[Weekly Compilation of Presidential Documents Volume 37, Number 28 (Monday, July 16, 2001)]
[Pages 1029-1032]
[Online from the Government Publishing Office, www.gpo.gov]

<R04>
Remarks on Medicare Reform

July 12, 2001

    Thank you all very much. Today I'm here to talk about our most 
important commitment to our seniors, the health of our seniors and how 
we can modernize and strengthen Medicare.
    I'm also here to announce an exciting new plan to provide every 
senior on Medicare an opportunity to better afford prescription drugs by 
the beginning of next year.
    I want to thank the members of both political parties--of all three 
political parties--[laughter]--who are here today. It shows us firm 
commitment to make sure our Nation fulfills a solemn pledge to our 
seniors and that is that our seniors have the best possible health care 
available for them. So thank you all for coming. We've got many Members 
of the House and the Senate, most notably, Senators Breaux and Thomas--I 
mean, Senators Breaux and Frist and Congressman

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Thomas, all three Members who worked hard on Medicare reform in the past 
and who are joining with the administration to promote Medicare reform 
this year.
    Thirty-six years ago this month--and thank you, as well, Mr. 
Secretary, for being here--36 years ago this month President Lyndon 
Johnson flew to Independence, Missouri, to sign Medicare into law and to 
present the first Medicare registration card to former President Harry 
Truman. President Johnson spoke that day about what Medicare would mean 
for our country, and here is what he said: ``No longer would older 
Americans be denied the healing miracle of modern medicine. No longer 
would illness crush and destroy the savings that they have so carefully 
put away over a lifetime, so that they may enjoy dignity in their later 
years.'' He went on to say that ``no longer will young families see 
their own incomes and their own hopes eaten away simply because they are 
carrying out their deep moral obligations to their parents and to their 
uncles and to their aunts.''
    Medicare has lived up to President Johnson's vision. It has improved 
the health of America's seniors, and it's eased the financial anxieties 
of retirement, reduced the burden on younger generations, and fulfilled 
our Nation's commitment.
    Medicare is a binding commitment. The Medicare promise we made in 
1965 will never change. And as medicine advances and the needs of our 
seniors change, Medicare, too, must advance, and it, too, must change. 
This generation of leaders must honor and renew the promise of Medicare 
by strengthening Medicare for the future.
    In 1965 health care usually meant hospital care. Today, we 
understand how important it is to prevent people from getting sick in 
the first place. Yet, Medicare does not fully cover preventative 
medicine.
    In 1965 prescription drugs meant antibiotics. Today, illnesses that 
could once only be treated by invasive surgery are treated instead with 
effective new drugs. But these new drugs can be very expensive, and 
under the current system, Medicare doesn't pay for them.
    In 1965 medicine could offer people diagnosed with cancer and other 
dangerous diseases little hope. Today, we can defeat many once incurable 
diseases but too often at a costly price that Medicare will not pay in 
full.
    In 1965 the pace of medical progress was relatively slow. Today, 
hardly a day goes by without news of an exciting advance to extend life 
or improve health. Yet, Medicare takes way too long to authorize new 
treatments.
    We must act now to ensure that the next generation of medical 
technology is readily available to America's seniors, from medicines 
tailored exactly to an individual's disease to Internet diagnosis that 
will allow patients to be treated by experts on the other side of their 
continent without the patients having to leave their living rooms.
    In 1965 Medicare's finances were based on assumptions that quickly 
proved wrong. This has had enduring consequences. Medicare has too many 
limits on coverage. Seniors enrolled in Medicare are responsible for a 
nearly $800 deductible every time they visit a hospital. And they find 
themselves responsible for paying thousands more if they are seriously 
ill.
    Medicare's funding structure doesn't make sense--two different 
parts, one of which appears to have a surplus, even though the other has 
a much bigger shortfall. And Medicare's costs are rising too fast, which 
creates anxieties about the program's stability.
    It may be that cars don't get any better than the 1965 Mustang. But 
even the '65 Mustang didn't have power windows or anti-lock brakes. When 
it comes to cars and when it comes to health care, 1965 is not the state 
of the art. We need to bring Medicare into the 21st century, to expand 
its coverage, improve its services, strengthen its financing, and give 
seniors more control over the health care they receive.
    Medicare's most pressing challenge is the lack of coverage for 
prescription drugs. Several people here with us this morning know from 
personal experience what that means. Frank Van der Linden was a 
newspaper reporter, and a good one; now he's being squeezed behind 
Medicare premiums and drug costs. Or Bobby Cherry, he's a senior 
coordinator at the Florida Avenue Baptist Church, right here in 
Washington; he pays close to 40 percent of his income for prescription 
drugs and Medicare copayments; or

