    [Public Papers of the Presidents of the United States: William J. Clinton (1996, Book II)]
    [September 10, 1996]
    [Pages 1526-1527]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Statement on the Medicare Demonstration of Military Managed Care
    September 10, 1996

        Today I am pleased to announce, on behalf of more than one million
    Medicare-eligible military retirees, a new demonstration that will
    expand health care options for our Nation's military retirees.
        This initiative moves forward an idea--Medicare subvention, or
    Medicare reimbursement of Department of Defense health facilities--that
    the military retiree community has sought for many years. This
    administration first embraced

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    the concept of Medicare subvention 3 years ago under health reform. More
    recently, the administration moved the concept forward in a legislative
    proposal for the Department of Veterans Affairs.
        The demonstration I am announcing today, the ``Medicare
    Demonstration of Military Managed Care,'' is a partnership between the
    Departments of Health and Human Services and Defense that can generate
    multiple benefits: expanded health care options and improved access to
    military treatment facilities for Medicare-eligible military retirees; a
    better way for the Department of Defense to care for retired
    beneficiaries and support medical readiness; and savings for the
    Medicare Trust Fund by providing health care to Medicare-eligible
    military retirees at a lower cost in the DoD health care system.
        Under this demonstration project, Medicare-eligible military
    retirees in five communities could enroll in Defense's new TRICARE Prime
    managed care system, and Medicare would reimburse DoD for these
    enrollees at a rate below what is traditionally paid to Medicare managed
    care plans. To protect the Medicare Trust Funds, Defense would receive
    Medicare payments only after meeting its current level of funding
    effort. The demonstration will test whether Medicare subvention is a
    cost-effective alternative for delivering accessible and quality care to
    dual-eligible beneficiaries.
        We will submit legislation reflecting this agreement shortly. I am
    pleased that there is strong bipartisan support for this demonstration,
    and I look forward to working with Congress in quickly enacting enabling
    legislation this year.
        We owe a great debt to those who have risked their lives defending
    our Nation. This agreement is an important step toward repaying that
    debt.