Remarks Announcing a Medicare Modernization Plan

Thank you very much, and good afternoon. I would like to welcome all of you to the White House. I appreciate the presence here of Secretary Shalala, Secretary Rubin, Deputy Secretary Summers, Social Security Commissioner Apfel, OPM Director Janice Lachance. I thank all the people on the White House staff who are here who worked so hard on this proposal, including our OMB Director Jack Lew; and Gene Sperling, Bruce Reed, Chris Jennings, and of course, John Podesta.

I welcome the leaders of groups representing seniors, the disability community, and the health care industry. I would especially like to welcome the very large delegation of Members of Congress who are here today. Four of them were here at the inception of Medicare, Senator Kennedy, Congressman Dingell, Congresswoman Mink, and Congressman Conyers. This must be a particularly happy day for them.

I thank the Senators who are here, Senator Daschle, Senator Roth, Senator Kennedy, Senator Conrad, Senator Baucus, Senator Dorgan, Senator Rockefeller, and Senator Breaux.

I thank the Members of the House here. There are a large number of Democrats here, and I think virtually all the members of the leadership, Mr. Gephardt, Mr. Bonior, Congresswoman DeLauro, Mr. Frost, Congressman Rangel, Congressman Lewis. I would like to thank the Republican House Members who have come, Mr. McCrery, Mr. Whitfield, and Mr. Thomas, especially.

When Senator Breaux and Congressman Thomas issued their commission report, I said that I would do my best to build on it, that I had some concerns about it, but that I thought that there were elements in it which deserved support and serious consideration. Their presence here today indicates that we can all raise concerns about each other's ideas without raising our voices and that if we're really committed to putting our people first, we can reach across party lines and other lines to work together.

And I am very grateful for their presence here and for the presence of all the Members of Congress here from both parties. It augers well for this announcement today and for the welfare of our Republic. [Applause] Thank you.

In just a few days we will celebrate the last Fourth of July of the 20th century—223 of them. Our Government, our country was created based on the ideal that we are all created equal, that we should work together to do those things that we cannot do on our own, and that we would have a permanent mission to form a more perfect Union.

The people who got us started understood that each generation of Americans would be called upon to fortify and renew our Nation's most fundamental commitments, to always look to the future. I believe our generation has begun to meet that sacred duty, for at the dawn of a new century, America is clearly a nation in renewal.

Our economy is the strongest in decades, perhaps in our history. Our Nation is the world's leading force for freedom and human rights, for peace and security—with our Armed Forces showing once again in Kosovo their skill, their strength, and their courage. Our social fabric, so recently strained, is on the mend, with declining rates of welfare, crime, teen pregnancy, and drug abuse, and 90 percent of our children immunized against serious childhood diseases for the first time in our history.

Our cities, once in decline, are again vibrant with economic and cultural life. Even our rutted and congested interstate highways, thanks to the commitments of this Congress, are being radically repaired and expanded all across America—I must say, probably to the exasperation of some of our summer travelers.

This renewal is basically the consequence of the hard work of tens of millions of our fellow citizens. It is also, however, clearly the result of new ideas and good decisions made here in this city, beginning with the fiscal discipline pursued since 1993, the reduction in the size of Government, and controlling spending while dramatically increasing investments in education, health care, biomedical research, the environment, and other critical areas. The vast budget deficits have been transformed into growing budget surpluses, and America is better prepared for the new century.

But we have to use this same approach of fiscal discipline plus greater investment to deal with the great challenge that we and all other advanced societies face, the aging of our Nation, and in particular, to deal with the challenge of Medicare, to strengthen and renew it.

Today I asked you here so that I could announce the details of our plan to secure and modernize Medicare for the 21st century. My plan will use competition and the best private sector practices to secure Medicare in order to control costs and improve quality. And it will devote a significant portion of the budget surplus to keep Medicare solvent.

