Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Tuesday, June 29, 1999 Published at 20:39 GMT 21:39 UK


Business: The Economy

Clinton proposes Medicare reform

Using the budget surplus to boost medical care

US President Bill Clinton has put forward a new plan to use part of the US budget surplus to expand Medicare, the programme that provides health care for elderly Americans.

He said that he would propose a benefit to pay for 50% of the cost of prescription drugs up to $5,000 (£3,000) a year.


[ image: More people will be able to afford expensive drugs]
More people will be able to afford expensive drugs
Individuals would have to pay an extra insurance premium of between $20 and $90 a month to qualify for the scheme.

"At a time of soaring surpluses, no senior should end up in the hospital because they cannot afford the cost of drugs," the President told Congressional leaders.

Rising cost of health care

The rising cost of health care has threatened the solvency of the programme established in 1965 to provide government health insurance to 39m retired or disabled people.

And the costs are expected to rise even faster when some 70m "baby boomers" born after World War Two begin retiring early in the new century.

President Clinton is proposing to transfer some 15% of the projected government's projected budget surplus over the next decade and a half - some $794bn - to keep the programme solvent until the year 2027.

More competition

The plan also includes elements designed to boost competition and curb the rising cost of medical care.

Medical care providers, including the increasingly popular group health plans, would be required to make their charges clearer so an individual could easily compare costs.

The administration estimates those cost savings at $64.5bn, while the extra costs of prescription drugs amount to $118bn over the next ten years.

Other preventative health care costs, like breast cancer and prostate cancer screening, would be fully funded under the new proposals.

Second attempt at reform

The Clinton health care reform package is far more modest that the radical attempt made at the beginning of his first term.

Then, an attempt to extend health care coverage to all Americans backfired when the Republicans convinced voters that the plan was far too bureaucratic and would reduce consumer choice.

Although the growing budget surplus makes funding reform easier, there is little hope of bipartisan agreement this time either.

Dick Amey, Republican House Majority Leader said he was "a little bit concerned that (President Clinton is) now wanting to advance a partisan effort."

The Republican-controlled Congress would prefer a series of tax cuts.

But President Clinton has argued consistently that the budget surpluses must be used to save Social Security, the elderly pension system, and Medicare first.

"We must secure and modernise Medicare, and do it now," he said.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Economy Contents


Relevant Stories

28 Jun 99 | The Economy
The trillion dollar surplus





Internet Links


The White House

Congressional Budget Office


The BBC is not responsible for the content of external internet sites.




In this section

Inquiry into energy provider loyalty

Brown considers IMF job

Chinese imports boost US trade gap

No longer Liffe as we know it

The growing threat of internet fraud

House passes US budget

Online share dealing triples

Rate fears as sales soar

Brown's bulging war-chest

Oil reaches nine-year high

UK unemployment falls again

Trade talks deadlocked

US inflation still subdued

Insolvent firms to get breathing space

Bank considered bigger rate rise

UK pay rising 'too fast'

Utilities face tough regulation

CBI's new chief named

US stocks hit highs after rate rise

US Fed raises rates

UK inflation creeps up

Row over the national shopping basket

Military airspace to be cut

TUC warns against following US

World growth accelerates

Union merger put in doubt

Japan's tentative economic recovery

EU fraud costs millions

CBI choice 'could wreck industrial relations'

WTO hails China deal

US business eyes Chinese market

Red tape task force

Websites and widgets

Guru predicts web surge

Malaysia's economy: The Sinatra Principle

Shell secures Iranian oil deal

Irish boom draws the Welsh

China deal to boost economy

US dream scenario continues

Japan's billion dollar spending spree