    [Public Papers of the Presidents of the United States: William J. Clinton (1995, Book II)]
    [September 20, 1995]
    [Pages 1397-1403]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks and a Question-and-Answer Session at the Little Sisters of the
    Poor Home for the Aged in Denver, Colorado
    September 20, 1995

        The President. The reason I wanted to come here today is because by
    coming I hope to honor the work that this home has done and also to
    point out how dramatically our Nation has been able to improve care for
    elderly people in the last several years because of the commitments we
    have made through the Medicare and Medicaid program.
        And as you know, there's a big debate in Washington going on now
    about balancing the budget and what we have to do to balance the budget.
    And the health care programs have been the fastest growing part of our
    budget, just as they've been the fastest growing part of a lot of
    families' budgets--the cost of health care. So I strongly believe we
    should balance the budget, and I believe we have to lower the rate of
    growth in health care spending. But the real question is, how do you do
    it?
        And the Medicaid program I think is particularly important because
    70 percent of the people who receive the benefits are elderly and
    disabled people who live in places like this. And the program is funded
    between 50 and 80 per-

    [[Page 1398]]

    cent, depending on the State, by the Federal Government, and the State
    government makes up the rest. And it's administered by the Governors.
    Governor Romer is here, and he and I worked together for years when we
    were both Governors on this.
        But one of the congressional proposals we believe--he and I
    believe--would cut the Medicaid spending by so much that it would
    endanger the ability of our country to care for every eligible person
    and to maintain the high quality of care. You know, when President
    Reagan--this has been a bipartisan issue, I should add, until this very
    moment. In 1987, President Reagan signed a law that many of us who were
    Governors strongly supported, upgrading the standards of care in
    residential facilities. You remember that.
        Before that, as many as 40 percent of the people, elderly people in
    residential facilities in this country, were over-medicated, were often
    unnecessarily physically restrained. It was a very different situation,
    not here, but in other places in these for-profit homes. And since then,
    there's been this dramatic improvement in care. Now, the Congress did
    make some mistakes, and we've largely corrected them, I think, in the
    last 3 years, in trying to make sure that the program grew at a
    manageable rate.
        But with more people living longer and more and more people becoming
    eligible for Medicaid, for this kind of care, I think it is very, very
    important that we recognize that we have two fundamental moral
    obligations here.
        I think we're obligated to balance this budget to take the debt off
    our children and grandchildren, but we're obligated to do it in a way
    that represents--that reflects our responsibility to our parents and
    grandparents. And in doing the right thing by America across the
    generations, it's not always easy, but it's clearly one of our most
    important obligations.
        And of course, as all of you know, the families--if we were to have
    a budget in place in the National Government which would make hundreds
    of thousands of people over the next 7 years ineligible for support in
    nursing homes and millions of people ineligible for help for home care,
    it would have a drastic impact not only on the senior citizens but on
    their children.
        So I wanted to come here just to highlight to America not only the
    magnificent work being done here by Mother Patricia and others but to
    talk about what's being done all over America and how we have to find a
    way to balance the budget without wrecking the system that makes this
    kind of thing possible.
        I think it must be very rewarding for all of you to know that not
    only that this place exists for you, but there are places like this all
    over America where people can live in dignity and security and have not
    only their health care but their emotional needs met.
        So that's why we're here. And I'd like to--perhaps the Governor
    would like to say something, but I'd like to spend whatever time I can
    listening to you talk a bit.

    [At this point, Gov. Roy Romer of Colorado advocated a national floor
    for Medicare and Medicaid so States would provide the same minimum
    standard of care.]

        The President. I should say, just to explain what the Governor said,
    yesterday the House of Representatives seemed to be embracing--the
    majority of the House of Representatives seemed to be embracing a plan
    where the Federal Government would just send every State a check for the
    next 7 years and cut what we project to spend on Medicaid by about a
    third, give them a third less and tell them to do whatever they wanted
    to with the money, which means that now we have a more or less uniform
    system. That is, States can provide more services, if they like, to
    seniors or to poor children under Medicaid, but there is a floor below
    which they can't go, which means that as more and more families move
    across the country and live in different places, it means that their
    parents and grandparents can live anywhere they want with them, be in
    any kind of facility and know that at least within some limits, they'll
    be treated equally across the country. That's the point the Governor is
    trying to make.

