[Public Papers of the Presidents of the United States: William J. Clinton (1995, Book II)]
[September 19, 1995]
[Pages 1383-1389]
[From the U.S. Government Publishing Office www.gpo.gov]



Remarks in a Roundtable Discussion With Senior Citizens in North Miami 
Beach, Florida
September 19, 1995

    The President. Thank you for taking a little time to meet with me 
and the Governor today. I wanted to just say a few words. First of all, 
let me thank Governor Chiles for being here. You know, when he was a 
Senator, he was the chairman of the Budget Committee, so he knows a lot 
about what we're going through in Washington.
    Gov. Lawton Chiles. These people knew me when I had the Aging 
Committee, before I had the pleasure to know you. [Laughter]
    The President. That's right. Before you were aging. [Laughter]
    I'd like to just talk for a couple of minutes and then spend the 
rest of the time listening to you, trying to answer your questions or at 
least hearing your concerns about this. You all know we're in a major 
debate in Washington about balancing the budget, and we're trying to 
balance the budget. I think that's a good thing to do. Our country never 
had a permanent deficit in our Government accounts until the 12 years 
before I became President, and I've tried to change that.
    When I became President, the annual deficit was $290 billion a year; 
we've now got it down to $160 billion a year. That's a huge decrease in 
only 3 years, and I'm proud of that. But we have to ask ourselves now 
that we're going to go all the way and balance this budget, why are we 
doing it, and how are we going to do it in a way that reflects our basic 
values as Americans, our sense of personal responsibility, our sense of 
family responsibility, our respon-


[[Page 1384]]

sibility to our communities? And maybe most important, what are the 
obligations we owe to each other across generational lines and across 
income lines in America? How can we balance the budget in a way that 
permits us to honor these values and these obligations?
    We want to balance the budget because we'd like to take this debt 
off of our children and grandchildren, because we would like not to 
spend so much money every year paying off interest on the debt so we'd 
have more money to invest in things like education and health care and 
the economy, but we have to do it in the right way.
    Now, I have offered the Congress a balanced budget that increases 
our investment in education, because I think we owe the next generation 
quite a lot--in a global economy they'll need more education and because 
so many of our children, particularly poorer children, need the tools to 
work themselves into the middle class. I have offered a balanced budget 
that continues our fundamental obligations to clean air, clean water, 
safe food, public health, and the environment. And I have offered a 
balanced budget that deals with the need to slow the rate of growth in 
medical expenses so that health care does not consume the entire budget 
and does not take more and more of our income and more and more of your 
income.
    Now, in addition to that, there is this issue with the Medicare 
Trust Fund, which the congressional majority, the Republican majority, 
has made a great deal of. But I'd like to talk a little about the 
Medicare Trust Fund and what its relationship is to the budget, and then 
we can hear from you.
    The Congress has proposed to balance the budget in 7 years and to 
pay for a $250 billion tax cut and to cut Medicare by about $270 billion 
over that 7-year period and to cut Medicaid by about $180 billion over 
that 7-year period.
    My proposals, which balance the budget in 10 years with a much 
smaller tax cut, have a Medicare reduction that's less than half of 
theirs and a Medicaid reduction that's about a third of theirs. Now, if 
you hear them talk, they will say two things. They will say, first of 
all, ``We're not cutting anything; we're just slowing the rate of 
inflation in these programs.'' And secondly, they'll say, ``We have to 
cut Medicare because it's necessary for the Trust Fund.'' So I would 
like to deal with both of those issues if I might.
    First of all, on the Trust Fund, there's a legitimate issue with the 
Trust Fund. Our administration brought it up in '93 and in '94 in the 
health care debate. And many of the same people who are saying we have 
to cut Medicare by $270 billion today were denying that we could have 
any reductions at all just last year and denying that there was big 
problem with the Trust Fund. But there is a problem with the Trust Fund. 
And so our obligation, not only to the people on Medicare today but to 
the people we want to have Medicare in the future, our obligation is to 
fix the Trust Fund.
    The actuaries say that we need to put about $90 billion into fixing 
the Trust Fund. That is, if we put $90 billion in, we will secure it for 
another decade, and during that decade, we'll have time to figure out 
what we're going to do when all the baby boomers retire and they get on 
Medicare because then there will be a lot more people on Medicare.
    But neither proposal really deals with that. We're just talking 
about how to add a few more years, 10, 11, 12 years to the Trust Fund. 
My proposal takes it out 11 years from today. And that's better than 
we're been doing in most of the last 15 years. My proposal does it by 
recognizing that the Trust Fund essentially provides hospital care and 
other services and is paid for essentially by asking the providers to 
take less money in the future and by cracking down on fraud and abuse.
    And by the way, we have a study which says that Medicare fraud and 
abuse is about 10 percent of our total cost. And we have the United 
States Attorney here for this part of Florida, and he can tell you what 
we're trying to do in Florida. But we have doubled the prosecutions on 
fraud and abuse, we have assigned 3 times as many FBI agents to try to 
crack down on fraud and abuse as any previous administration, and we've 
brought in more money from people who are skimming the system illegally 
than ever before. So there is a lot of money there. And we can do that.
    Their proposal would ask the beneficiaries of the system to pay 
more, dramatically more. And it's important that you realize that in 
their Medicare cuts, about half of them will be absorbed by providers or 
by improvements in fraud and abuse, but about half of them will come 
from beneficiaries. And none of that money goes into the Trust Fund. So 
let's get that on the table. This has nothing to do with the Trust Fund.

