Media Roundtable Hosted by HHS Secretary Mike Leavitt, Department of Health and Human Services

Mike Leavitt, Secretary of Health and Human Services:  Been a few weeks since I've seen some of you.  The thought was we'd all just get together.  And I don’t have an opening statement.

Question:  How was Africa?

Secretary Leavitt:  It was a profound experience.  I worked – I learned non-stop for 12 days and I will – I'll refer all of you to my blog.  Where I kept personally – I'm not – in the evening with – try to write what I had experienced and learned during the day.  I found it actually quite helpful and it's on the HHS Web site if you're interested in it – [you are] more than welcome to take a look.  It was actually very helpful to see.  I went to South Africa.  I went to Mozambique, to Tanzania and to Rwanda and I observed U.S. investments and support in PEPFAR on AIDS and also the President's malaria initiative.  I met with the CDC staff in all four countries plus Kenya, NIH personnel as well as the Health Ministers and Heads of State in a couple countries.  And it was a deep learning experience for me.

Question:  Did you come away with a particular idea [that would] feed into the PEPFAR reauthorization?

Secretary Leavitt:  I came away with a – yes, a whole series of them.  And I've actually asked the CDC people on the ground to summarize the things that they have told me.  I think in summary I would say that we have made dramatic progress in the number of people who are being treated.  In 2003, there were I think 50,000 people in Africa who were on anti-retroviral treatment.  We now have 1.1 million.  About a million of those are on the continent of Africa.  It's - there were parts of the problem that were – and I had – I would have been – I have been intellectually engaged with this.  I've now become – I made a much deeper, emotional understanding. 

I saw the face of HIV/AIDS in a way I had not before in Africa.  (inaudible) was a – I was in South Africa and I went to a clinic and I sat in each clinic with people who were actually being treated.  I met a grandmother who was – I would say – in her late 60s or early 70s who was caring for two little boys – one 10 and one eight – who were her daughter's children.  And her daughter and her husband had died from AIDS.  There were four – she had four other grandchildren who were being cared for by another grandmother.  I met a third – this is – the orphan problem is a nightmare institute.  They're projecting that by 2010, one-in-six children will have died – had one parent or both parents die.  Another woman I met with was in the same place in South Africa.  She was 32-34 maybe.  She had her own two children and four of her sister's.  This is – I went to a place where I met with a whole series of grandmothers who – and the burden of this is falling on a generation of older women – is what it amounts to.  I went to a program that the U.S. supports where we're working to rally people around these children.  You know, hopeful things are happening with some of them, but it's a profound problem.

I went into – in Mozambique – to a series of places where we have combined treatment with research and how important – I'm understanding better how important it is that we actually conduct research where we do the treatment because you can literally see thousands of patients at one – at one time.  I don't know how much appetite you have for this, so I'll just – if you have other questions, I'm happy to respond, it was – but I did keep a fairly detailed record of my thoughts and feelings and some of the things that I've learned and things that I will be – some general – I mean, it's clear to me prevention is the key here.  We cannot treat our way through this problem and it is – it's clear that on the entire continent infection rates are not subsiding, that we're adding more cases than we are able to treat.  The momentum has not been broken.  I – insofar as we approach PEPFAR, that's one of the things I’m – I've asked the CDC people to focus on.  What are the policy changes that need to be made in terms of emphasizing prevention. 

Rwanda was a remarkable experience.  Now, on the way in from the airport the ambassador said to me to really understand Rwanda, you need to understand genocide.  And he said, “I'd like to stop if you're willing, at the genocide memorial.  It's not far from where you're going to stay.”  It was a Sunday afternoon, we just – we stopped.  Now, I've been at the site of various incidents – I mean I've been at the – I've been in Cambodia, the Khmer Rouge Killing Fields.  I've been at various Holocaust sites.  What was different about Rwanda was as I wandered through the museum, I was led by a guide who had imperfect, but good enough English, that we could talk about his own situation.  And I had a woman with me from CDC who was a translator – an interpreter, excuse me – and he showing me various atrocities that had occurred and there was a little video that played and the women from CDC sort of whispered in my ear, “That’s his sister.”

And I began to find out that everyone – everyone in Rwanda has a story about their family.  That woman from CDC was – you know, she's probably 30 – she told me she was 38 now.  She was in her early 20s and had gone out of the country when all the atrocities occurred in that 100 day period, she came back to find her family – her parents and older siblings had been killed.  She had four younger siblings that she then became the head of the household.  They – she gave up her education and raised those four and one other cousin – that's another thing that I'd begun to see is the burden of parents dying then falls upon others and it just – it cascades. 

