Radio Address to the
Nation on Catastrophic Illness Medical Insurance
My
fellow Americans:
Few
tragedies hurt American families more than
catastrophic illness among our elderly. First, there's the human and emotional
cost of caring for a loved one who's severely ill; and then there's the
financial cost, one that can frequently wipe out the hard work and savings of a
lifetime. It was to do something about this tragedy that I proposed legislation
earlier this year that would provide catastrophic health insurance for our elderly.
It's
a responsible program that would limit annual personal expenses for Medicare
acute care services to $2,000. Beyond that point, Medicare would pay for
unlimited physician care and time in the hospital. The cost would be under $6 a
month, or $70 next year, in Medicare premiums. Although the premiums, as the
years go by, would rise to keep pace with program costs, they would remain
affordable. Here then was a sound program that would take care of the national
tragedy of catastrophic illness among the elderly. A program,
too, that would be financially sound and not jeopardize the solvency of the
basic Medicare system.
Then
I submitted it to Congress. Unfortunately, this sound, reasonable program has
been converted into a massive program that will impose a new tax on the elderly
and soon threaten to bankrupt the Medicare trust fund. On Wednesday, the House
of Representatives rejected a Republican-sponsored plan based on my proposal.
Instead, they passed a bill that will cost over $10 billion in 1989 and nearly
$100 billion by 2005 -- more than three times what my plan would cost. The
House threw out the basic affordable premium of under $6 per month and replaced
it with a surtax on beneficiaries' income tax of up to
$580 per year. That means an elderly person with a $6,000 to $14,000 income
would have his or her marginal tax rates raised from 15 percent, as promised in
last year's tax reform, to 22 percent in a single year -- and by 1992, to 25
percent.
Put
another way, a Medicare recipient with monthly income as low as $1,200 could
have his or her income tax increased by $580 per year. But even this huge
increase in taxes on the elderly isn't enough to finance the program. By 1995,
the costs will be so great they will threaten the entire Medicare trust fund.
And just after the start of the next century, in the year 2005, there will be a
$20 billion shortfall -- a shortfall that will have to be made up by more tax
increases.
So,
in summary, here's the situation: I promised Americans a plan that would
protect you in your retirement years from financial devastation brought on by a
catastrophic illness requiring prolonged hospitalization and medical care. I
fulfilled that promise and in return the Democratic House more than tripled the
costs, increased tax rates for virtually all elderly taxpayers, expanded the
program so much that in about 15 years it will run a $20 billion deficit and
threaten the solvency of the entire Medicare trust fund. And to top it off,
Congress would have the elderly begin paying a year before starting the full
plan.
I
know all of this is upsetting, but let me stress that I don't think there's
cause for pessimism. As perhaps most of you know, I've been out around the
country lately, and everywhere I go I hear protests from people like you about
the ways of Capitol Hill. I think the American people are doing a slow burn
over Congress' failure to face up responsibly to the problems. And I think the
public's temperature is going to rise even higher when it understands that
Congress has been trifling with a plan to provide elderly Americans with
insurance against catastrophic illness -- a plan that can work without taxing
the elderly into servitude.
As
we move along throughout the summer and the start of next year, these issues
will come increasingly into focus. I think it's then that a lot of
Representatives will start realizing that Americans like you are disturbed by
Congress' ways. But the health plan is not just another pork-barrel project
we're arguing over. This is a fight about protecting the health of our senior
citizens -- come to think of it, citizens like me. And doing
it in a way that doesn't bankrupt the elderly in the process.
So,
be sure to tell your Representatives and Senators that you support the
administration plan, not the high-taxing substitute for catastrophic health
insurance.
Until
next week, thanks for listening, and God bless you.
Note: The President
spoke at