Clinton proposes $40 billion for Medicare; supports Gore's 'lockbox'
June 20, 2000
Web posted at: 6:24 PM EDT (2224 GMT)
By Ian Christopher McCaleb/CNN
WASHINGTON (CNN) -- President Bill Clinton declared Tuesday he would seek $40 billion over 10 years for the sprawling Medicare health insurance system, saying the money is needed for a new prescription drug benefit and to assure that Medicare providers can provide adequate service.
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President Clinton spoke Tuesday on Medicare.
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The president also voiced his support for Vice President Al Gore's call to place Medicare surpluses into an off-budget "lockbox," just as the House of Representatives approved a similar proposal.
"Medicare payments are too low in important areas," Clinton said at a Tuesday afternoon White House event.
His cash injection, formulated as part of the administration's mid-year budget review, is described as a "health care provider payment restoration initiative" intended to restore some of the money drained from payments to health care organizations that provide services under Medicare.
Many of those payments were reduced or eliminated with the creation and implementation of the 1997 Balanced Budget Act.
"Today, I am introducing a proposal to dedicate $40 billion over 10 years to ensure that providers can provide quality care," the president said.
Specifically, under Clinton's new plan, higher payment levels will be restored to hospitals, rural health care providers, teaching hospitals, nursing homes, home health care agencies, and some managed care plans -- all of whom saw their Medicare payments from the federal government slashed as the administration and the Republican-controlled Congress sought to hammer out their budget agreement.
Since that 1997 accord, many of these facilities have complained that their payment levels from the federal government were inadequate -- woefully in many cases -- and some have opted out of providing health services to Medicare recipients.
Clinton intimated Monday afternoon that as Congress and the White House take small steps toward finalizing the addition of a prescription drug benefit to Medicare, payments to providers would have to be increased with new infusions of cash, mainly because the money now available for Medicare use could not possibly cover both.
"Because of our remarkable prosperity, we can do both," the president said of the increased payments and the drug benefit.
Clinton took a quick shot Monday at a GOP prescription drug plan that may reach the House floor later this week, saying its dependence on the participation of private sector providers through subsidies would not ensure that millions of seniors who need help with their prescription costs would actually get a sustainable level of assistance.
The benefit proposed by the GOP, Clinton argued, would not be meaningful, because while insurers would be receiving the government subsidies, they would be granted leeway to define deductibles and copayments.
The plan championed by the administration and congressional Democrats calls for the direct addition of prescription coverage to Medicare.
The Medicare lockbox
With little fanfare, the president said he endorsed the idea brought forth by Gore some 10 days ago to take Medicare "off budget," meaning the Medicare trust fund could not be used for any other federal spending purposes. Current law treats Medicare surpluses as "on-budget"-- meaning they can be used to finance budget imbalances.
The Medicare trust fund ran a $12.5 billion surplus in 1999, and the Congressional Budget Office has projected surpluses of $247 billion over the next 10 years.
As Clinton spoke at the White House, the House engaged in a brief debate on a bill that would, for the most part, do just what Gore suggested. Introduced by Rep. Wally Herger (R-California) and a handful of other chamber Republicans, the bill would amend the 1974 Budget Act to take both the Social Security and Medicare surpluses off budget.
"Whatever is in Medicare," Herger said on the House floor Wednesday afternoon, "we're not going to spend it."
But some chamber Democrats were none too pleased with the appearance of the bill on the floor, which was considered under a procedure known as "suspension of the rules." When a bill is considered on the House floor under such a procedure, it cannot be amended, and debate time is limited.
Rep. John Spratt (D-South Carolina) argued that the bill was not considered in committee, and its existence was only revealed to chamber Democrats just three short hours before the chamber began its debate.
"There were no hearings, there was no testimony," Spratt said.
Still, the House registered little objection to the measure, passing it by a 420-2 vote. Spratt said Gore should be commended for presented an idea "embraced" by the GOP.
CNN's Major Garrett contributed to this report.
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