But securing Medicare is not enough. To modernize Medicare, my plan will also create a much better match between the benefits of modern science and the benefits offered by Medicare. It will provide for more preventive care and help our seniors afford prescription drugs. The plan is credible, sensible, and fiscally responsible. It will secure the health of Medicare while improving the health of our seniors. And we can achieve it.

The stakes are high. In the 34 years since it was created, Medicare has eased the suffering and extended the lives of tens of millions of older and disabled Americans. It has given young families the peace of mind of knowing they will not have to mortgage their homes or their children's futures to pay for the health care of their parents and grandparents. It has become so much a part of America, it is almost impossible to imagine American life without it. Yet, life without Medicare is what we actually could get unless we act soon to strengthen this vital program.

With Americans living longer, the number of Medicare beneficiaries is growing faster, much faster than the number of workers paying into the system. By the year 2015, the Medicare Trust Fund will be insolvent, just as the baby boom generation begins to retire and enter the system and eventually doubling the number of Americans who are over 65.

I've often said that this is a high-class problem. It is the result of something wonderful, the fact that we Americans are living a lot longer. All Americans are living longer, in no small measure because of better health care, much of it received through the Medicare program. President Johnson said when he signed the Medicare bill in 1965, "The benefits of this law are as varied and broad as the marvels of modern medicine itself." Yet modern medicine has changed tremendously since 1965, while Medicare has not fully kept pace.

The original Medicare law was written at a time when patients' lives were more often saved by scalpels than by pharmaceuticals. Many of the drugs we now routinely use to treat heart disease, cancer, arthritis, did not even exist in 1965. Yet Medicare still does not cover prescription drugs.

Many of the procedures we now have to detect diseases early, or prevent them from occurring in the first place, did not exist in 1965. Yet Medicare has not fully adapted itself to these new procedures.

Many of the systems and organizations that the private sector uses to deliver services, contain costs, and improve quality, such as preferred provider organizations and pharmacy benefit managers, did not exist in 1965. Yet, under current law, Medicare cannot make the best use of these private sector innovations.

Over the last 6 1/2 years, we have taken important steps to improve Medicare. When I took office, Medicare was scheduled to go broke this year. But we took tough actions to contain costs, first in '93 and then with a bipartisan balanced budget agreement in 1997. We have fought hard against waste, fraud, and abuse in the system, saving tens of billions of dollars.

These measures have helped to extend the life of the Trust Fund to 2015. But with the elderly population set to double in three decades, with the pace of medical science quickening, we must do more to fully secure and modernize Medicare for the 21st century.

The plan I release today secures the fiscal health of Medicare, first, by providing what every objective expert has said Medicare must have if it is to survive, more resources to shore up its solvency. As I promised in the State of the Union Address, the plan devotes 15 percent of the Federal budget, over 15 years, to Medicare—Federal budget surplus. That is the right way to use this portion of the surplus.

There are a thousand ways to spend the surplus, all of them arguably attractive, but none more important than first guaranteeing our existing obligation to secure quality health care for our seniors. First things, first. [Applause] Thank you.

In addition to these new resources, we must use the most modern and innovative means to keep Medicare spending in line while rigorously maintaining, indeed, improving quality. So the second part of the plan will bring to the traditional Medicare program the best practices from the private sector. For instance, doctors who do a superior job of caring for heart patients with complex medical conditions will be able to offer patients lower copayments, thus attracting more patients, improving more lives, saving their patients and the system money.

Third, the plan will use the forces of competition to keep costs in line, by empowering seniors with more and better choices. Seniors can choose to save money by choosing lower cost Medicare managed care plans under our plan, without being forced out of the traditional Medicare program by larger than normal premium increases. And we will make it easier for seniors to shop for coverage based on price and quality, because all private plans that choose to participate in Medicare will have to offer the same core benefits. Consumers shouldn't be forced to compare apples and oranges when shopping for their family's health care.

