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Date:  September 11, 1995
For Release:  Immediately
Contact:  HHS Press Office (202) 690-6343

Statement by HHS Secretary Donna E. Shalala
on GOP's Plan to Raise Medicare Premiums

The Speaker yesterday stated that the Republicans' plan to raise Medicare premiums would cost beneficiaries only $7 more per month in 2002. Press reports, however, have made clear that Republicans are assuming $50 to $60 billion in savings over seven years from this provision, which would require far steeper premium increases.

In fact, to achieve the savings targeted by the Republicans for this provision, 39 million seniors and disabled Americans would be forced to pay three times the amount estimated by the Speaker in 2002. Indeed, this proposed Medicare premium increase would cost the average senior couple $2,666 ($1,333 more per beneficiary) over the next seven years and $515 ($258 per beneficiary) in the year 2002 alone.

The Speaker has suggested that beneficiaries, whose average income is only $13,000, would not mind paying more to "save" the trust fund. The fact is that not one penny of savings from the increased Part B beneficiary costs would help the Medicare Trust Fund. Rather, they would go into general revenues, where they would be used to pay for the Republicans' excessive and unnecessary tax cut. In fact, they would not need any of these savings if they simply reduced their tax cut for the wealthy.

This Part B premium proposal, along with all the other cuts the Republicans have suggested, still leave the Congressional Majority far short of their desired $270 billion Medicare target.

The President has shown how we can balance the budget and strengthen the Medicare Trust Fund without imposing any new costs on Medicare beneficiaries. Regardless of the merits of any proposal, we must make certain that older Americans and their families be provided with accurate and clear information.

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