    [A participant described the service her organization performed for
    seniors to ensure their independence and dignity and stated that
    Medicaid was essential. She then explained that she became involved
    because she was inspired by Mother Patricia Friel, administrator, Little
    Sisters of the Poor Home for the Aged.]

        The President. She's an inspiration to me. I think I might--
    [laughter]--I'm interested in living to be 90 now. Before I got here
    this morning, I didn't know. [Laughter]
        Let me say that our best estimates are--the proposal that I made
    would basically slow the

    [[Page 1399]]

    rate of growth of spending and require some real discipline on the part
    of the States. But it is about a third as costly as the congressional
    proposal. We estimate the congressional proposal could keep, within 7
    years, 300,000 people who are now eligible out of nursing homes and over
    a million people who are now eligible from getting home health services.
        And of course, obviously, with people--the fastest growing group of
    people in America today by percentage are people over 80. And more and
    more of them are able to live at home because we're learning so much
    more about what it takes to stay healthy, stay fit. As you know--you're
    working with them--it would be, I think, a terrible mistake, indeed,
    even a terrible economic mistake to do anything that would undermine our
    ability to support home care.

    [A participant explained that helping senior citizens to remain
    independent was more cost-effective and allowed them their dignity.]

        The President. Since you made that point, I'd like to, if I might,
    just interject one thing that I've not seen in any coverage of this
    anywhere. And I'm not faulting the press; I think it's something that
    none of us have really thought to emphasize. But, Roy, a lot of these
    programs where some of the people are on Medicaid and some aren't depend
    on the Medicaid money, in effect, to subsidize the service of the
    others. So the number of people who could be losing the benefits of this
    could be far greater than the number of people in Medicaid because of
    that.
        As you also know, Medicaid for the last several years has provided
    help to low-income elderly people to help them buy into Part B of
    Medicare. So also, another thing that will happen, I believe, is that we
    could be getting very false savings by all of a sudden having elderly
    people drop out of Part B of Medicare, and it looks like we're spending
    less money on Medicare, so they don't get regular care, and then we wind
    up aggravating a problem we already have, which is spending too much
    money on intensive care when people are desperately ill and maybe
    nothing can be done.
        I'm glad you brought that up because I hadn't thought to mention
    that to anyone in this whole debate. But I know it to be true from my
    own experience as a Governor. We had lots and lots of programs where
    Medicare--we put in a little money, let's say, for half the people, and
    the other half of the people, maybe they could come up with a little
    something, but they really basically got to be served at a discount
    because Medicaid was there.
        What about you?

    [A participant described how a cutback in Medicaid would affect her
    family and asked if the working class would be the only group affected
    by the changes.]

        The President. The answer is, I think, to be perfectly accurate, I
    think there is--a small part of the savings would come from charging
    wealthy retirees and their families significantly more for a part of
    Medicare. And in that sense, in an atmosphere of cutbacks, that was a
    part of the plan that I offered last year when I was trying to get
    universal health care coverage. But the vast, vast majority of the
    burden will be borne by the middle class and by lower income elderly
    people and their families, because they tend to rely--first of all, you
    have to be of a certain income level to be eligible for Medicaid. And
    secondly, in Medicare--75 percent of the people on Medicare have family
    incomes of under $24,000.
        And again, I think this becomes a moral question. If the whole thing
    were going broke and we couldn't do it, we would all have to look at
    whatever options were available, where what we need to do is to fix and
    reform these systems in a disciplined way so they'll be there from now
    on. And we can do that without causing the kind of havoc that's going to
    be visited on average people's lives, I think.
        One of the reasons I wanted you all to be here is I want people to
    understand that this is a thing that has family impact.

    [Governor Romer explained that Colorado calculations showed the
    congressional proposal would increase costs to the State by $40 to $50
    million at a time when the State had planned to increase education
    expenses by the same amount, forcing the State to choose between
    education and health care.]