Fourth, we will take action to make sure that Medicare costs do not shoot up after 2003, when most of the cost containment measures put in place in 1997 are set to expire. And to make sure that health care quality does not suffer, my plan includes, among other things, a quality assurance fund, to be used if cost containment measures threaten to erode quality. And given the debates we're having now on the consequences of the decisions we made in 1997, I think that is a very important thing to put in this plan. [Applause] Thank you.

These steps will secure Medicare for a generation. But we should also modernize benefits as well. Over the years, as I said earlier, Medicare has advanced—medical care has advanced in ways that Medicare has not. We have a duty to see that Medicare offers seniors the best and the wisest health care available.

One such rapidly advancing area of treatment is preventive screening for cancer, diabetes, osteoporosis, and other conditions, screenings which if done in time can save lives, improve the quality of life, and cut health care costs. Therefore, my plan will eliminate the deductible in all copayments for all preventive care under Medicare. It makes no sense for Medicare to put up roadblocks to these screenings and then turn around and pick up the hospital bills that screenings might have avoided. No senior should ever have to hesitate, as many do today, to get the preventive care they need.

To help cover the cost of these and other crucial benefits and strengthen the Medicare part B program, we will ask beneficiaries to pay a small part of the cost of other lab tests that are prone to overuse, and we will index the part B deductible to inflation.

Nobody would devise a Medicare program today, if we were starting all over, without including a prescription drug benefit. There's a good reason for this: We all know that these prescription drugs both save lives and improve the quality of life. Yet, Medicare currently lacks a drug benefit. That is a major problem for millions and millions of seniors, and not just those with low incomes. Of the 15 million Medicare beneficiaries who lack prescription drug benefits today, nearly half are middle class Americans. And with prescription drug prices rising, fewer and fewer retirees are getting drug coverage through their former employers' health programs.

My plan will offer an affordable prescription drug benefit to all Medicare recipients, with additional help to those with lower incomes, paid for largely through the cost savings I have outlined. It will cover half of all prescription drug costs, up to $5,000 a year, when fully phased in, with no deductible—all for a modest premium that will be less than half the price of the average private Medigap policy. It's simple: If you choose to pay a modest premium, Medicare will pay half of your drug prescription costs, up to $5,000. This is a drug benefit our seniors can afford at a price America can afford.

Seniors and the disabled will save even more on their prescription drugs under my plan because Medicare's private contractors will get volume discounts that they could never get on their own. By relying on private sector managers, I believe that my plan will help Medicare beneficiaries and ensure that America continues to have the most innovative research and development-oriented pharmaceutical industry in the world.

With the steps I have outlined today, we can make a real difference in our people's lives. And I believe the good fortune we now enjoy obliges us to do so. In a nation bursting with prosperity, no senior should have to choose between buying food and buying medicine. But we know that happens. I'll never forget the first time I ever met two seniors on Medicare who looked at me and told me that they were choosing, every day, between food and medicine. That was almost 7 years ago, but it still happens today.

At a time of soaring surpluses, no senior should wind up in the hospital for skimping on their medication to save money. But that also happens today, in 1999. At a moment of such tremendous promise for America, no middle-aged couple should have to worry that Medicare will not be there when they retire, that a lifetime's worth of investment and savings could be swallowed up by medical bills. If we want a secure life for our people, we must commit ourselves, as a country, to secure and modernize Medicare, and to do it now.

In the months before the election season begins, we can put partisanship aside and make this a season of progress. With our economy strong, our people confident, our budget in surplus, I say again, we have not just the opportunity but a solemn responsibility to fortify and renew Medicare for the 21st century.

It's the right thing to do for our parents and our grandparents. It's the right thing to do for the children of this country. It is the right thing to do so that when we need it, the burden of our health care costs does not fall on the children and hurt their ability to raise our grandchildren.

Like every generation of Americans before us, our generation has begun to fulfill our historic obligation to strengthen our fundamental commitments and keep America a nation of permanent renewal. Just a few days before our last Independence Day of this century, let us commit again to do that with Medicare.

Thank you, and God bless you.