[[Page 1385]]

And the only way you can get money from beneficiaries is either to 
charge more or give fewer services or serve fewer people. And that all 
goes into the budget.
    Now, on Medicaid, 30 percent of Medicaid goes to care for poor women 
and their poor children, but 70 percent of it goes to pay for health 
care for the elderly and the disabled. So this dramatic Medicaid cut, 
since the elderly people who get that are disproportionately low income, 
will have to either be paid for by their children or it means that we're 
going to serve fewer people. There will be fewer people in nursing 
homes, fewer people getting in-home services and things of that kind.
    You just simply can't decree that the rate of medical inflation will 
go down to the level they say it will, because we have more and more 
older people coming onto the system all the time and, thank goodness, 
living longer and living better.
    So what we need to do is to find the right way to balance the 
budget, in a way that preserves the Medicare Trust Fund and extends it 
for at least a decade but does not, does not, cripple the health care 
system for today's elderly and those who will be coming on in the next 
decade. Seventy-five percent of the people on Medicare live on less than 
$24,000 a year.
    So I say to all of you, we need to be open to changes in the 
system--we can't continue to let it grow at 10 percent a year--but we 
need to do it in a way that recognizes our obligations across 
generational lines and across income lines. And we have to be very 
careful before we approve of a system that would cost our seniors a huge 
amount more or cause them to have to give up medical services in order 
to fund tax cuts that go to people like me who don't really need it--and 
haven't asked for it, to be fair, haven't asked for it.
    So my point is we can have a tax cut if we target it toward raising 
children and educating people and middle income people who need it. We 
can have a balanced budget and we can fix the Medicare Trust Fund and we 
can do all of that without imposing undue burdens on Medicare and 
Medicaid recipients who simply cannot afford it. And that's the trick. 
That is what our obligation ought to be.
    And I believe that a proposal that would basically reduce future 
spending in health care by $450 billion, almost half a trillion dollars, 
you're either going to--you're going to do one of two things: You're 
going to either close a lot of hospitals in rural areas and urban areas 
and teaching hospitals and take a lot of doctors out of the system who 
won't serve anymore, or you're going to hurt the beneficiaries either by 
charging them more than they can afford or simply by not serving a lot 
of elderly people anymore.
    So that's the point I've been trying to make going around America. 
We all have an obligation to fix the Trust Fund, but the proposals in 
Congress go way beyond that. About half the money in Medicare will go to 
fix the Trust Fund; the other half goes to their balanced budget tax cut 
plan. And there's no way around it; that's just the fact. And I just 
don't think that's right.
    Governor, do you want to say anything?

[At this point, Governor Chiles explained that Florida would be greatly 
affected by proposed Medicare and Medicaid cuts because its population 
is rapidly increasing.]