        The President. In other words, the Congress is taking the position
    that they'll just give this arbitrary cut to the States, and they are
    sure they'll be able to just manage the program better. But the truth
    is, they'll be making decisions just like you will be. Children will be
    making decisions between their parents and their own

    [[Page 1400]]

    kids, between their health care and their parents and the education of
    their children. States will be making decisions between the health care
    of their elderly citizens and the education of their children in a much
    more extreme way than in our experience.
        And again, I would say, if it were absolutely necessary to either
    save Medicare or Medicaid or to balance the budget, it would be one
    thing. But it is not necessary. There are many options to balance the
    budget and preserve what you are celebrating here around this circle
    this morning.
        Would you like to say anything?

    [A participant suggested that the money being spent on Medicaid and
    Medicare be invested.]

        The President. You mean invested by the Government?
        Q. Yes.
        The President. Well, one of the things that they propose to do, that
    they're trying to do, the Congress is trying to do, is to allow people
    to invest some of their money that would otherwise go into Medicare and
    Medicaid into a medical savings account.
        The problem with doing it that way--I'll answer your two questions--
    and I've thought of both things. I think a medical savings account, by
    taking some of the money that would have gone into Medicare-Medicaid,
    giving it to citizens, letting them invest it in a medical savings
    account, the good thing about that is that you might be able to get a
    higher rate of return than the Government gets a--I mean, we invest
    essentially in Government securities. The problem is that it only works
    if you happen to be a healthy elderly person, if you see what I mean. In
    other words, if you have a period of long-term health where you're
    investing and earning, you do great. If you get sick in a hurry, where
    you have to draw down, you'll be in the hole, which is why we have
    programs for the whole society. So the medical savings account may be
    something that we ought to explore and experiment with, but it will
    always, I'm convinced, be sort of an add-on, a marginal support for what
    needs to be a fundamental program.
        The problem with the Government investing in mutual funds is--knock
    on wood, I hate to say this since the stock market has gone up so much
    since I've been President--is that it's fine if we get a higher rate of
    return than we get from Government securities, but the problem is you
    have to be taking money out on a regular basis, as you know, to fund a
    health care program, and sometimes the stock market's going up and
    sometimes it's going down and when the time came for our quarterly
    withdrawal if there had been a 50-point drop the day before in the stock
    market, we could be really in deep trouble, which is why we've always
    relied on the basic steady but lower rate of return from Government
    securities when we invest in them.
        Q. Can you do half-and-half?
        The President. Well, I don't know. The problem is--another problem
    is, because we've been running a deficit, is that we have to have the
    money to basically, in effect, to finance our own deficit. It may be an
    option, but I think that's something--that's one thing that States will
    be able to look at if they have some more flexibility here.
        But the problem is, when you make those investments in mutual funds,
    the thing that really makes it go is if you believe there is a long-term
    trend in the stock market, you have to have the flexibility, just like
    an individual investor, of when to withdraw. In other words, the
    investor decides when to withdraw. So if you lose money, you say, ``Oh,
    it's awful, but thank goodness I don't have to cash my stocks in. I
    think there will be a turn.'' Even after October '87, the people who
    could ride it through if they could wait a year or two, were making a
    profit again. But the Government, we'd have to withdraw these funds on a
    regular basis to pay our bills, so that is the risk inherent in that.
        Q. Well, according to the trustees' report, though, if we go with
    your plan, we'll be out of money like 2005, and the Republican plan
    would be 2015.
        The President. The trustees haven't said that yet. It depends on
    what the Republicans do. If the Republicans have all of their Medicare
    cuts coming out of doctors and hospitals, they could stretch it to 2015,
    but the general conclusion of the health care community is that if they
    did that, they would be closing large numbers of health care facilities,
    and a huge number of doctors would simply opt out of the program. So
    that's why they've got a problem. They actually adopt--right now, they
    adopt cuts in the hospital program--the Part A--about the same size as
    ours. But they have this $90-billion amorphous amount of money that they
    can't say how

