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REMARKS BY:	DONNA E. SHALALA, SECRETARY OF HEAL TH AND 	HUMAN SERVICES
PLACE:		1999 Medicare Trustees Meeting, Washington, D.C.
DATE:		March 30, 1999

In this Easter and Passover season, it's worth remembering that Medicare brings freedom from fear - and hope for renewal - to every member of our national family. That's why I'm pleased that for the second year in a row, we have very reassuring news.

Last year, we announced that the Medicare reform package that was part of the Balanced Budget Act extended both the short term and long term outlook for Medicare. The solvency of the Trust Fund was pushed back 7 years to 2008, and the Medicare actuarial deficit - in other words, where we will be 75 years down the road - was cut in half.

This year we are announcing that the solvency of the Trust Fund has been pushed back another 7 years. The Medicare Trust Fund is now solvent to 2015. And the Medicare actuarial deficit - where we will be 75 years from now - has been cut an additional one-third.

The groundbreaking achievements I noted last year - combined with the dramatic performance of the economy - brought us to where we are today. It's a place few people would have predicted just two short years ago.

In the last two years, we extended the life of the Trust Fund by a full 14 years - and cut the actuarial deficit by 66-percent. This means we have more time to work together. More time to plan. More time to build on the amazing progress we've already made.

We got here not by luck or guesswork. It took hard work, courage and skill. What are the reasons for our success?

Number one: We stopped the river of red ink and balanced the budget for the first time in 30 years - ending the deficit and strengthening a robust economy.

Number two: We passed - and began implementing - the bipartisan Balanced Budget Act, which reformed the way Medicare payments are made.

Number three: We cracked down big time on waste, fraud and abuse - and in just the last two years returned over 1.2 billion dollars to the Trust Fund. This is the first time in the history of Medicare that an Administration's effort to end waste, fraud and abuse has been identified as having a positive impact on the Trust Fund. The leadership and hard work of the Department's Inspector General, the Health Care Financing Administration and the Department of Justice have been outstanding.

Number four: We modernized the benefit package by adding important prevention services - including flu shots, mammograms and prostate cancer screening.

And maybe most important: We vigorously managed Medicare. I'm talking about management that is hands on; holds people accountable; introduces new systems; and responds to changing conditions. This Administration has had the toughest management team in the history of Medicare.

We still have a lot of work ahead of us. But today's Trustee report is a roadmap for getting us where we need to go.

As the President said in his State of the Union Address, Congress must set aside 15 percent of the surplus for Medicare. Setting aside 15 percent of the surplus would extend the life of the Trust Fund another 12 years, to 2027. We are heading for doubling our 65-and-over population by 2030 - from 39 million to 78 million beneficiaries. That means we need both new revenues and new reforms.

Program reforms are very important. But we have principles that shape our modernization strategy. We must keep our compact with the American people.

We will not approve a plan that leaves people sicker or poorer.

We will not shift significant costs to beneficiaries - or put them at undue risk for future costs.

We will continue to add competitive reforms.

In addition, with seniors living longer - and often in the grip of chronic diseases - we must continue to modernize the benefit package to improve the quality of health care, and offer some relief from the burdensome cost of prescription drugs. Health care is changing. Because of scientific breakthroughs, we are now substituting drugs for hospital stays, operations and other procedures. Drugs are an integral part of a modern American health care system - and must be part of a modern Medicare benefit package.

Finally our reform plan must be clear, understandable - and have the broad support of the American people.

I already noted that today's great news means we have a little more breathing space. But even though we have more time - we don't have a minute to waste. We must keep working for a consensus on how to protect and modernize Medicare. We must keep the promise we made 33 years ago to America's senior citizens. And we must keep faith with our children and their children - that Medicare will be strong, solvent and affordable for them in the future.

That may seem like a lot to ask for. A lot to work for. Even a lot to hope for. But by preserving Medicare for our national family - we are acting in the best tradition of every family - we are taking care of our own. Thank you.