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Office of the Press Secretary

For Immediate Release March 5, 1998
                         OF THE BABY BOOMERS

                             March 5, 1998

Today in the Cabinet Room, President Clinton met for the first time with the newly appointed Medicare Commission. The President stated his strong commitment to work with Chairman Breaux, Representative Thomas, and the rest of the Commission to develop a bipartisan consensus for future reforms to the Medicare program that prepare it for the retirement of the baby boom population. He also highlighted the great achievements of Medicare and the important contributions that the Balanced Budget Act (BBA) made to strengthen and improve the program. The President indicated that he is confident the Commission can build on the successes of last year's Medicare reforms and take the next steps to prepare the program for the unprecedented demographic challenges it faces. He also reminded the Commission that Medicare is more than just a program of policies and numbers; it is a national commitment that serves almost 40 million of our most vulnerable Americans.

MEDICARE HAS BEEN ONE OF THIS CENTURY'S GREATEST ACHIEVEMENTS -- IMPROVING THE HEALTH OF MILLIONS OF AMERICANS. In the last 30 years, the Medicare program has provided high-quality health care to millions of older Americans and people with disabilities. Since the program was signed into law:

The rate of insured elderly has increased from 56 percent to 99 percent. Today, about 15 million Americans could go uninsured without Medicare's guarantee of coverage.

Older Americans are living 20 percent longer. A 65-year-old today can expect to live until the age of 82; whereas in 1960, a 65-year-old could expect to live, on average, until the age of 79. This is partly attributable to Medicare's expansion of needed health care coverage to older Americans.

The poverty rate has dropped by over half. Medicare has contributed to decreasing poverty among older Americans. Today, about 11% of people ages 65 and older are poor, compared to 29% in 1966.

THE BIPARTISAN BALANCED BUDGET ACT INCLUDED UNPRECEDENTED MEDICARE REFORMS. One of the most important achievements of the Balanced Budget Act the President signed into law last summer was its unprecedented reform to the Medicare program. This bipartisan effort strengthened the life of the Medicare Trust Fund for at least a decade, included new health plan choices, and added coverage of preventive benefits. It:

Extended the life of the Medicare Trust Fund for at least a decade. Through a series of payment and structural reforms, the BBA extended the life of the Medicare Trust Fund for at least a decade. This achievement built on the President's 1993 budget, which extended the Trust Fund for three years.

Contained important new preventive benefits. The BBA included new preventive benefits including annual mammograms for all Medicare beneficiaries over forty; regular pap smears and pelvic exams; diabetes management benefits, and regular colorectal cancer screening.

Enacted important new structural reforms. The BBA also included new market-oriented reforms, such as adding new plan choices including Provider Sponsored Organizations, Preferred Provider Organizations, prospective payment system reforms, and a number of prudent purchasing provisions that allow Medicare to buy services in the same way private health plans do.

Growth in line with private spending. Because of the important BBA reforms, Medicare growth per beneficiary will actually be slightly less than projected private insurance spending growth: 4% versus 5% between 1997 and 2002.

STRENGTHENING MEDICARE FOR THE RETIREMENT OF THE BABY BOOMERS. While the Balanced Budget Act strengthened Medicare in the short term, the program will face new challenges as the baby boomers retire. President Clinton highlighted some of these challenges and made a strong commitment to work with the Commission to develop consensus for long-term Medicare reforms. The challenges include:

An unprecedented number of Americans will enter Medicare as the baby boom generation retires. The number of elderly will increase by 45 percent in the next 20 years. By 2030, one in five Americans will be elderly.

The ratio of workers to Medicare beneficiaries will drop significantly by 2030. The number of workers per Medicare beneficiaries will decline from 3.9 to 2.3 during this period, straining the financing of the Medicare program, which is partly financed through a payroll tax.

The President reiterated his confidence that the Commission, working with Congress and the Administration, will successfully meet the new challenges facing the Medicare program. He pointed out that the American people have always been able to reach consensus to address this extremely important program, which provides needed services to tens of millions of Americans.

See Lower Press for more detailed fact sheets on Medicare.


                             Stuart Altman
                     Rep. Michael Bilirakis (R-FL)
                      Senator John Breaux (D-LA)
                       Senator Bill Frist (R-TN)
                       Rep. John Dingell (D-MI)
                        Rep. Greg Ganske (R-IA)
                       Senator Phil Gramm (R-TX)
                             Eileen Gordon
                              Sam Howard
                       Senator Bob Kerrey (D-NB)
                      Rep. James McDermott (D-WA)
                   Senator John Rockefeller (D-WVA)
                            Debbie Steelman
                        Rep. Bill Thomas (R-CA)
                            Dr. Laura Tyson
                             Bruce Vladeck
                            Anthony Watson