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	U.S. Department of Health and Human Services

TESTIMONY BY:	TOMMY G. THOMPSON, SECRETARY OF HEALTH AND HUMAN SERVICES
PLACE:	Oral Testimony Before the House Ways and Means Committee, Washington, D.C.
DATE:	April 17, 2002

Chairman Thomas, Representative Rangel, distinguished committee members, thank you for inviting me to discuss our proposal for strengthening and improving Medicare.

Medicare has provided security to millions of American seniors since 1965. But at the dawn of the 21st century, its promise is threatened by outdated and inadequate benefits, limited protection against rising medical costs, and a traditional government plan that often fails to deliver responsive services to recipients or ensure high-quality care.

President Bush and I are committed to modernizing the Medicare program and strengthening it for all seniors, and the President outlined a visionary plan.

At the heart of this plan is a belief that we must provide better and more efficient delivery of services, and evaluate Medicare in a deliberate and thorough manner.

Medicare is in serious fiscal trouble, which will only deepen in coming decades unless we act now. While we all want to provide a drug benefit for seniors, it cannot be done in a vacuum. It must be accompanied by fundamental reforms that keep benefits secure. The framework for bipartisan legislation that the President and I have proposed includes several important principles:

First, all seniors should have the option of a subsidized prescription drug benefit as part of modernized Medicare. Everyone benefits from new drugs that are being developed through miracles of science, and Medicare beneficiaries should and must have greater access to lifesaving therapies.

But it's also clear that if we add a drug benefit without comprehensive modernization of the system, we will only deepen the financial crisis Medicare faces in coming years. That's why the President's plan touches on every aspect of Medicare.

Second, modernized Medicare should provide better coverage for preventive care and serious illnesses. By preventing disease and illness to begin with, we not only save substantial financial resources but also save lives.

Third, today's beneficiaries and those approaching retirement should have the option of keeping the traditional plan with no changes.

Fourth, Medicare should provide greater insurance options, like those available to all federal employees.

And there are several other important principles, including strengthening the program's long-term financial security, improving the management of the government Medicare plan, updating and streamlining Medicare's regulations and administrative procedures, and encouraging high-quality health care for all seniors. These principles are vital to quality care, and should be available to everyone in Medicare, period. In a nation as prosperous and compassionate as ours, it's the least we can do.

The lack of drug coverage among American seniors is among Medicare's most pressing challenges. Ten million Medicare beneficiaries have no prescription drug coverage at all.

In fact, Medicare beneficiaries and the uninsured are the only people in America today that commonly pay full price for prescription drugs. That is simply unacceptable. It must change.

The President is also committed to a Medicare subsidized drug benefit that protects seniors against high, catastrophic drug expenses. And we must also support the continuation of affordable prescription drug coverage now available to many seniors through retiree plans and private health insurance plans.

Our budget also provides $8 billion through the year 2006 to expand drug coverage to low-income Medicare recipients. This proposal is fully integrated with the President's Medicare modernization proposal and will enable states to take advantage of existing structures so that seniors will get help quickly. We have debated this issue long enough. Mr. Chairman, I want to work with you, and all members of this committee, in designing this vital drug assistance program. It is so important, and I look forward to your ideas and thoughts on better serving America's neediest seniors.

We must also act now to stabilize the Medicare+Choice system to ensure that current benefits and choices remain available to Medicare beneficiaries. We should not eliminate, by inaction, a program that many seniors enjoy.

We must come together now to take the sound, careful, and deliberate steps needed to improve the Medicare program for today's seniors and tomorrow's.

And we must start this process now - these issues have been debated on and off for years, and now it is time for action. I am here today to tell you that we stand ready and willing to work with the Congress to make this happen.

I understand that the Administration and the House have sometimes differed in their numbers. While we feel that we can provide this benefit for less than the $350 billion proposed by the House, let me make it clear that we are committed to the principle of a prescription drug benefit rather than to a specific figure.

Three decades from now, the promise of a financially secure retirement should continue to be a reality for America's seniors. As we join together, we can make sure it will.

Thank you for the opportunity to discuss this very important topic with you today. I look forward to answering your questions.