[Weekly Compilation of Presidential Documents Volume 35, Number 26 (Monday, July 5, 1999)]
[Pages 1217-1221]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
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, 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

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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 ask 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 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

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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 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

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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 
employer's 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 
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.

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