[Public Papers of the Presidents of the United States: William J. Clinton (1998, Book II)]
[October 8, 1998]
[Pages 1765-1767]
[From the U.S. Government Publishing Office www.gpo.gov]

Remarks on the Decision of Certain Health Maintenance Organizations
To Opt Out of Some Medicare Markets
October 8, 1998

    Thank you. I would like to begin by thanking Senator Rockefeller and 
Congressman Dingell for their steadfast support of Medicare and their 
participation in our Medicare Commission. Let me say just in advance, I 
would think that the very issue we discuss today offers further evidence 
that it is time to take a look at the challenges and the 
responsibilities of the Medicare program, long-term, and I'm glad we 
have Jay Rockefeller and John Dingell on that commission.
    I'd like to thank Senator Kennedy and Senator Lieberman and 
Congressman Stark and Congressman Cardin also for being here today. I'd 
like to thank Secretary Shalala for her marvelous service, and Nancy-Ann 
Min DeParle who is here with her. I'd like to thank all the members of 
the seniors groups who are representing their constituents, standing to 
my right here. I thank them for joining us today.


    Since this is the only time I'll have to talk to the press for the 
next several hours, I hope you will indulge me for a moment while I make 
a few comments about the present situation in Kosovo.
    As a result of the unconscionable actions of President Milosevic, we 
face the danger of violence spreading to neighboring countries, 
threatening a wider war in Europe. We face a humanitarian crisis that 
could be a catastrophe in the making, as tens of thousands of homeless 
refugees risk freezing or starving to death as winter comes on.
    Our goal is simple: It is full compliance with United Nations 
Security Council resolutions by President Milosevic. My Special Envoy, 
Richard Holbrooke, has just completed 3 days of talks with Mr. 
Milosevic, making absolutely clear that he must meet the demands of this 
Security Council resolution, end the violence, withdraw his forces, let 
the refugees return to their homes, give the humanitarian relief workers 
full and free access to the people who need them, and begin negotiations 
with the Kosovar Albanians on autonomy for their region, which is 
provided for under the law of their nation.
    Yesterday I decided that the United States would vote to give NATO 
the authority to carry out military strikes against Serbia if President 
Milosevic continues to defy the international community. In the days 
ahead, my counterparts in Europe will be making similar decisions. We 
would prefer--we would far prefer--to secure President Milosevic's 
compliance with the will of the international community in a peaceful 
manner. But NATO must be prepared to act militarily to protect our 
interests, to prevent another humanitarian catastrophe in the Balkans.

HMO's and Medicare

    Now, let me echo, first of all, the sentiments which have already 
been expressed here. Since John Dingell was in the chair when Medicare 
was passed, it has been more than a program; it has been a symbol of our 
intergenerational unity as a country, fulfilling our responsibilities to 
our grandparents and parents, protecting our families. Strengthening 
Medicare has been one of this administration's top priorities. Last year 
we took historic bipartisan action to improve benefits and extend the 
life of the Trust Fund for a decade. We expanded the number and types of 
health plans available to Medicare beneficiaries so that older 
Americans, like other Americans, would have more choices in their 
    I think it ought to be said in defense of this decision and the 
enrollment of many seniors in managed care plans that one of the 
principal reasons that so many seniors wanted it is that there were 
managed care plans who thought, for the reimbursement then available, 
they could provide not only the required services under Medicare but 
also a prescription drug benefit,

[[Page 1766]]

something that these Members and I tried to get done for all the seniors 
of the country at an earlier point in time.
    Well, today there are 6\1/2\ million Medicare beneficiaries in 
HMO's. As we all know, in recent weeks the HMO industry announced that 
unless all Medicare HMO's could raise premiums and reduce benefits--
all--some health plans would drop their Medicare patients by the end of 
the year.
    We told them, no deal. That's what we should have done. We were not 
going to allow Medicare to be held hostage to unreasonable demands. So 
several HMO's decided to drop their patients. These decisions have 
brought uncertainty, fear, and disruption into the lives of tens of 
thousands of older Americans across the country. While the overwhelming 
majority of seniors affected will be able to join another HMO covering 
Medicare in their area, 50,000 of them will be left without a single 
managed care alternative.
    Now, these HMO's say they are looking after the bottom line. All of 
you who understand the Medicare program know that the reimbursement 
rates are different across regions and in different areas. We have tried 
very hard to alleviate that, the problems with that system. And we 
recognize that there were problems. We have worked to alleviate them. 
But that wasn't what we were asked to do. We were asked just to give all 
HMO's permission to raise rates whether they needed to or not, without 
regard to how much money they were making or not. And I think that was 
    We have to do everything we can to protect Americans who have been 
dropped by their HMO's and to protect the health care options of all 
seniors in the future. So today we're taking three steps.
    First, we'll do everything we can to encourage HMO's to enter the 
markets abandoned by managed care. Beginning immediately, the Health 
Care Financing Administration will give first priority in its review and 
approval process--first priority--to all new HMO's applying to serve 
seniors in deserted areas.
    Second, I am asking Secretary Shalala to work with Congress, aging 
advocates, and health plans to develop new strategies to prevent another 
disruption in coverage like the one we are seeing now. I'm asking the 
Secretary to consider all possible legislative options that can be 
included in the next budget I send to Congress.
    Finally, I am launching a comprehensive public information campaign 
to make sure all affected seniors understand the health coverage plans 
that are already available to them. We'll bring together a broad public 
and private coalition, from the AARP to the Older Women's League to the 
Social Security Administration to local offices on aging, to educate 
seniors about all their rights and options. We must say to them, losing 
HMO coverage does not mean losing Medicare coverage. You are still 
protected by Medicare. You are still eligible for the traditional fee-
for-service program and for Medigap policies.
    Let me just say one other thing. In the last few days before it 
adjourns, let me ask Congress again to put aside partisanship and 
embrace our common responsibilities by reauthorizing the Older Americans 
Act. For years, this law has improved the lives of millions of our 
senior citizens, providing everything from Meals on Wheels to counseling 
to legal services. Every day that goes by without passing the bipartisan 
legislation to reauthorize the act sends a troubling message to seniors 
that their needs are not a priority.
    More than 30 years ago, Congress was able to put progress before 
partisanship when it created Medicare in the first place. As a result, 
millions of older Americans have been able to live healthier, happier, 
more stable lives. It is one of the signal achievements of this century.
    So let me say again, we have to do that again--to work to strengthen 
Medicare, to reauthorize the Older Americans Act, to treat each other in 
the work of America as we want people out in America to treat each other 
and to work. The Members who are here have certainly done that. And for 
that, I am grateful.
    Secretary Shalala and I hope very much that these steps we are 
taking today and the work we will do with these senior advocates will 
provide some peace of mind, some support, and some help to the seniors 
who have been so shaken by the events of the last few days here.
    Thank you very much. Thank you.
    I want to say one other thing. Senator Dodd came in late, but has 
actually offered legislation in this area, so I want to give him credit 
for that. Connecticut is the only State here with 100 percent 
representation. [Laughter] Thank you very much.

[[Page 1767]]

Note: The President spoke at 11:49 a.m. in the Roosevelt Room at the 
White House. In his remarks, he referred to President Slobodan Milosevic 
of the Federal Republic of Yugoslavia (Serbia and Montenegro).