Modernizing Medicare

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T H E W H I T E H O U S E

President Clinton's Remarks on Modernizing Medicare

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THE WHITE HOUSE
Office of the Press Secretary

For Immediate Release

June 30, 1999

REMARKS BY THE PRESIDENT
ON MODERNIZING MEDICARE

Chicago Cultural Center
Chicago, Illinois

11:15 A.M. CDT

THE PRESIDENT: Thank you very much, ladies and gentlemen, and goodmorning. I want to say that it's wonderful for me to be back in Chicago. Mostof you know how much I love it here, and I am delighted to be here. (Applause.)I bring you greetings from the First Lady who I left on my way here and who wasjealous that I was coming and she wasn't, especially since I'm also going to seethe Cubs play this afternoon. (Laughter.) And I enjoy that. (Applause.) Andfrom the Vice President and all the members of our administration who haveworked so hard on this health care issue.

I want to thank Anne Willis for her remarks and her leadership for theaging community here in Chicago. (Applause.) And I know that with me on thestage, and perhaps out in the audience as well, are members of the Mayor'sAdvisory Council on Aging, the Cook County Board of Commissioners, the CookCounty Council, the Chicago City Council -- I thank them all for being here.

I'd like to thank Linda Esposito for speaking on behalf of pharmacistswho have to live with the consequences of the absence of prescription drugcoverage for our seniors every day and who do their best to serve them wellunder very adverse circumstances. And I thought she did a very fine job -- Ithank her for being here. (Applause.)

And I want to thank Hanna Bratman for having thecourage to get up here and tell her story and introduce me. Youknow, I do this all the time. It's second nature for me. Butmost people, it's pretty scary to get up in front of all of youand all those cameras and talk about your life and talk aboutyour circumstances. And I thought she did a fine job, and Ithank her for doing that. (Applause.)

I'd also like to thank these ladies on my left, AnneThomas and her daughters, Lee Hamilton and Laura Peterson,because they represent what I think of as the ultimate test ofMedicare, which is whether it's fair and helpful and supportiveof families and our intergenerational responsibilities -- parentsto their parents to their children. And I'll say more aboutthat, but thank you for joining us today as well.

Ladies and gentlemen, as is so often the case when Iget up to speak, the people who spoke before me have saideverything that needs to be said. One guy got up -- you know thegreat story about the last speaker at a long dinner; eight peoplespoke and he got to speak at 10:00 p.m.; and he said, well,everything that needs to be said has been said, but not everyonehas said it. (Laughter.) So, relax, I'm going to talk a littlebit.

Let me say to all of you that we have an unprecedentedopportunity and an unprecedented responsibility to strengthenMedicare and to improve it, to modernize it, so that no one hasto make the choice that you have heard talked about, betweenaffording health care and affording other necessities of life;between remaining independent, or relying on your children andundermining their ability to raise your grandchildren.

We have this opportunity because our economy is thestrongest in a generation, perhaps ever, because our country isclearly moving in the right direction, a leading force forfreedom and peace and human rights around the world, as ourwonderful men and women in uniform demonstrated in Kosovorecently. Our social fabric here is mending -- the crime rate isdown; the welfare rolls have been cut in half; teen pregnancy isdown; drug abuse among our young people is down; and a record 90percent of our young people are immunized against seriouschildhood diseases for the first time in the history of ourcountry. (Applause.)

Our cities, which were once thought of as beingeconomically depressed, are thriving again. Chicago is exhibit A-- look at this beautiful building and this beautiful vista wehave here. (Applause.)

When I became President, we had a $290 billion budgetdeficit. The debt of our nation had quadrupled in only 12 years.Today, we are going to be, in 1999, $99 billion in the black.(Applause.) We actually projected yesterday that for the next 15years, the surplus will be $1 trillion more than we thought itwas just six months ago.

Now, this is a great tribute to the ingenuity and thehard work of the American people, and to the disciplineddecisions that we have made, starting in 1993, to cut thatdeficit until we balanced the budget and got into surplus. If wekeep going on the plan I have proposed to save Social Securityand Medicare and pay down the debt, this country actually can beout of debt -- out of debt -- in 15 years for the first timesince 1835. (Applause.)

Now, let me just say, since all of you know it's thestrength of the economy that has put people to work and raisedtheir incomes and brought in the revenues that enabled us to saveMedicare, the reason it's a good thing for all Americans for usto be out of debt is that if we're out of debt, it means that thegovernment won't be competing with you and the businesspeople toborrow money. It means interest rates will be lower -- forbusiness loans, for car loans, for home loans, for credit cards,for college loans.

