Medicare provides an essential source of health security for our nation's senior citizens. But the imminent crisis in Medicare is very real. According to independent trustees of the Medicare program -- including the secretaries of Treasury, Labor, and Health and Human Services and the commissioner of Social Security -- the Medicare trust fund will go bankrupt in the year 2002 if prompt and effective action is not taken to reform the program.
Experts say several factors are responsible for the explosion of Medicare costs. One is that the elderly population is expanding and is living longer. Another is the avalanche of new medical technology that fuels increases in costs, sometimes at twice the rate of inflation. Billing fraud has also contributed to the program's costs, according to the General Services Administration. In a recent report, it found that fraud -- committed by about 8 percent of Medicare doctors -- totaled more than $1.4 billion in 1993 and 1994. But most observers agree that the main reason for the program's collapse is its structure and operation.
Saving Medicare is not a Republican or Democrat issue. It is an American issue that will take everyone working together to save this important program for current and future beneficiaries. Therefore, in a bold effort to preserve and protect Medicare, Congress has passed legislation, the Medicare Preservation Act of 1995, that would keep our government's commitment to traditional Medicare; allow seniors the same health care choices available to other Americans; root out rampant waste, fraud and abuse; maximize the taxpayers' health care dollar; and guarantee solvency of the program.
Despite reckless accusations by those who are opposed to saving Medicare, under Congress' plan no one is going to lose Medicare benefits or the freedom to go to the doctor of their choice. The fact is that the reform measures we are proposing offer a number of market-oriented approaches to increase the range of health care choices that the elderly will have in the future. One of the most important reforms would let beneficiaries choose from a wide range of privately-operated health plans, with Medicare picking up their premiums. The idea behind this approach is that new, lower cost health care services will be created in response to the government opening up the medical system to a broader number of consumer choices. For those seniors who do not want to change plans, traditional Medicare will remain an option and seniors will always be able to switch back to it.
Furthermore, our current efforts to improve the health of Medicare include increasing spending by a rate of 62 percent over the next seven years. Let me repeat, preserving Medicare does not and will not require cuts in the program.
The truth is, if we make no changes to Medicare, it will go bankrupt in seven years. Medicare's impending bankruptcy is right around the corner--it isn't a problem we can foist off onto some future generation. Seven years from now, most of the 37 million Americans who receive Medicare benefits today will still be living and will still rely on the system. But if we don't do something to preserve this essential program for our nation's seniors, it will go broke.
Please know that under our proposal, seniors will be able to choose the health care program that best meets their individual needs, no one will be forced into a system they do not want, and government will not interfere in the relationship between patients and their doctors. Remember, we must act immediately to preserve Medicare for current retirees, and to protect the system for the next generation of beneficiaries. Congress is doing everything it can, therefore, to preserve, protect and strengthen a system that millions of Americans count on.
Our Medicare reform plan passed the House and was subsequently incorporated into the Balanced Budget Act which passed Congress but was, unfortunately, vetoed by Bill Clinton on December 6, 1995. Nonetheless, Congress remains committed to taking the necessary steps to preserve and protect Medicare for current and future beneficiaries.
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