    The President. I guess the two things I want to hammer home are 
these: The trustees on which the Republican Congress have relied in 
saying that the Medicare Trust Fund is in trouble recommend an 
expenditure of between $90 billion and $100 billion to bail out the 
Trust Fund over the next 7 years. That's in Medicare. That's not $270 
billion; that's between $90 billion and $100 billion. I have proposed at 
around $120 billion, to ask the providers to do some things that will 
save money in both Part A and Part B of Medicare. But the premium costs 
to elderly people that go into Part B are all going into that general 
budget to fund the balanced budget tax cut plan.
    The second point I want to make about Medicaid is, 4 percent 
inflation sounds like a lot, because we now have inflation down at an 
all-time low for the last 30, 40 years in America, down to about 2 
percent and medical inflation down to 4 and 4\1/2\ percent.
    The problem is, if you live in a State where--let's say you kept 
medical inflation to 4\1/2\ percent for 7 years, let's just say you 
could do it. That's 4\1/2\ percent per person, and that includes young 
people as well as older people, and that assumes no population growth. 
So if you're Florida and you have population growth and most of your 
health care goes to elderly people, we know that the older you get, the 
more health care you access, so the inflation will always be more there.

[[Page 1386]]

    So that's why these numbers simply won't work and will have to be 
modified and why we must reduce the size of these cuts in order to 
achieve a balanced budget in a way that reflects our obligations across 
generational lines and across income lines. You just need to remember 
those two big points, and everything else flows from that.
    Now, you know more about this than I do, so I'd like to stop now and 
hear from you and let you say whatever you'd like to say or ask whatever 
questions you'd like to ask in whatever order you want to proceed.
    Who would like to go first?
    Governor Chiles. Let the ladies go.
    The President. Doctor, you want to go first?

[A Dade County doctor discussed the decline of nonprofit hospitals and 
gave an example of a patient who received inadequate followup care due 
to the practices of for-profit hospitals.]

    The President. Now, does this person--is this person in an HMO or 
not?

[The doctor said that she was not sure whether the patient was in a 
Health Maintenance Organization but thought perhaps the same company 
owned both the hospital and the HMO. She continued to cite examples of 
practices that she felt amounted to fraud in the health care system.]

    The President. Let me just point out that, if I might, I'd like to 
ask--our U.S. Attorney is here, and I'd like to ask him to--Kendall 
Coffey--just to talk very briefly about what we're doing in this here in 
Florida because this is one area where I hope we can get bipartisan 
agreement with the Congress.
    There is a lot of money to be saved in fraud and abuse. And our 
friends in the press corps who are covering this, you know, they hear 
this in every Government program, and people tend to get cynical. But in 
the Medicare/ Medicaid program, it's expanded so fast and diversified so 
much, and we have so much--things like Alzheimer's that you were talking 
about--there is genuinely a lot of fraud and abuse. And I think if we 
could get an agreement--there are some good things, by the way, in their 
plan that I like about dealing with this. And if we can get an agreement 
on about how much money we could save, this could help us to go some way 
toward resolving our differences.
    So, Mr. Coffey, maybe you could talk a little bit about what you're 
doing here in Florida to deal with this fraud and abuse problem.

[Mr. Coffey described Federal and State efforts to crack down on medical 
fraud and Medicare fraud in particular.]

    The President. The one thing I want to say is I think we are finally 
organized to handle this now so that when people like you believe you 
know about this, it's very important that you make a referral to the 
U.S. attorney's office, because I think a lot of people all across 
America have these feelings that things aren't right, but they don't 
know that anyone would ever prosecute it or look into it. We now are 
organized to handle these problems, and it's very important that not 
only those of you here but those who will hear about this meeting all 
across America will call their United States attorneys and let them know 
when they think there is some evidence of a problem.
    Q. Thank you.
    The President. Who else would like to go? Yes, sir.

[A participant voiced his distrust of doctors and hospitals and his 
concern that they often overcharge for services and asked what the 
Federal Government could do to regulate them.]