    [[Page 1401]]

    they're going to save yet. So they can't go any further than we do
    unless they take more money away from the hospitals and doctors.
        My problem is that--let me just back up and say, my problem in this
    whole thing is, when we put our budget together, we asked the following
    questions to the best of our ability. We asked the substantive
    questions. How much can we take out of Medicaid over the next 7 years
    without having doctors opt out or closing hospitals that need to stay
    open or really damaging the elderly in the country? How much can we cut
    Medicare over the next 7 years without really hurting the hospitals and
    the medical delivery system that depends on it? Let's squeeze it as hard
    as we can. That's what we did.
        What they did was to say, ``We promised to balance the budget and
    give a $250-billion tax cut to the American people. How much do we have
    to cut Medicare and Medicaid to meet that number?'' It seems to me that
    once you commit to an end of balancing the budget, then you have to say,
    how can you balance the budget consistent with how much money you can
    take out of the health care system?
        What they said is, ``Here is our target date. Here's how much of a
    tax cut we're going to give. Therefore, we're going to take $450 billion
    out of the health care system.'' And I think that, frankly, they have no
    idea whether they can do that. They don't know what the system will
    bear. And I think it's far better to be more disciplined about it and
    take a little bit longer and know that you're not going to upset this
    complex of relationships here that have developed. If you do that, you
    can always experiment with the medical savings accounts; you could
    always experiment with alternative investments; you could always do
    these things. But you have to realize that these people, they have to
    get up and run this place tomorrow.
        Q. That's right.
        The President. And the hospital downtown, they have to get up and
    run those places. I mean, their lives go on. And some decision we make
    in Washington may or may not be consistent with the reality of what it
    takes to run the place. That's what we're trying to struggle with there.

    [The participant described the percentage of the budget which should not
    be cut and then asked why cuts could not come from the remaining
    percentage, like tobacco subsidies.]

        The President. Well, one thing, there is a lot cut out of that, a
    great deal being cut out of that. And a lot of that is----
        Q. How about more?
        The President. But a lot of what's left is education and
    infrastructure and the things that grow the economy. Again, you have to
    understand, I think the issue is: What are our objectives here? If our
    objectives are to balance the budget, secure the financial integrity of
    Medicare so that it's there from now on, and invest enough in Medicaid
    and Medicare to make sure that the fundamental mission can be achieved
    as we slow the rate of inflation growth, and then the rest of your money
    we should spend to provide the national defense and to grow the economy
    and to help people help themselves. Then we should put all that together
    and come out with a plan to balance the budget as quickly and as well as
    we can.
        But they did it backwards. They said, ``We promise to balance it in
    7 years and to give a $250 billion tax cut--this is how much we have to
    cut this other stuff--and to increase investment in defense to build new
    weapons systems.''
        And I just believe that--believe me, we are looking at all possible
    alternatives. I have already passed--the first 2 years of my Presidency
    with the previous Congress, they took the deficit from $290 billion to
    $160 billion; they added 3 years to the life of the Medicare Trust Fund;
    they voted to reduce the Government to its smallest size since John
    Kennedy was President. I mean, it is the first time in decades that we
    have actually reduced that other part of the budget, dramatically.
        But that other part of the budget also includes things that will
    really shape our children's future: research and development, investment
    in technology, medical research, a whole range of things. It's now a
    much smaller part of our budget than it used to be. Most of what we
    spend money on today is Medicare, Medicaid, Social Security, and
    defense.
        Now, the other thing you should know if it weren't for--to make the
    point further about how much we've been cutting--if it weren't for the
    interest on the debt we pay today for the debt run up between 1981 and
    the day I became President in 1993, the budget would be in balance
    today. So there really is an argument for trying to bring this budget
    into balance so you stop wasting so much money on interest

    [[Page 1402]]

    and start freeing it up. And we are doing our best to cut these other
    things.
        For example, the tobacco program--and you know I'm the first sitting
    President ever to take on this issue to try to limit teenage smoking,
    and I'm in a big struggle with tobacco companies. But you should know
    that the tobacco program itself is self-financing. There is no direct
    Government subsidy to tobacco farmers. They pay a fee, and then it
    rotates back there. So it's a self-financing program. The only
    expenditure the Government has, I think, is for whatever administrative
    costs the Department of Agriculture has to administer the program, which
    is not--it's a very small amount of money.
        And believe me, I tried to raise the cigarette tax to help pay for
    health care last year, so I'm open to that. But there's just not much
    money there.

    [A participant expressed concern about fraud and abuse on the part of
    the providers.]