But, Rwanda appeared to me to have – they appeared to me to have really caught the spirit of prevention.  I went to a middle school where I saw – it was actually a high school, somewhere in that – their structure's different – but they put together a, they were doing a dramatization where a male student, a female student, a bunch friends sort of acted out this very common event where the male student was pleading with his girlfriend of three years to have a sexual relationship and they modeled this conversation and why it was a bad idea and how to go about negotiating that.  And then, how do you deal with testing?  And encouraging each other to get tested and then they had tents outside the auditorium and the students would come out and have an opportunity to be tested after that and they told me that they'll have more than 80 percent of the students who will be tested as a result of what they're – what they're doing.  So, there are places in Africa where the testing message has – and the prevention message has been ringing true. 

But the fundamental problem is that if you have a society where it is expected that males, particularly, will have concurrent and multiple sexual partners at a given moment in time, the logarithmic progression of it is profound.  And so that's some of the nature of the problems that I observed and you know, there's a – I don't suppose the world has ever seen a more heroic or noble effort to try to stand in front of a disease.  There are non-profits from all over the world there.  There are other governments among our own – ours is the most profound and there's hardly a program anywhere in the country that we're not the lead funder of that has - is having an impact.  But we're still – we still have a mighty challenge there.

Question:  …I guess I would like to get into SCHIP…

Secretary Leavitt:  Right.

Question:  … and first off …

Secretary Leavitt:  I've covered that on my blog, too.

Question:  I guess I would just start with an open ended question as to why the new guidance for states at 250 percent and above the poverty level is necessary and will you consider as many lawmakers and governors are asking you to do to put this guidance through the formal rulemaking process?

Secretary Leavitt:  First let's make clear that this administration supports the reauthorization of SCHIP.  We believe it is a very important program.  That is a program that serves low-income children.  This rule makes our view that it should serve low-income children clear.  It is finding the low-income children who are yet un-enrolled – is hard work, but that's the population we most need to find.  They have unmet needs.  I'm sure that states would find it easier to have the federal government pay for the children of families with good incomes and then call that progress toward a goal of having everyone insured.  We believe that every American needs to have access to an affordable basic insurance policy.  The question is, how do we get there? 

Do we use SCHIP as the vehicle to ensure every American or at least every American child or do we take on that larger question of how we get insurance for every American and you'll – I think you've probably all seen the new census figures, again, it becomes clear that the problem of un-insurance is getting bigger.  We need to take on the larger question.  The SCHIP proposal – we should reauthorize SCHIP and then we ought to get onto the issue of how we can get 16 to 20 million people insured by fixing a tax code.  Many of whom would be children who have no coverage now.  As you're aware, the SCHIP reauthorization is being proposed – many of those children who have better incomes, already have insurance. 

Question:  The formal rulemaking …

Secretary Leavitt:  Dennis, do you want to deal with the formal rulemaking question?

Dennis Smith, Director, Center for Medicaid and State Operations:  Well, the issue here is that there are current regulations and we believe that it was appropriate to provide additional guidance within those regulations and we've used state Medicaid director letters for years.  Previous administrations have used them for years in terms of (inaudible) regulatory guidance.  We believe that this was an appropriate vehicle to use because there were already regulation in the (inaudible), states already had the responsibility to prevent (inaudible) from happening.  The guidance is providing what we believe to be more effective ways of preventing substitution in the policies that we were seeing states come forward with.

Question:  Where did you come up with the 95 percent figure?

Smith:  Well, we believe 95 percent is aggressive, but doable.  As the Secretary said, we want to make sure states are serving those children first – that's who SCHIP was created for – we want to make sure they're not left behind.

Question:  Is any state at that level now?

Smith:  I think states are at that level.  Massachusetts has just gone to universal coverage.  Will be going to universal coverage.  I think we have states like Vermont that are very near that level already.  So, it's aggressive, but I think it's doable.  And I think it's – again, SCHIP was always meant for the low-income children.  States were given certain responsibilities and we just want to make sure those are met.

Secretary Leavitt:  I think this guidance very clearly demonstrates the bright line – this program was intended for low-income children and we need to focus on low-income children and as I said before, it's not easy to find them.  You have to seek them out, but they are the children who are most in need. 

