    [Public Papers of the Presidents of the United States: William J. Clinton (1999, Book I)]
    [June 29, 1999]
    [Pages 1035-1039]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks Announcing a Medicare Modernization Plan
    June 29, 1999

        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,

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    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

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    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

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    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

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    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.

    Note: The President spoke at 3:23 p.m. in the East Room at the White
    House.