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Office of the Press Secretary

For Immediate Release February 29, 2000
                            AND BRUCE REED,

                             The South Lawn

10:15 A.M. EST

Now we have Bruce Reed and Chris Jennings here to answer any questions amplifying on the President's remarks. And afterwards the representatives from the Aging Advocacy Organizations will be going to the stake out outside the West Wing for any additional questions. Bruce.

Q There is a letter circulating in Congress amongst Democrats opposing further cuts in the Medicare program that are in the President's budget and I wanted to know if the President had a position on that and will the cuts be restored?

MR. JENNINGS: Well, as you know, we have an overall proposal that dedicates actually $300 billion of the on-budget surplus to the Medicare program to deal with the inevitable demographic challenges facing the Medicare program that this report well documents. The President's proposal, primarily in the out years after 2003, when the projected costs of the program are increasing, does have some proposals in Medicare modernization and competition that does save money for the program.

I think today, in fact, you're seeing the Finance Committee hold a hearing on competition which clearly will achieve savings within the Medicare program. So the issue of how much savings you're going to get from the Medicare program will probably be debatable. But I think that many people who are advocates for the program say anytime you can target savings in fraud and abuse, in efficiencies, in competition you should do that as a good manager of the program.

Where there are traditional cuts or reductions that people are concerned about we'll be working with the Congress on it. But I think it would be irresponsible not to deal with reductions in growth rates that would result from prudent management of the program.

Q How are talks going on the Patient's Bill of Rights? How far are you willing to go at this point in terms of changing the enforcement mechanism and negotiating on the right to sue?

MR. JENNINGS: The conferees meet on Thursday. We're pleased that that finally is occurring. There have been staff discussions in the interim period. It's unclear how fruitful they've been. Our sense from talking directly to the members, however, is that many members on both sides of the aisle want to get this issue resolved quickly. We think we can do that as long as we have a strong enforceable Patients Bill of Rights. The bill that clearly has gained the majority support by Republicans and Democrats is Norwood-Dingell. That is the legislation we think should be the bill that we work from within the conference agreement.

Any options on compromises or movements on enforcement need to be done in the context of whether the remedies and access to enforcement ensures that the rights are real. We're not interested in passing a patient's bill of goods. We're interested in passing a Patient's Bill of Rights. If it's in name only it's not something the President is interested in signing. We are open to options but they have to meet that criteria. This isn't the place or the time to negotiate. And I think in many ways those who want to see alternatives, it's incumbent on them to come up with options.

Q This report that the President released today, would you enlighten us, what's new in there? We already know how many seniors there is going to be in 20 years. We already know there is no prescription drug coverage. What's new here?

MR. JENNINGS: Well I believe -- this is the first report that I have seen that aggregates new data on a state-by-state basis on the challenges both the demographic and economic and health care challenges facing the program. Many members of Congress -- when you provide information on aggregate national level it does not hit them as clearly as it does when you have specific information to their individual states. I would suggest to you that -- I haven't seen information anywhere that talks about the number of Medicare beneficiaries who are between $15,000 and $50,000 who would receive absolutely no prescription drug benefit option if we decide to take an approach on the development of a drug benefit that only focused on the low income.

I think a lot of people have never seen the aggregation of states -- of some 15 states who have half of their population in rural areas who have little or no access to prescription drug coverage because they don't have access to managed care options that provide drug benefits or because they don't have access to even very unaffordable and undesirable medigap policies.

Those are just among a number of examples that I think I've never seen in any area. And I think broken down by states we hope will encourage the members of Congress to deal not just with the prescription drug benefit in the right way but also to deal with the inevitable demographic challenges that will burden the program with new financing issues, that although we're going to have to make the program more competitive and efficient to deal with those, under any circumstances we're going to have to dedicate more revenue to deal with that demographic challenge.

And right before the Congress starts developing their budget resolutions and as -- and just as the Finance Committee is developing their Medicare reform proposals we think this is just the right time to release this information.

Q With regard to the news from Philip Morris today --

Q Can you be specific about exactly about what you mean by more competitive, more efficient?

MR. JENNINGS: Sure. There are a series of Medicare fraud and abuse program integrity initiatives that no one would suggest we shouldn't move in. There are Medicare modernization provisions, for example, competitive pricing options for the Medicare program.

We do not have the authority today, on a nationwide basis, to negotiate just as the private sector does, for such goods as durable medical equipment and lab services. We believe that we should be able to do that. Likewise, we think we should make the managed care portion of the program more competitive by allowing plans to compete on price. They can't do that right now. And the President has defined -- the competitive defined benefit would do just that. Today, in fact, on the Finance Committee, they are specifically holding hearings on competition that will achieve savings for the program and make it more efficient over a long period of time.