It means, therefore, there will be more investment,more jobs, higher incomes. It means we will be less dependent onthe world for money to come into this country, so if there isanother financial problem, as there was in Asia a couple of yearsago, it will have less impact on us. It means people all overthe world that we look to to buy products that are produced inIllinois and throughout the United States will be able to borrowmoney more cheaply and have more money to buy our products, tohelp our prosperity as we help theirs, if we get this country outof debt.

So I want to emphasize to you, everything I amproposing to do with Medicare and with Social Security can bedone in a way that gets the country out of debt for the firsttime since 1835. And in a global economy, it is very, veryimportant to our children and our grandchildren that we give themthe opportunities they deserve. (Applause.)

Now, how are we going to do that? We have to set asidethe bulk, a little more than three-quarters of the surplus, forsaving Social Security and Medicare. We need to do that, quiteapart from this prescription drug benefit -- let's talk aboutthat. Why do we need to do that? Because we have a high-classproblem in America: we're all living longer. Life expectancy isalready over 76 in America. For young people growing up, theirlife expectancy will probably be over 80. Anybody who lives tobe 65 in America today has a life expectancy of 85. People over80 are the fastest-growing group of Americans.

Now, when you put that life expectancy development upnext to the fact that the baby boom generation, the biggestgeneration in American history until the present one in ourschools today, is getting ready to retire -- some of them,anyway. I'm the oldest of the baby boomers and I hope I don'thave to retire. But, anyway, I'm going to retire from this job,but, generally, I think I should keep working. (Applause.)

But when you look at the fact that with the babyboomers retiring, the oldest of the baby boomers -- that's me, weturn 65 in 2011, not that far away -- there are going to be a lotmore people retired relative to the number of people working,which means there will be a lot more people drawing SocialSecurity and a lot more people drawing Medicare relative to thenumber of people working.

Now, we can make some changes in the program, but Iwould argue that now that we have this surplus and we projectthis surplus to last into the future, and if we know it's goodfor us anyway, for all Americans of all ages, to pay the debtdown, we should save this much money now to stabilize SocialSecurity and Medicare and pay the debt off.

Now, I know there are a thousand good uses for thissurplus. If I gave each of you a piece of paper and I said name10 things that you would like to see your country do, we mighthave 100 different things on that list, and they'd all be good.But I say we should take care of first things first, and we don'thave any more important obligation -- not only to seniors, but totheir children and their grandchildren -- than to preserve theintegrity of Social Security and Medicare, and preserve thelong-term economic health of this country. So I hope that all ofyou will support that.

We can talk more about Social Security later, but if myproposal is accepted, we'll have Social Security solid for waymore than 50 years already, and with a few other changes, wecould take it out to 75 years; we could do something to deal withthe fact that elderly women on Social Security are far morelikely to be poor, and they need some extra help; and we couldlift the earnings limitation for people on Social Security. Iwould like to see those things done. (Applause.)

But let's talk about Medicare. We should secure andstrengthen and modernize Medicare. It's been around for 34 yearsnow. It's made health care more accessible and more affordable.As you heard Hanna say, it's given millions of American familiespeace of mind by paying for medical costs that otherwise wouldhave bankrupted families in their later years. It has also freedthe children of Medicare's recipients from the painful choice ofmortgaging their children's future to provide a decent healthcare for their parents.

But you've got people living longer and the babyboomers set to retire; therefore, more people drawing Medicareand fewer people paying in. What that means is that the trustfund will become insolvent by the year 2015, 15 years from now.

Now, we've already done a lot to try to stave that off.When I became President in 1993, the trust fund was supposed tobecome insolvent in 1999 -- this year. We've made a lot ofchanges. Some of them were difficult and somewhat unpopular, butwe have saved Medicare until 2015.

But that's not enough. Keep in mind, the baby boomgeneration won't begin to turn 65 until 2011. Then, over thenext 30 years, the number of people who are 65 or over willactually double. So we need to lengthen the life of the Medicaretrust fund, and we need to do it now. The sooner you deal withthese issues, the easier it is to deal with them. The longer wetake to deal with them, the more painful and the more expensiveit will be to deal with it.

