The White House
May 17, 2002
President George W. Bush:
… the myth is somehow that if seniors are given choice, low income seniors will not benefit; that if we provide more options for our senior citizens to tailor plans that meet their needs, that somehow the low income will be left behind.
Part of my message today is I want to work with you to provide more choices and more savings for our seniors. (Applause.) I’m a person who trusts people. See, I trust the American people. The American people are fantastic, great citizens. We’ve got to trust people with their own choices in life. I’d rather have the American people make choices than the federal government make choices on their behalf. (Applause.)
We need a fair system of competition. We need a system that guarantees that patient protections and all of Medicare’s required benefits are included in every choice; a system that encourages additional benefits and options for better care at lower cost, including improved medical savings accounts.
That’s what we need to think about, and that’s where we ought to head here in America. The costs savings from competitive reforms are essential. They’re essential. If you notice, and the people will testify to this, that there are lower costs in Medicare plus Choice. And those cost savings in a Medicare plus Choice plan are very important for the future, for your children and your grandchildren to be able to have a Medicare system that works.
Comment:
President Bush has used “lower costs” in two contexts.
Many participants in the Medicare plus Choice plans have had lower out-of-pocket expenses and more benefits than available in the traditional Medicare program. This results in a “lower cost” for the individual Medicare plus Choice beneficiary. This has been possible because the Medicare plus Choice plans have been practicing virtuous selection by marketing their plans specifically to the healthy, thereby avoiding higher costs of chronically ill patients.
On the other hand, studies have confirmed that the Medicare plus Choice plans have higher costs per beneficiary than for comparable beneficiaries in the traditional Medicare program, primarily because of higher administrative costs. Competition of Medicare plus Choice options not only failed to reduce costs but actually failed to prevent increases in costs. This is an irrefutable fact. But when President Bush says, “The cost savings from competitive reforms are essential,” and “… a fair system of competition… a system that encourages additional benefits and options for better care at lower cost,” he is using “lower cost” in the context that the private plan options will reduce costs for the Medicare program. That is simply not true.
Since the private plans will always have higher administrative costs than the publicly administered program, the only ways to reduce costs for the program are to restrict benefits and/or to increase patient cost-sharing. Thus, President Bush’s version of Medicare modernization will allow options that provide only minimal benefits or higher out-of-pocket expenses or a combination thereof. If Medicare beneficiaries want more coverage, they will have to pay higher premiums. What will happen to low income seniors? They will have impaired access because of financial barriers erected under his proposal. And yet, President Bush states that it is a “myth… that somehow the low income will be left behind,” when given “more options to tailor plans.” The only options affordable will leave low income individuals behind.
We need to understand the problems with our health care system and the effect that various policy decisions would have on access, equity and costs. President Bush should lead the quest for the truth by dismissing his health care ideologues and bringing in serious health policy analysts that will provide an objective assessment of all options for reform. He trusts us. He trusts us with our choices. He’d rather have the American people make choices than have the federal government make choices on their behalf. He should trust us to tell him what choice we want in health care reform once we have an honest presentation of all of our potential options.