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Office of the Press Secretary

For Immediate Release June 24, 2000
     Urges Congress to Modernize and Strengthen Medicare This Year

In his weekly radio address, the President will announce that next week he will send the Congress a proposal to strengthen his Medicare prescription drug benefit by: specifying his catastrophic protection benefit; maintaining the beneficiary premium at the same level even with the enhanced benefit; starting the program one year earlier; and providing immediate payments to managed care plans to provide a prescription drug benefit. He will propose to add $58 billion over 10 years to finance these changes. Finally, the President will reiterate his commitment to add $40 billion over 10 years to: increase Medicare health care provider payments; support the Vice President's proposal to take Medicare off budget and use the resulting savings from debt reduction to help extend the life of Medicare to at least 2030; and maintain critical structural reforms that will be needed as the baby boom generation retires.

PRESIDENT UNVEILS ENHANCED PRESCRIPTION DRUG BENEFIT. The President will announce that he is improving his Medicare prescription drug benefit by:

By adding $58 billion over 10 years ($39 billion over 5 years), the new total cost of the Medicare prescription drug benefit would be about $253 billion over 10 years ($79 billion over 5 years). PRESIDENT'S PLAN - NOT REPUBLICAN PLAN - PROVIDES AN AFFORDABLE, ACCESSSIBLE, MEANINGFUL PRESCRIPTION DRUG BENEFIT.

President's plan is a Medicare benefit - House Republican private plan is not. Under the President's plan, all beneficiaries - including those in areas that are rural or otherwise underserved - would be guaranteed a defined, accessible, stable benefit for the same premium. Medicare would subsidize beneficiaries directly and pay for prescription drug costs like any other Medicare benefit. Plans would not come in and out of different market areas every year, and premiums would not vary from plan to plan and place to place.

In contrast, the House Republican proposal relies on private insurers who themselves say they will not participate in this flawed plan. Medicare would not provide a single dollar of direct premium assistance for middle-class Medicare beneficiaries (any senior with income above $12,600). Instead, Republicans rely on a flawed "trickle-down theory" that would end up subsidizing insurers, not seniors. A rural senior would be at particular risk of facing excessive premiums since insurers would likely face little competition and less incentive to offer affordable coverage.

President's plan has a meaningful benefit - House Republican private plan does not. Under the President's plan, Medicare would guarantee that all participating beneficiaries would pay no deductible, pay 50 percent coinsurance up to a limit, and have their out-of-pocket spending limited to $4,000 annually. In addition, all medically necessary drugs and access to local pharmacies would be ensured - so that seniors would have a choice of pharmacies and needed prescription drugs.

Under the House Republican plan, Medicare beneficiaries would be put at risk. Private insurers would define deductibles, copays and benefit limits, promoting competition on confusion rather than price and quality. Because insurers charge one premium for all enrollees - no matter how sick - they could discourage enrollment by the oldest seniors and most disabled beneficiaries by offering no deductible and low copays, but also a low benefit cap that leaves a large gap in coverage before the stop-loss kicks in. Moreover, private plans could limit access to pharmacists and needed medications. The so-called "choice" under the Republican plan is a false one - there is no assurance that beneficiaries could easily access medically necessary prescriptions and no certainty that they would be able to use their community pharmacist.

President's plan ensures better benefits for lower premiums. Under the President's plan, beneficiaries would pay a lower, stable premium for a better benefit. The premiums would be $25 per month in 2002, $26 per month in 2003 and would have a zero deductible benefit with a $4000 catastrophic stop loss protection benefit.

The House Republican plan would not even provide a benefit in 2002. In 2003, although premiums and benefits would vary from plan to plan, Republicans claim that the premium would average $37 per month - over 40 percent higher than the President's plan premium of $26 per month. This is a difference of over $130 per year. It would be an even higher premium in different parts of the country and it might be for a benefit that has a $250 deductible with a $6,000 catastrophic benefit.

PART OF THE PRESIDENT'S OVERALL MEDICARE PLAN. This improved prescription drug benefit is part of the President's overall plan to strengthen and modernize Medicare. This plan includes:

PRAISES SENATE ON PROGRESS TOWARDS BIPARTISAN CONSENSUS. The President will highlight the encouraging bipartisan vote this week in the Senate in favor of Senator Robb's amendment to provide a true Medicare prescription drug benefit. He will indicate his hope that the Congress can work together on a bipartisan basis to pass a prescription drug benefit that provides real coverage, not political cover.