THE WHITE HOUSE

Office of the Press Secretary

                   PRESIDENT CLINTON JOINS DEMOCRATS 
                 TO UNVEIL LEGISLATION GIVING AMERICANS
               AGES 55 TO 65 NEW HEALTH INSURANCE OPTIONS 
                   AND RELEASES STATE-BY-STATE STUDY 
                 UNDERSCORING THE NEED FOR THIS POLICY

March 17, 1998

Today, President Clinton joined Democrats on the Hill to unveil legislation that would provide greater health insurance options for Americans ages 55 to 65. This targeted, paid-for proposal will give an estimated 300,000 to 400,000 vulnerable Americans new choices for more affordable health care coverage. Urging Congress to pass this legislation, the President also released a state-by-state analysis documenting the need for this policy. He:

RELEASED NEW STATE-BY-STATE STUDY THAT DEMONSTRATES THE DIFFICULTY AMERICANS AGES 55 TO 65 HAVE GAINING ACCESS TO HEALTH INSURANCE. The new report, prepared by the Domestic Policy Council and the National Economic Council, found that:

Twenty-two percent of Americans ages 55 to 65 -- a total of five million people -- are either uninsured or insured through the individual insurance market. In some states, such as North Dakota, Texas, and Nebraska, the percentage is over 30 percent.

• Three million are uninsured. Some Americans ages 55 to 65 lose their employer-based health insurance when their spouse becomes eligible for Medicare. Many lose their coverage because they lose their jobs in company downsizings or plant closings. Still others lose insurance when their retiree health coverage is dropped unexpectedly.
• Many are left to buy into an unaffordable individual insurance market, where premiums can be as high as $1,000 per month. Individual insurance can be prohibitively expensive, particularly for those who have pre-existing medical conditions.

In 38 states, individual insurance policies can be denied outright. Sixteen million Americans ages 55 to 65 -- 75 percent of this population -- live in one of the 38 states where individual insurance has no guarantee issue requirement. These individuals often have nowhere to turn for health care coverage.

In 21 states, there are no assurances that pre-existing conditions are adequately covered. Eight million Americans ages 55 to 65 -- 36 percent of this population -- live in states that allow individual insurers to decline to cover pre-existing conditions. This means that individuals may not be able to get coverage for the care they need most, such as diabetes or cancer treatment.

In 34 states, there are no protections against exorbitant premiums. Sixteen million Americans ages 55 to 65 -- 75 percent of this population -- live in states that do not protect individuals against exorbitant premiums.

(State-by-State Report available in the Lower Press Office)

ANNOUNCED THAT THE STATE-BY-STATE FINDINGS WILL BE LARGELY CONFIRMED BY A NEW KAISER FAMILY FOUNDATION STUDY TO BE RELEASED ON WEDNESDAY. A new study to be released on March 18, by the Kaiser Foundation, confirms that the individual insurance market cannot be relied upon to offer affordable insurance. It documents insurance practices that result in denial of coverage, excessive premiums, and geographic variation, especially for older and sicker people. It reports that a 60-year old, healthy man in an average cost area could pay up to $535 per month for coverage. However, if he lived in a high-cost area and had health problems, this premium could be over twice as high (250 percent of the standard premium, or over $1,000 per month) -- or he could be denied coverage altogether.

UNVEILED LEGISLATION THAT ALLOWS AMERICANS NEW CHOICES TO GAIN ACCESS TO HEALTH CARE COVERAGE. The legislation unveiled on the Hill today provides new health insurance options for Americans ages to 55 to 65. This legislation is being introduced by numerous Democrats, including both Democratic leaders (Senator Daschle and Congressman Gephardt), as well as all the ranking Democrats on the Committees of Jurisdiction: Senators Moynihan and Rockefeller (Senate Finance Committee) and Representatives Rangel, Stark (House Ways and Means Committee), Dingell, and Brown (House Commerce Committee). It:

Enables Americans ages 62 to 65 to buy into Medicare, by paying a premium.

Provides displaced workers over 55 access to Medicare by offering those who have involuntarily lost their jobs and their health care coverage a similar Medicare buy-in option. These workers often have a hard time finding new jobs: only 52 percent are reemployed, compared to over 70 percent of younger workers.

Allows retirees ages 55 and older whose employers dropped their health coverage with access to their former employers' health plan. This provision allows retirees whose employers dropped their health coverage after they have retired to buy into their employers' health plans through "COBRA" coverage.

CONFIRMED THIS IS A PRUDENT, TARGETED PROPOSAL THAT GIVES AMERICANS AGES 55 TO 65 NEW CHOICES WITHOUT HARMING MEDICARE. The Congressional Budget Office recently released estimates showing that the Medicare buy-in proposal is a carefully targeted policy that will not burden the Medicare Trust Fund.

Paid for by premiums and anti-fraud and overpayment savings. Under this proposal, participants would pay the premium in two parts: most up front (the base premium) and a part after they turn 65 years old (the risk portion of the premium reflecting the possibility that those who opt for this policy will have below-average health). Medicare would "loan" participants the second part of the premium until they reach 65, after which they would make a small additional payment on top of their regular Medicare Part B premium. This payment mechanism means that the legislation will impose only temporary costs on the Medicare program; these costs are paid for, dollar-for-dollar, by a series of anti-fraud and anti-overpayment initiatives.

Separate Trust Fund. The buy-in takes advantage of Medicare's low administrative costs and choice of providers and plans, but its financing is kept completely separate from the Medicare Trust Fund.