        The President. That's correct. There has been a substantial amount
    of fraud and abuse on the part of providers. And the General Accounting
    Office of the Congress has estimated that it may be as much as, in some
    years, 10 percent of the total cost, which is a lot of money. So, to try
    to address that, we have tripled the number of FBI agents that are
    working on health care fraud and we have doubled the number of
    prosecutions of serious Medicare and Medicaid fraud. And that's
    beginning to make a big difference.
        And that's one of the ways that we proposed to meet the inflation
    targets. If you can take that out of the system, you can continue to
    give homes like this one an adequate return through Medicaid to do the
    work that they have to do. That's what we're--but you're absolutely
    right; in terms of the recipients, there is no question of fraud. You
    never have any questions about Medicare and Medicaid eligibility the way
    you do the Food Stamp Program, for example, which, by the way, we're
    also doing a better job of--food stamp rolls are down, and we're getting
    a hold of that.
        But since you're eligible here by age in Medicare, or by age and
    income in Medicaid, it's a much clearer situation. And you're right,
    it's very hard to abuse the program,

    [A participant explained how excessive regulations interfered with
    quality respite care.]

        The President. You mean you can't just do that, having met the
    standards of running this operation?

    [The participant explained that eliminating unnecessary regulations
    would help to ensure that senior citizens received good respite care
    while their families were away.]

        The President. You know, no one has ever mentioned this to me
    before. This is very interesting, and I'm somewhat embarrassed to say
    it's never occurred to me before. It's a great idea.
        Let me ask you, if you wouldn't mind, would you be willing just to
    put on paper for me the kinds of things that you think ought to be
    changed, that you think would facilitate you doing this kind of thing?
    I'd be happy to see what I could do, because we are really working
    hard--we have already abolished 16,000 pages of Federal regulation. And
    we're trying to do a lot more, because I think a lot of things are over-
    regulated and they focus too much on input rather than evaluating the
    results. If you get good results--as a matter of fact, this is--I don't
    know why we shouldn't do it in this context, but we are now picking 50
    big companies in the country for a new experiment on clean air. And if
    they tell us that they will meet the clean air requirements of the law
    and be tested on a regular basis, we'll let them throw the rulebook away
    for figuring out how to do it. In other words, if they can figure out
    how to do it cheaply and more efficiently than all the rules and
    regulations, they can just ignore them, because all we care about is
    whether the air is clean.
        So those are the kinds of things that I think we ought to be looking
    at. So if you would send me that suggestion I would be very, very happy
    to--if you could also send a copy to the Governor, because some of those
    things may be things that are within the State's ability to deal with
    rather than the Federal Government.

    [A participant described the respite care program offered by the Little
    Sisters of the Poor.]

        Governor Romer. Do you have a program for Governors? [Laughter]
        The President. You know, Roy and I would like a little respite care
    here. [Laughter]
        We'll be back in a month.

    [Mother Patricia Friel asked for concluding remarks. A participant
    described her life at the

    [[Page 1403]]

    home and indicated that it would not have been possible without Medicare
    and Medicaid.]

        The President. Would you like to say anything before we go?

    [A participant described the impact of Medicare and Medicaid on her
    life.]

        The President. I don't know what we'd do if it weren't for people
    like you who would work until you're 74. Bless you. Thank you.

    [Archbishop Francis Stafford of the Denver archdiocese thanked the
    President and the participants.]

        The President. Let me also tell you just one thing. We're going to
    do our best in the next 2 months not to play politics with your lives. I
    mean, not to unduly aggravate the differences, not to--I'm going to do
    my best to get an agreement here that will give the country the
    confidence that we can balance our books and go on into our future but
    that also will give you the confidence that you can educate your son and
    not worry about your mother. I believe it can be done.
        But I believe we have to look realistically, and we have to do it
    from the bottom up. We have to know what is possible, and that's why I
    wanted to meet here today. And we're going to explore every conceivable
    alternative. But in the end, we need to--places like this need to do
    well, and programs like yours, helping people stay home and running
    respite care, they need to do well, because we're all going to be--this
    country is going to get older, and people are going to live longer, and
    that is a good thing. It is a good thing, not a bad thing. We just have
    to find a way to manage it, and it's a new thing.
        Governor Romer. Mr. President, you're not going to have a chance to
    see this whole facility. I've just been staring at this floor. I don't
    know----
        The President. Amazing, isn't it?

    [Governor Romer and Mother Friel made brief concluding remarks.]

        The President. Thank you very much.

    Note: The President spoke at 9:43 a.m. in the first floor lounge.