The plan I announced yesterday to secure and modernizeMedicare for the 21st century does the following things. Firstof all, it extends the solvency of the present Medicare programto the year 2027. That is very important. Changes made todaycan keep it alive until 2027. That will almost completely takein the baby boom generation. Not quite, but nearly. And thatgives all of our successors plenty of time to take advantage ofall the increases in health care options that I'm convinced willallow people to stay healthier even longer in the years ahead.

To do it, I propose that we use 15 percent of thebudget surplus over the next 15 years. Again I say, there are alot of good uses for the surplus. A lot of people would like tohave more money right now. But there is nothing more importantthan taking care of first things first. Keeping the economystrong by paying the debt off, and saving Medicare and SocialSecurity, I think are the most important things we can do, and weshould do them first. (Applause.)

Now, we also plan to modernize the way the programworks, to introduce more innovations now used in private sectorhealth plans: To offer seniors the chance to choose betweenlower cost managed care plans for Medicare and the traditionalprogram without forcing the choice by having unreasonableincreases in the premiums in the traditional program. Toguarantee that our seniors have the information necessary to makeinformed choices and that all the available plans have certaincore medical benefits necessary to preserve the integrity of theprogram. To make sure that as we hold costs down, we keepquality up.

But we also, as everybody before me has said, need tomodernize Medicare. One of the ways, but not the only way, iswith prescription drugs. Think of it this way: Medicine haschanged a lot. The whole health care system has changed a greatdeal since 1965. But Medicare hasn't changed with it. As aconsequence, the average senior citizen today is paying a largerpercent of his or her income out of pocket for health care thanthey were paying in 1965 -- before Medicare came in -- primarilybecause of the prescription drug issue.

But think of the other challenges. A revolution inmedical science has brought cures to diseases once thoughtincurable, provided doctors the tools to prevent diseases fromstarting in the first place, and given millions of people thechance to live not only longer, but healthier lives.

Once, the cure for many illnesses was a surgeon'sscalpel. Now it's just likely to be a pharmacist's prescriptiondrug. Every day new drug therapies are being developed to treatchronic conditions such as diabetes and hypertension. We have todo more to make sure all seniors can take advantage of thismedical revolution.

We also have to do more to encourage seniors to takeadvantage of preventive technologies -- to take advantage ofscreenings for cancer, for diabetes, for osteoporosis and otherdiseases. To do that, my plan will eliminate the deductible andall co-payments for these preventive tests. (Applause.)

Just think of it this way: Under Medicare today, veryoften you can't get Medicare to pay for screening and prevention,but you can get Medicare to pay for the far more expensivehospitalization that would not have occurred in the first placeif the screening and prevention had been done. So this willactually save us money in the long run, as well as making peoplehealthier.

We also do have to make prescription drugs moreavailable and more affordable. They are essential to medicalcare. Just a few statistics: More than four out of five seniorsuse at least one prescription a year. Now, for most seniors, it's much more than that. And for many seniors, the properregimen of pills, properly taken, at home, can spell thedifference between maintaining and active and independent life,or being hospital- or nursing home- or home-bound for life.

If we were creating the Medicare program today, if wewere starting from scratch and it didn't exist, no one would evenconsider having a program without a prescription drug benefit forthe elderly and the disabled.

So what are we going to do? You heard Hanna talk aboutthe cost of her drugs. This is a costly issue. A month's supplyof a popular blood pressure medicine costs more than $70 a month.A cholesterol medication probably taken by some of you in thisroom costs about $100 a month. When you consider that some ofthe newest drugs costs as much as $15 a pill, that two-thirds --listen to this -- two-thirds of all people over 65 suffer fromtwo or more chronic diseases, that one in five elderly peopletakes at least five prescription medications a day, the pharmacybills can be staggering.

Each year, more than 2 million seniors spend more than$1,000 on medication -- people such as our friend, Anne Thomas,here to my left, whom I mentioned earlier, with her daughters.She's from Oak Brook. Her osteoporosis prescriptions swallow upa sixth of her income, almost 17 percent. Last year, she, too,was diagnosed with asthma, but she chose not to fill herprescription because the $300-a-month price tag was more than shecould afford.

Finding the funds to pay for prescription drugs is astruggle for seniors at many income levels, not just the poor.Indeed, of the 15 million seniors in our country that don't haveany prescription drug coverage, nearly half are middle-classAmericans. And that does not count the millions of seniors whohave some prescription coverage, but the coverage is totallyinadequate or far too expensive.

