[Weekly Compilation of Presidential Documents Volume 32, Number 37 (Monday, September 16, 1996)]
[Page 1710]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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 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.