"AARP Board Meeting: Improving Medicare For The Future"

Thank you, Marie Smith, for that kind introduction. One thing that I've learned in my time in Washington is that it's always good to be in the same room as a President, including a President-elect.

I appreciate all that you and your fellow leaders of the AARP are doing, and I thank you for inviting me to speak to you today.

Ladies and gentlemen, it's going to be an exciting year for health care in America. President Bush has put it at the top of his agenda.

The President and I share a vision for American health care - a vision in which medical liability has reasonable limits … a vision in which physicians can focus on the quality of their care, not the quantity of their paperwork … and a vision in which doctors, administrators, advocates, and government organizations cooperate to improve and enhance the state of American medicine.

We live in the greatest nation on earth, a nation of innovation and enterprise. I strongly believe that this vision is within our reach. If we work together, we can achieve real, lasting change for the common good.

The President and I strongly believe that the role of government is to protect the freedom of all people to take effective steps to improve their own health. We must renew our commitment to this principle by harnessing, not undermining, the market-based system that has made American health care an example of quality and innovation to the whole world.

Let me talk about two major programs that we can make work better.

First, we must work together to improve the Medicare system. Medicare has been a successful program for over 30 years. As you know, it has served our seniors well. But it currently faces major challenges. We must strengthen Medicare so that it will continue to be a program that our children and grandchildren can rely on, just as you and I rely on it now.

Medicare was created in 1965, and it continues to reflect the state of health care and health insurance in that year. Hospital stays were much longer 35 years ago than they are today, and many conditions can now be treated without hospitalization. New treatments, devices and therapies exist today that weren't even dreamed of in 1965. Thanks to medical science, serious illness is no longer a death sentence in America.

Our health care system has been transformed for the better, and health insurance has changed with it. But Medicare is still stuck in 1965, and unfortunately, so are its beneficiaries. Medicare's beneficiaries suffer from outdated and inadequate benefits, limited protection against rising medical costs, and a clumsy government plan that fails to deliver responsive services to recipients or ensure high-quality care.

America has changed. Medicine has changed. And Medicare must change to catch up.

Modernizing Medicare will make it more like the health coverage that my colleagues and I in the federal government currently enjoy. Like us, all seniors should have the choice of a health care plan that provides prescription drugs. We have good choices that offer good coverage.

I know that you and the members of the AARP want Medicare to do more, and I know that you deserve more. You deserve more preventive care, so you won't get sick as often; you deserve drug coverage, so you can afford modern medicine; and you deserve to choose the health care services that best meet your needs We must give seniors access to preventive medicine and new drugs that are transforming health care in America.

Last month in his State of the Union address, President Bush committed to providing an additional $400 billion over the next decade to improve and strengthen Medicare with comprehensive modernization, a prescription drug benefit, better insurance protection, and better options for all beneficiaries. This funding will strengthen and modernize Medicare to meet changing health care needs.

Reform of Medicare would be incomplete without reform of Medicaid. Medicaid is growing even more rapidly than Medicare. Both Medicare and Medicaid are vital to making sure all Americans have access to health care. But state Medicaid programs are under tremendous financial pressure, and beneficiaries risk losing coverage.

Sadly, the current Medicaid system is a bureaucratic and fiscal mess. It isn't delivering consistent results for the taxpayer dollar. Simply pouring more money into an outdated system will not bring that system up to date or repair its structural flaws. Failure to act would put the health insurance of thousands of Americans at risk because states can no longer afford to maintain their current programs.

The time is right to modernize Medicaid and strengthen how it works. Simply pouring more money into an outdated system isn't going to provide for better health care. Instead, the health coverage of thousands of Americans is at risk because states can no longer afford to provide it.

I'm happy to tell you that the President has proposed a plan to make Medicaid more effective, cover more people, and provide better health care delivery. If Congress adopts this plan, states will be able to improve health coverage for low-income Americans and build on the successes of the State Children's Health Insurance Program.

States will have more flexibility in covering optional populations, which account for a large part of Medicaid spending. They will gain the ability to target special needs populations, such as those suffering from mental illness and AIDS and those who prefer home and community based care.

Medicaid reform means holding states to performance standards. We're going to make sure this money is spent wisely. We're going to extend access while keeping health care costs under control.

Bipartisan reform of Medicaid is possible. We showed what could be done with welfare reform in 1996, when fresh thinking on both sides of the aisle won out over protecting the tired old status quo and millions of Americans moved from the dependency of a welfare check to the independence of a paycheck. It can work with Medicaid, too.

Ladies and gentlemen, the President and I need your help to realize all these goals. With your help, we can strengthen and refocus Medicare and Medicaid.

Let me remind you of something the great Vince Lombardi once said: "People who work together will win, whether it be against complex football defenses, or the problems of modern society." I strongly believe that, working together, we can achieve real, lasting change for the common good.

Thank you for having me here today. Thank you for listening. Thank you for your passion for America.

Now, I'm happy to answer your questions.

Last Revised: February 27, 2003