The number of plans that offer coverage is declining,and those that charge high prices and offer modest benefits areincreasing. Forty percent of all older Americans withoutprescription drugs -- let me say that again -- 40 percent aremiddle class. Nearly half the uninsured live in isolated ruralareas. And as I said, as drug prices rise and more privateinsurers drop drug coverage altogether, about 15 million of ourseniors will be uninsured within the year.

This is not the way to honor people after a lifetime ofwork and good citizenship. (Applause.) No American should haveto choose between fighting infections and fighting hunger,between skipping doses and skipping meals, between stayinghealthy and paying the rent. We can do better than that. We arenow prosperous enough to do better than that.

And I say again, there are many good uses for thesurplus. I have my ideas, the Congress has their ideas. Butfirst things first -- we have to take of this problem, and do itnow. (Applause.)

Now, we want to make sure that this plan is financiallyresponsible, that it can be paid for, that it won't break thebank. Here's what we propose to do. My plan will make aprescription drug benefit available to all Medicare recipients,but will provide extra help for those with lower incomes. Forpeople up to 135 percent of the poverty rate, we will waive theco-pay and the monthly premium. (Applause.) But people withincomes a little higher than that, we will have other subsidies,not quite as generous.

But for everyone, for a modest monthly premium,Medicare will pay for half of all the prescription drug costs,over the next few years, up to a ceiling of $5,000. In the firstyear, we have to start with a ceiling of $2,000, because it's abig program and we've got to put it in and prove we can make itwork. But under my plan, I will ask the Congress to approve andfund going to a $5,000 ceiling drug benefit, half of all thecosts. Now -- with no deductible.

This drug benefit is one that virtually all of ourseniors can afford, and it is constructed in a way America canafford. It will help millions and millions of people. Older anddisabled Americans will save even more on prescription drugsunder our plan because Medicare's private contractors will getbig volume discounts that seniors could never get on their own.So when they pay for half the price, that half will be a muchsmaller amount than would otherwise be the case.

Now, what I would like to say not only to those of youin this room, where I suppose I'm preaching to the saved, as wesay down home, but to all Americans, including those who are notin this room, is that this is something that is important thatgoes way beyond health care and way beyond money. How can youput a price on being able to see the birth of a grandchild, or toenjoy them as they grow up, or read to them, or take themfishing, or be active with your friends and family? How can youput a price if you are a child on being able to know and spendtime with and enjoy your grandparents?

There is no dollar value we can put on providing thebest quality of life we can. And I want you all to understand,we can afford this. If this is not done it is because somebodymade a different decision to do something else with the money.This is not welfare. This is not some blind gift. This issomething we are doing for the integrity of families through thegenerations.

Our country is in the best shape it's beeneconomically, maybe ever, certainly in a long time. And whatwe're going to do now will define what kind of country we will bewell into the 21st century. Are we going to squander this moneywe worked so hard for after only six years of effort, turnedaround an unbelievable record of fiscal irresponsibility, or arewe going to pay off our debts in the bank and pay off our debtsto our families -- not only to our parents and grandparents, butto future generations. (Applause.) That is the question.

So I want to ask you to join me. You know, Hanna saidshe didn't know much about politics -- I thought she made apretty good political speech, myself. (Laughter and applause.)But she said something that's really important. She said, youknow, I don't understand why this should be a political issue.You know, sometimes when things get real tense in Washington, youknow, and some of my friends in the other party get real excited,I say, hey, loosen up, you know. We're all getting older, noneof us are going to be here forever. People get a chance to voteevery election. Loosen up. Relax. No one escapes time and age.Republicans age just like Democrats. (Laughter and applause.)

People who are independents still get sick every nowand then, even though they refuse to register in a politicalparty. This is not a political issue -- anywhere in America --and it should not be a political issue in Washington, D.C. Thisis something we can do together for the future of America.

I want you to reach out to your representatives fromIllinois. You are represented in this state by both Republicansand Democrats in the United States Congress, more or less fairlyapportioned. I wish it were different, but there it is.(Laughter.) You can write to them. You can call them. You cansay, do this not only for us, but do it for our children and ourfuture. Do it because we're all aging, and it's a high-classproblem, that we're living longer.

But we have to prepare for the day when the babyboomers retire. And we should not wait another day to providethe prescription drug benefit. And we have the money to do it.This is simply a matter of choice. I ask you, without regard toyour party, to reach out to the members of your congressionaldelegation and say, this is the right choice for our future.

Thank you very much. (Applause.)

END

11:43 A.M. CDT