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February 18, 1999

BREAUX: TWO REPORTS OK PREMIUM SUPPORT MODEL FOR MEDICARE

WASHINGTON (Feb. 18) -- Sen. John Breaux (D-La.) said he is very encouraged by two analyses released this week, showing significant savings from his premium support model now being considered by the 17-member National Bipartisan Commission on Medicare Reform.

"I really believe our commission can reach an agreement that recommends how to best improve the current Medicare system and have very positive results for the 39 million Medicare recipients," Sen. Breaux said.

Sen. Breaux, co-chair of the commission, released a positive report received late this afternoon from the Congressional Budget Office(CBO) saying "the general direction of the proposal is clearly promising." A cover letter from the CBO Director Dan L. Crippen outlined three specific reasons why the Senator’s premium support proposal is being given serious consideration:

"First, we believe introducing competition into the Medicare program could help to reduce cost in both the short and the long run.....second, Medicare reform should enhance efficiency -- the productive use of medical resources...and could help reduce the costs associated with the inefficient use of health resources...third, reforms that improved efficiency could maintain the quality of health care while reducing its costs."

Sen. Breaux stressed that a commission staff analysis released to members late Wednesday showed that by the year 2030 annual Medicare spending would be up to $850 billion less than current spending. It also showed that beneficiary premiums would be 15 to 25 percent less than expected under current law.

That 30-page commission staff analysis concluded that the premium support restructuring plan will slow annual growth of the Medicare program by one percent a year, resulting in short-term moderate savings and compounded long-term savings.

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