Changes to Medicare

I am writing to correct the inaccuracies in “Siphoning Medicare to Aid Health Plan Appears Risky” (May 2).

The authors are dead wrong about Medicare’s cost-containment record. Since 1986, while private insurance premiums have grown at a rate of over 9% per year, the Medicare program has kept its growth rate at 7.2%. At the same time, private insurance benefits have been cut back and Medicare benefits have been improved. There’s no disputing that Medicare’s cost-containment efforts have been more successful than private sector efforts.

The President’s Health Security Act will achieve both public and private sector reductions in the rate of all health care spending. Without health care reform, additional isolated cuts in Medicare will jeopardize the program for beneficiaries and providers. Today, Medicare pays providers adequately and our beneficiaries receive good care. But as long as private sector health care costs grow at an unconstrained rate, private payments to providers will always grow faster than Medicare payments.

The Medicare savings under the Health Security Act are not diverted to finance universal coverage for the entire population; they pay for new benefits for the elderly and disabled. These savings primarily come from reductions in the growth rate of payments to providers.

President Clinton’s health reform plan provides for universal coverage; it improves and protects the Medicare program; and it achieves real cost containment that will help ensure the solvency of the Medicare Trust Fund.

BRUCE C. VLADECK

Administrator

Department of Health and Human Services

Washington