    The President. Well, I think there are two things we can do, two 
things we have to do at the same time. One is to increase our capacity 
to investigate fraud and abuse, and that's what we've done. As I said, 
we've got 3 times as many FBI agents as ever before. We've already 
doubled the number of prosecutions. We're bringing in more funds. We're 
moving on that. And then we need help--organized seniors groups can help 
us a lot by telling us what you think is wrong. You may not always be 
right, but we won't know unless you give us leads.
    The second thing we have to do is to simply slow the rate at which 
we're putting new money into the system. Now, in this area, there is 
pretty much bipartisan agreement on at least rough numbers of how much 
we should slow the rate of money which we're putting into Part A of the 
Medicare system. And so we have some--we've got agreement. We know if we 
slow the rate of growth into the provider pool--that's the Trust Fund, 
the Part A part--that we will force certain discipline on the system and 
will help to save it money and help to lengthen

[[Page 1387]]

the Trust Fund. So I think that we're agreed on that--you know, not to 
the last dollar, but generally those are the two things that can be done 
about it.
    I don't think that the answer to the fact that the system is 
consuming too much money, however, is to ask the seniors on fixed 
incomes to pay a whole lot more for the same health care.
    Q. That's what worries us.
    The President. That's what--what we've tried to do is to strike a 
proper balance. And my plan is to make full disclosure--is to try to 
continue the system we've had, but to fix the percentage of Medicare 
premiums that the seniors have to pay. So if the overall cost goes up, 
your out-of-pocket costs will go up, because the percentage will be a 
percentage of the bigger number. That way, we share the responsibility 
and there's some incentive not to overuse the system. But the main 
problem is the one that you have outlined.
    Who else would like to go next. Yes, sir?

[A participant explained that Medicare and Social Security not only 
benefit the elderly but also younger people who are no longer burdened 
with the high cost of taking care of their elderly parents.]

    The President. Governor Chiles and I were talking about that on the 
way in. I don't think people--that whole aspect of it hasn't been 
thought through. The extent to which, particularly if you look on the 
Medicaid budget, people who have to go into nursing homes and people who 
get help with in-home care, a lot of the elderly people themselves have 
low incomes, but their children have--a lot of them are basically 
getting by on middle class incomes. And their incomes would also be 
dramatically lowered if they had to basically go back to try to take 
care of their parents and their grandparents who were also less 
independent than they have previously been. I think it's a very 
important point, and thank you for making it.
    Q. It is.
    Q. Can we get this across to the congressional majority?
    Governor Chiles. Now, that's a different ball game. You'll have to 
help us.
    The President. I think if you can make those points, that this could 
be, in effect, an indirect middle class tax increase if they overdo it, 
then it would register, I think, on people, because it certainly would 
be. I mean, basically it would be an indirect tax increase on young 
people who are fortunate enough to still have their parents and 
grandparents living. And I'm saying, of course, it's just like 
everything else, some could afford to pay it, some couldn't, which is 
why I like the universal nature of Social Security and Medicare, because 
it basically empowers and gives dignity to the lives of people. It also 
strengthens families' ability to take care of their children. So you 
don't have people choosing between their children and their parents. 
That was a very important point.

[A participant thanked the President for his support of Medicare and 
asked the Holy Spirit to guide him in his efforts.]

    The President. Bless you. If we had a little more of the Holy 
Spirit, we could probably come close to--[laughter]

[A participant voiced her concerns about older people who could not 
afford medical care and about doctors who would no longer take elderly 
patients. She said that while this was not the case where there were 
many HMO's, there were other problems with HMO's, such as fraud and 
excessive profits.]

    The President. I think we're going to have to do a lot more work on 
that because, you know, some of them are wildly popular and are doing a 
good job. Some of them have taken their management savings, for example, 
and given people who've joined them free prescription drug benefits--
something that Medicare doesn't provide--which is a godsend for people 
who need it. So we shouldn't condemn the whole industry. I mean, some of 
them have done a wonderful job. But it also provides a vehicle through 
which people who care only about making a quick buck can justify just 
about any way to, in my opinion, to abuse people.
    What were you going to say?

[A participant explained the fraudulent practices of some HMO's and what 
is being done to prevent further abuse.]

