THE WHITE HOUSE

Office of the Vice President

VICE PRESIDENT AL GORE, CONGRESSIONAL DEMOCRATS URGE REPUBLICANS TO

                    RECONSIDER USE OF ENTIRE SURPLUS
             FOR TAX CUTS RATHER THAN INVESTING IN MEDICARE

           Highlights New Statistics about the Importance of 
     Prescription Drugs for Medicare Beneficiaries in Rural America

Washington, DC -- Vice President Gore today joined Senator Daschle, Representative Gephardt, and other Congressional Democrats to urge the Congressional Republican Leadership to reconsider their proposal to use the entire surplus for a risky tax cut without dedicating one dollar to extending the life of the Medicare Trust Fund.

The Vice President underscored the unique historical opportunity that the nation has to secure Medicare for a quarter of a century and to provide Medicare beneficiaries with a much-needed, long-overdue prescription drug benefit. The Vice President also unveiled new facts that highlight the critical impact the Administration's Medicare proposal has for Medicare beneficiaries in rural areas. Earlier in the morning, the President and the First Lady released a new analysis underscoring the importance of Medicare for women.

"As a nation, we face a fundamental choice of how best to move forward into the 21st Century," said Vice President Gore. "We can pass dangerous tax cuts that imperil our prosperity or we can strengthen Medicare, pay off our debt, and pass responsible tax cuts that advance prosperity and protect families."

Today, the Vice President:

Unveiled New Facts That Underscore the Need for the Administration's Proposed Prescription Drug Benefit for Medicare Beneficiaries in Rural America. Nearly one in four Medicare beneficiaries lives in rural America. These Medicare beneficiaries tend to be older and sicker and have a disproportionate need for prescription drug coverage.

• One in three Medicare beneficiaries without prescription drug coverage lives in rural America. While nearly one in four Medicare beneficiaries live in rural America, one-third of those beneficiaries without prescription drug coverage live in rural America.
• Nearly half (48 percent) of all Medicare beneficiaries in rural areas lack prescription drug coverage, whereas only thirty-four percent of all Medicare beneficiaries lack prescription drug coverage.
• Rural Medicare beneficiaries across all incomes are less likely to have prescription drug coverage.
  • Forty-five percent of Medicare beneficiaries in rural America with incomes above $50,000 lack prescription drug coverage compared to 25 percent of all Medicare beneficiaries.
  • Forty-three percent of Medicare beneficiaries in rural America with incomes between $30,000 and $50,000 lack prescription drug coverage compared to 28 percent of beneficiaries.
  • Fifty-two percent of Medicare beneficiaries in rural America with incomes between $10,000 and $30,000 lack prescriptiondrug coverage compared to 36 percent of all Medicare beneficiaries.
  • Forty-five percent of beneficiaries in rural America with incomes below $10,000 lack prescription drug coverage whereas 34 percent of all Medicare beneficiaries in this same income category lack coverage.

The Clinton/Gore Plan Strengthens Medicare for a Quarter Century and Provides a Long Overdue Critical Prescription Drug Benefit. The Administration's proposal would:

• Extend Medicare solvency until 2027. The Administration's proposal dedicates $374 billion to Medicare, most of which helps extend the life of the Medicare Trust Fund and makes Medicare more efficient and competitive.
• Reduce the public debt. By locking away most of the surplus dedicated to Medicare, the Administration's proposal buys down the debt which helps boost national savings, leading to lower interest rates and a higher standard of living. Under the Administration's framework, the public debt will be eliminated by 2015.
• Provide a much-needed prescription drug benefit. Seventy-five percent of Medicare beneficiaries have unstable or inadequate prescription drug coverage. The Administration is proposing a new prescription drug option that is available for all Medicare beneficiaries.
• Eliminate the deductible and all copayments on all preventive benefits covered by Medicare, including benefits to prevent and detect osteoporosis, all cancer screenings, and diabetes.

The Republican Plan Makes No Commitment to Medicare. The Republican proposals invest nearly all of the surplus in tax cuts and invest nothing in Medicare. The Republicans also support Medicare reforms that would undermine the program. These proposals:

• Raise traditional Medicare premiums through a new premium support proposal which mostly produces savings by raising premiums for traditional Medicare.
• Do not dedicate one dime of the surplus to strengthen Medicare. Independent analysts agree that the retirement of the baby boomers will require additional revenues to adequately finance the Medicare program for the next generation. Without this investment, Medicare would have to grow at a rate at 60 percent below the per capita growth rate projected for the private sector.
• Reduce provider payments excessively and include no relief for providers in need today. The Republican proposals extend most of the Balanced Budget Act (BBA) policies that save by reducing provider payments. They also do not include any financing to ease providers who have been excessively cut by the BBA that need some immediate relief.
• Do not provide for a meaningful prescription drug benefit.
• Raise age eligibility to 67 which would increase the number of uninsured Americans;
• Impose new copayments for home care and nursing homes that cause higher out-of-pocket costs for some of the most vulnerable Medicare beneficiaries. This is particularly important for rural beneficiaries who are sicker and poorer and more likely to need home health services.

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