We think that any time you can instill that while maintaining the basic fundamental social insurance concept to the program and making sure that you don't in any way undermine choices to beneficiaries without -- and don't inhibit the ability to ensure that they have an affordable option, that you should move towards doing that.

Q With regard to the news from Philip Morris today, is the Administration talking to Philip Morris or the industry and, if not, is this the kind of breakthrough that might prompt settlement talks on the federal lawsuit?

MR. REED: Well, we hope that this is a step forward. We have to view these developments with some caution because the tobacco industry spent $40 million to defeat the Tobacco Bill and has taken government regulation of tobacco to the Supreme Court to try to get it struck down.

However, is it progress with Philip Morris admits that cigarettes are addictive and admits that we were right to say that the government ought to regulate tobacco products? Of course it is.

Q Do you think they speak for the rest of the industry? Do you have any indication that that's the case? Or are they doing this on their own?

MR. REED: Well, I can't speak to that. They are the leading cigarette manufacturer. They control about 50 percent of the market. So I think this is a sign that sooner or later government regulation of cigarettes is inevitable.

Q Does the President's Medicare proposal face on Capitol Hill, realistically, especially with Republicans very concerned about the prescription drug benefit aspect and wanting to restrict that only to very low income elderly?

MR. JENNINGS: Well, I think that -- you know, the President often says that election years bring members of Congress on both sides closer to the people. And I think that in that vein, as you evaluate the data in this report and you just talk to Medicare beneficiaries throughout all income spectrums, that you cannot help but to conclude that if you're going to modernize Medicare the idea that you would means test it by benefits makes no sense.

If you did a low-income benefit -- I think we should just make this real -- let's talk about a woman who is a widow who has $20,000 a year. Her income is over 200 percent of poverty. So therefore, she would have absolutely no access to an affordable prescription drug benefit. She has none today. If she lives in rural South Dakota or North Dakota she has no options whatsoever.

Our belief is that if you're going to modernize benefit modernize the Medicare program, you've got to provide that option to all beneficiaries, but to make it a choice. Do we believe it's impossible to envision the Republicans moving that direction? I think there are Republicans already who are talking about having a benefit available to all Medicare beneficiaries. And we think that that will be a growing number once they understand the information and the realities of the program.

And there is obviously, as I say -- once you become closer to the people in an election year I think people want to respond. Clearly the President's message though is, let's do the Medicare prescription drug benefit in the context of broader reforms that make the program more efficient, more competitive, and also dedicates significant resources to increase the life of the program and deal with the demographic challenges. I think that that approach is gaining consensus on Capitol Hill, not decreasing.

And since it's the right position, we have confidence over time all members on both sides the aisle will get there.

Q Chris, some House Republicans only want to consider prescription drug coverage in the context of reforms, they're linking it with systematic reforms. Will the President consider separating them? What's his position on that?

MR. JENNINGS: The President's position is as it always has been, that you should reform and modernize and strengthen a program in the context of overall reforms. Specifically, you should make the program more competitive. You should deal with program integrity. You should deal with the financing issues and you should deal with the drug benefit.

But all should be part of an overall package that strengthens the program. I think you will hear today, again, on the Finance Committee, that that's the desire of Republicans and Democrats. Now you can do reforms to the program that strengthen the program. You can do reforms to the program that undermine the program. Obviously, we're in the camp of the former.

And we're going to ensure that if we're going to move in that direction it strengthens the program among every aspect of the program.

Q Why is it that the White House believes that the very wealthiest group should get the same prescription drug benefit as the poorest? What's the reasoning behind it and the reasoning behind not even considering changing that?

MR. JENNINGS: Well, you know, again, I don't believe a $20,000 a year widow at 200 percent of poverty represents the various wealthy. And again, if you look at the vast majority of older Americans in this country we don't have many wealthy older Americans. And I don't -- and how you define wealthy I'm not sure. But obviously only -- I think in the numbers that we have in this report -- there is only 10 percent of the elderly over -- 12 percent of the elderly over $50,000. So if you get to $100,000 -- there is not many Ross Perots in the Medicare program, let me tell you.

And I think that you have a basic fundamental commitment to a social insurance program, you pay into a program, you get something out of the program. Let me tell you, if Ross Perot or anyone else does not chose to want a drug benefit because he has a great retiree health benefit he does not need to choose to do so. And in fact, I would suspect that he won't.

But the idea that you would completely alter a program that has served this country and its seniors and people with disabilities well and long makes no sense to us.

Thank you.