    The President. Let me say, you know, I think we are getting close to 
agreement on the question of whether people should have more HMO choices 
available to them on Medicare and Medicaid but should not be forced into 
it.
    And I'm adamantly opposed to that, any kind of forced--but even if 
you do that, then you

[[Page 1388]]

have a problem that we have to be very vigilant about, that Governor 
Chiles talked about, because the healthiest people which used to go into 
HMO's and get the best deals, and then the HMO's could then decline to 
take people who might need, say, the drug benefit. And then 3 years from 
now, we could be spending even more money on the program than we are now 
because we let the people that don't cost much go into HMO's and get the 
regular fee and then everybody else will be out there, we'll have to 
spend even more on them.
    So if this is not a--the HMO, it's a good option in many cases, if 
it's a well-run HMO. But it's certainly not a be-all and end-all to the 
problem of medical costs.

[A participant voiced her support for Medicaid but stated that reforms 
must be made to ensure that the system would benefit those in need and 
that all programs should be monitored. Another participant then stated 
that, despite the belief of some people, elderly persons were not being 
selfish in their need for assistance. She also noted that the talents 
and capabilities of nurses were going unused in many hospitals.]

    The President. Well, as you know, I strongly support that. And I was 
interested in a comment you made--I hadn't thought to make this point 
today, but I think it's worth making--when you said that a lot of 
seniors have children in their fifties who can't get health insurance.
    We are--I tried to do something about that, as you know, 
unsuccessfully. We are losing now--a million Americans a year are losing 
their health insurance--non-seniors, under 65. This is happening in no 
other country in the world with an advanced economy. No other country 
would tolerate this.
    Q. Outrageous.
    The President. We lose one million a year. Now, we would lose more 
but for the Medicaid program. The Medicaid program not only helps 
seniors who need institutionalized care or who need in-home care, it 
helps some low-income people who are working poor people, who are not on 
welfare but are working poor, who are not on welfare but still have low 
incomes from other sources. And many States have tried to do what 
Governor Chiles has tried to do here, which is to achieve some savings 
in the Medicaid program by having a decent selection of HMO's and take 
the money and put it into providing subsidized insurance to the working 
poor.
    All of that will go totally out the window if we reduce Medicaid 
spending by the amount we're talking about, so that instead of just 
being the only country in the world that doesn't provide health 
insurance for people under 65, the only country in the world with an 
advanced economy losing a million people a year--that number, that one 
million number will go up quite a lot. We will then begin to lose even 
more people who are younger.
    So this is--that's another way in which this whole issue is an 
intergenerational thing. I will say again, I believe we can slow the 
rate of growth in Medicaid spending and Medicare spending. We have 
already done that in the last 2\1/2\ years. But I do not believe that 
you can just jerk $450 billion out of the system and pretend that there 
will be no adverse consequences. That is the point I want to make.
    Go ahead. What were you going to say?

[A participant praised the ombudsmen appointed by Governor Chiles to 
investigate complaints against nursing homes in Florida and stated the 
need for more control of physicians' fees for particular services.]

    The President. Thank you. We have a big crowd of people downstairs, 
and it's kind of hot for them, so we probably ought to go down there. I 
want to thank you for sharing this time with me. And I want to assure 
that I will take your concerns back to Washington, and the things that I 
can do something about by myself, I will do it. And I hope that this 
forum will serve to inform this debate that will occur in Congress over 
the next month or two.
    And I hope all of you will speak out. And I hope you will make many 
points, but first of all, be clear on how much fraud and abuse you think 
is in the system, because I think that will help to focus people on 
that. And secondly, remind people of the point you made, that this is 
not just about elderly people. This is about our intergenerational way 
of life in America, how we live, how our families function. That's a 
very important point.
    Q. Well, a lot of the older people are taking care of their little 
grandchildren.
    Q. Right now they are, yes, unfortunately.
    The President. I bet they are.
    Q. Sure they are. And we've got to keep the older people well for 
the children.

[[Page 1389]]

    The President. Thank you all. You were great. Thank you.

Note: The President spoke at 1:40 p.m. at Point East Senior Center.