murray. Adam has long been a supporter of distance learning and of employing cutting edge technology to make military practices more efficient and cost-effective. 

Washington State has been selected by the Department of Defense (DOD) as a regional Civil Support Team (CST). As such, the National Guard is charged with supporting first responders such law enforcement and medical personnel in the event of any WMD occurrence through the entire Region X area. Accordingly, the training that the Camp Murray pilot is providing is critical National Guardsmen and women as well as to the safety of citizens in the Region X area. 

Military Construction
Ft. Lewis 
Smith secured $1.281 million for planning and design of the Combined Support and Maintenance Shop project at Fort Lewis. This center will provide service and maintenance to weapons, communications equipment and other military items. The facility will also provide the authorized maintenance work bays, functional and administrative space to support equipment readiness requirements. The current facility was constructed in 1951 to support 1940’s equipment and cannot accommodate modern equipment.

McChord Air Force Base
Smith worked to provide a total of $10.25 million for McChord Air Force Base. These funds will be used for the alteration of Nose Docks for C-17 aircraft ($3.75 million) and for a C-17 Squadron Operations/Aircraft Maintenance Unit ($6.5 million).

Procurement
C-40A
The President’s budget contained no funding the C-40A, which the Boeing Company is the primary contractor. Smith worked hard in support of this program and helped secure $54 million for one C-40A for the Naval Reserve. This aircraft is a commercial-derivative airlift aircraft used to transport high priority cargo and passengers. It will replace the Navy’s 27 year old fleet of C-9’s. The Chief of Navel Operations considered this among his top unfunded requirements. 

KC-135 re-engining
The President’s budget contained no money for reengining KC-135E’s, which provide aerial refueling capabilities for other important aircraft. In order to leverage the Air Force’s investment in these aircraft, Smith worked to secure $52 million for two reengining kits. Reengined KC-135’s are capable of shorter take-offs, offloading more fuel, operating at higher gross weights and satisfying or exceeding all noise and pollution standards. 

Supply Asset Tracking System (SATS)
Smith worked to secure $27.1 million — an increase of $12 million over FY00 levels — for SATS, an important system that fits with Smith’s desire to leverage new technology to streamline DOD practices. Through the use of commercial automated information technology, SATS empowers Air Force staff to quickly and accurately identify and locate personnel, equipment and supplies. This system enhances productivity, shortens inventory cycles, and allows real-time inventory updates. These funds will allow for continued installation of SATS in Air Force bases throughout the world.

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