THE WHITE HOUSE

Office of the Press Secretary

                        REMARKS BY THE PRESIDENT
                           AT HMO ANNOUNCEMENT
            
                           The Roosevelt Room            

11:49 A.M. EDT

THE PRESIDENT: I would like to begin by thanking Senator Rockefeller and Congressman Dingell for their steadfast support of Medicare and their participation in our Medicare Commission. Let me say just in advance, I would think that the very issue we discuss today offers further evidence that it is time to take a look at the challenges and the responsibilities of the Medicare program, long-term, and I'm glad we have Jay Rockefeller and John Dingell on that commission.

I'd like to thank Senator Kennedy and Senator Lieberman and Congressman Stark and Congressman Cardin also for being here today. I'd like to thank Secretary Shalala for her marvelous service, and Nancy Ann Min DeParle who is here with her. I'd like to thank all the members of the seniors groups who are representing their constituents -- standing to my right here -- I thank them for joining us today.

Since this is the only time I'll have to talk to the press for the next several hours, I hope you will indulge me for a moment while I make a few comments about the present situation in Kosovo.

As a result of the unconscionable actions of President Milosevic, we face the danger of violence spreading to neighboring countries, threatening a wider war in Europe. We face a humanitarian crisis that could be a catastrophe in the making, as tens of thousands of homeless refugees risk freezing or starving to death as winter comes on.

Our goal is simple: It is full compliance with United Nations Security Council resolutions by President Milosevic. My Special Envoy, Richard Holbrooke, has just completed three days of talks with Mr. Milosevic, making absolutely clear that he must meet the demands of this Security Council resolution -- end the violence, withdraw his forces, let the refugees return to their homes, give the humanitarian relief workers full and free access to the people who need them, and begin negotiations with the Kosovar Albanians on autonomy for their region, which is provided for under the law of their nation.

Yesterday I decided that the United States would vote to give NATO the authority to carry out military strikes against Serbia if President Milosevic continues to defy the international community. In the days ahead, my counterparts in Europe will be making similar decisions. We would prefer -- we would far prefer -- to secure President Milosevic's compliance with the will of the international community in a peaceful manner. But NATO must be prepared to act militarily to protect our interests, to prevent another humanitarian catastrophe in the Balkans.

Now, let me echo, first of all, the sentiments which have already been expressed here. Since John Dingell was in the chair when Medicare was passed, it has been more than a program; it has been a symbol of our intergenerational unity as a country, fulfilling our responsibilities to our grandparents and parents, protecting our families.

Strengthening Medicare has been one of this administration's top priorities. Last year we took historic bipartisan action to improve benefits and extend the life of the trust fund for a decade. We expanded the number and types of health plans available to Medicare beneficiaries so that older Americans, like other Americans, would have more choices in their Medicare.

I think it ought to be said in defense of this decision and the enrollment of many seniors in managed care plans, that one of the principal reasons that so many seniors wanted it is that there were managed care plans who thought for the reimbursement then available they could provide not only the required services under Medicare, but also a prescription drug benefit -- something that these members and I tried to get done for all the seniors of the country at an earlier point in time.

Well, today there are 6.5 million Medicare beneficiaries in HMOs. As we all know, in recent weeks the HMO industry announced that unless all Medicare HMOs could raise premiums and reduce benefits -- all -- some health plans would drop their Medicare patients by the end of the year.

We told them, no deal. That's what we should have done. We were not going to allow Medicare to be held hostage to unreasonable demands. So several HMOs decided to drop their patients. These decisions have brought uncertainty, fear, and disruption into the lives of tens of thousands of older Americans across the country. While the overwhelming majority of seniors affected will be able to join another HMO covering Medicare in their area, 50,000 of them will be left without a single managed care alternative.

Now, these HMOs say they are looking after the bottom line. All of you who understand the Medicare program know that the reimbursement rates are different across regions and in different areas. We have tried very hard to alleviate that -- the problems with that system. And we recognize that there were problems; we have worked to alleviate them. But that wasn't what we were asked to do. We were asked just to give all HMOs permission to raise rates whether they needed to or not, without regard to how much money they were making or not. And I think that was wrong.

We have to do everything we can to protect Americans who have been dropped by their HMOs and to protect the health care options of all seniors in the future. So today we're taking three steps. First, we'll do everything we can to encourage HMOs to enter the markets abandoned by managed care. Beginning immediately, the Health Care Financing Administration will give first priority in its review and approval process -- first priority -- to all new HMOs applying to serve seniors in deserted areas.

Second, I am asking Secretary Shalala to work with Congress, aging advocates, and health plans to develop new strategies to prevent another disruption in coverage like the one we are seeing now. I'm asking the Secretary to consider all possible legislative options that can be included in the next budget I send to Congress.

Finally, I am launching a comprehensive, public information campaign to make sure all affected seniors understand the health coverage plans that are already available to them. We'll bring together a broad public and private coalition from the AARP to the Older Women's League to the Social Security Administration to local offices on aging, to educate seniors about all their rights and options. We must say to them, losing HMO coverage does not mean losing Medicare coverage. You are still protected by Medicare. You are still eligible for the traditional fee-for-service program and for Medigap policies.

Let me just say one other thing. In the last few days before it adjourns, let me ask Congress again to put aside partisanship and embrace our common responsibilities by reauthorizing the Older Americans Act. For years, this law has improved the lives of millions of our senior citizens, providing everything from Meals on Wheels, to counseling, to legal services. Every day that goes by without passing the bipartisan legislation to reauthorize the act sends a troubling message to seniors that their needs are not a priority.

More than 30 years ago, Congress was able to put progress before partisanship when it created Medicare in the first place. As a result, millions of older Americans have been able to live healthier, happier, more stable lives. It is one of the signal achievements of this century.

So let me say again, we have to do that again -- to work to strengthen Medicare, to reauthorize the Older Americans Act, to treat each other in the work of America as we want people out in America to treat each other and to work. The members who are here have certainly done that, and for that I am grateful.

Secretary Shalala and I hope very much that these steps we are taking today and the work we will do with these senior advocates will provide some peace of mind, some support, and some help to the seniors who have been so shaken by the events of the last few days here.

Thank you very much. (Applause.) Thank you.

I want to say one other thing. Senator Dodd came in late, but has actually offered legislation in this area, so I want to give him credit for that. Connecticut is the only state here with 100 percent representation. (Laughter.) Thank you very much. (Applause.)

END 11:58 A.M. EDT