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Gwendolyn Black, who spends $2,400 a year to put four healing drops a 
day into each of her eyes.
    Today I announce the first step toward helping American seniors get 
the prescription drugs they need and deserve, a new national drug 
discount program for seniors that will begin early next year. Every 
senior on Medicare can receive a new drug discount card. It won't cost 
much, at most a dollar or two a month, and will work like the cards you 
already have for, say, your groceries. Present the card at a 
participating pharmacy, and you receive a substantial discount. It's as 
simple as that, and it's convenient.
    The new drug discount plan combines the purchasing clout of millions 
of seniors to negotiate lower prices than under the current system. And 
under my plan, participating pharmacies will get new customers, and 
seniors will get high-quality drugs at a lower price.
    It's a plan similar to the plan that brings discounts to many 
Americans who have private insurance. And the leaders of the companies 
that have been so successful in providing drug discounts in private 
plans are here with us today and will brief the press on the savings 
about our strategy.
    The drug discount plan is the first necessary step to provide 
immediate help to seniors without destabilizing Medicare's finances. It 
is the first step, but it is not a substitute for a drug benefit and for 
strengthening Medicare. And that's why my administration has developed, 
with a bipartisan group of legislators, a framework for strengthening 
and expanding Medicare for the long term. This framework will guide us 
as Congress takes up Medicare in the coming months, and here are its 
main elements:
    First, seniors already enrolled in Medicare and those near 
retirement must have the option of keeping their Medicare exactly the 
way it is today. No senior will see any change that he or she does not 
want or does not seek. If you like things the way they are, that's just 
the way they'll stay.
    Second, all seniors today and tomorrow will be offered a range of 
new Medicare plans, including an improved and updated Government plan, 
as well as others offered by nongovernment insurance plans. All the 
Medicare plans must offer benefits at least as comprehensive as the 
Government plan. All will be regulated by the Federal Government, and 
all of them must offer prescription drug coverage.
    Third, everyone enrolled in Medicare will have the power to choose--
power to choose--which plan works best for him or her. The plans will 
compete with each other, forcing them to offer better service, extra 
benefits, and lower premiums. All seniors in America should enjoy the 
same freedoms that Federal employees have today when it comes to 
choosing their health care plans. We must trust seniors to make the 
right decisions for themselves.
    Fourth, Medicare must become more responsive to seniors, especially 
to seniors on low incomes and with unusually high medical costs. 
Sometimes people discover Medicare's gaps when they need Medicare most. 
Under the current system, the sickest Americans pay a higher percentage 
of their bill than others do. And that's not right, and under our 
approach, that will stop. We'll put a stop-loss limit on the amount any 
senior can be asked to pay in any year.
    Too many seniors feel compelled to purchase costly Medigap policies 
to cover what Medicare does not. Take, for example, Mr. Cuyler Taylor, 
who's with us today. The Taylors spend more than $10,000 a year on drugs 
and Medigap insurance. Our framework will not only cover drugs, but it 
will reduce the need for costly, extra insurance. The gaps in Medicare 
bear especially hard on low income people, and extra help will be 
available to them, as well.
    And finally, we must put Medicare on a sustainable financial footing 
for future generations.
    The two parts of Medicare must be combined into one. When popular 
alternative plans are established, the Government's contribution to any 
one Medicare plan should eventually be tied to the average cost of all 
Medicare plans, preventing any one plan from driving up the cost that 
all Americans must pay.
    So these are the main principles for strengthening and improving 
Medicare. Nobody on Medicare will see any change in Medicare unless he 
or she wants it. There

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will be new Medicare choices, and all of these new choices will offer 
prescription drugs. Medicare plans will compete by offering better 
service and lower premiums. Medicare will respond better to the needs of 
seniors and, especially, low income seniors and seniors with high 
medical bills. And Medicare will be put on sound financial footing.
    These are principles which will strengthen one of our Nation's most 
sacred obligations, the health of our senior citizens. We'll protect 
seniors now, offering exciting new services and more choices to seniors 
in the future, and guarantee prescription drug coverage. And we will do 
it without overtaxing our children and our grandchildren.
    Medicine is constantly improving. Medicare must keep pace. That's my 
administration's commitment today and its exciting new vision for health 
care in America.
    Thank you all for coming.

Note: The President spoke at 9:51 a.m. in the Rose Garden at the White 
House.