Question:  Could you just clarify what will happen to children who are enrolled with different families over 250 percent?  Will they be forced out of the program after 12 months?

Smith:  No.  We made it clear – tried to make clear in the guidance that it should not affect any current enrolled.

Question:  So, they would be grandfathered in basically?

Smith:  The rules would not apply to those currently in the program.

Question:  And how would you compute the 95 percent – off which figures, because most states give sort of rolling estimate, you know, between…

Smith:  Well, we've done a – we've done an awful lot of work and in fact, took a fair amount of heat earlier this summer when we came out with the – contracted with the Urban Institute that in many respects says we were far more successful than what generally has been given credit for.  So, we will certainly work with states, different data sources to make those calculations and as I said, I think there are states that are close to that level now.  I think it is a doable goal.

Question:  Describe the…

Question:  How many do you think are close to that…

Question:  Let me ask you guys to describe the new U.S. census figures versus the number of children that are – during a comparable period are covered under Medicaid and SCHIP?

Smith:  Yes sir.  The numbers that census uses – as an example – first we'll all agree, there is a finite number of kids.  Right?  There are a finite number of kids below 200 percent of poverty.  The latest census data shows there are 30.2 million kids below 200 percent of poverty, which is actually lower in terms of numbers and percentage of total kids than there were in 1997, when SCHIP was created.  The census undercount of Medicaid has been well-established and has been a large part of driving the discussion about how many are truly uninsured.  Census shows that there's about 20 million kids that have been enrolled in Medicaid or SCHIP. 

The data that we have and we track – obviously when a state enrolls a child, they tell us they've enrolled a child – our numbers show we've enrolled 36 million kids in Medicaid or SCHIP.  So, that's almost 120 percent of the children who are below 200 percent of poverty.  So, how do you sort out all the rest of the data?  How do you sort out who is uninsured, who is eligible, but still uninsured?  Again, we provided the data from the Urban Institute earlier this summer and showed that the number is quite – it's much smaller than what people were crediting.  There was a great, oh, no we can't possibly be that low, but I think when you really get through the data itself and determine who is eligible for the program – states have been far more successful than what’s been given credit for.

Question:  So, the 700,000 uptick in kids as of the new census data, is that real or not real?

Smith:  Well, the uptick in uninsured kids actually is in higher income levels than the – rather than the lower income levels.  So, you know, we have again, you don't get full credit.  As I said, census showed 20.7 million kids enrolled in Medicaid or SCHIP and in fact, there are 36.1 of these kids.  When you get through the census numbers in where the uninsured kids are, it’s at those higher income levels rather than the lower income levels. 

There were – there was an increase of 300,000 kids below 200 percent of the poverty.  In Medicaid and SCHIP, there was between 2005 and 2006, there was an increase in Medicaid and SCHIP enrollment of guess what – 300,000 children.  So, it's not you know again, it's the dynamics as the Secretary says.  We are saying all these children need to be insured, but how do you best do …

Secretary Leavitt:   … their parents …

Smith:  …. and the parents.

Secretary Leavitt:  This is not a question of who wants children to be insured and who doesn't.  I think everyone wants every child to have access to an affordable basic insurance policy.  This is a question of what is SCHIP’s role in meeting that goal.  And we believe SCHIP was intended for low-income children.  And that we ought to be about the business of seeking them out, enrolling them, and assuring they have service.

We then ought to also be about creating a means by which every American can have access to an affordable basic insurance policy.  There are proposals on the table that would very clearly add as many as 16 to 20 million more Americans that could have insurance.  And that would include by the way a lot of the children that we’re talking about.

Question:  Mr. Secretary, if most of the uptick on uninsured children (inaudible) higher income children, that suggested the substitution you are so worried about is not taking place, that these children are leaving their workplace coverage and not getting other coverage, wouldn’t that then give justification to what states want to do, which is expand SCHIP to children in higher income levels?

Secretary Leavitt:  Well again then, that leads us to the discussion of what is the proper role of government?  Should we have a system where the government owns the system, and where the government insures everybody?  Or should we have a system where government organizes a system where everyone has access to a choice of insurance plans?

We believe everyone needs insurance.  We believe everyone needs to have – that every state ought to be dealing with the question of how to organize their marketplace so that those who are in moderate and high income areas, or categories have access to coverage.  And that is a – that is a – that is a separate issue in our mind from using SCHIP to assure that if you are elderly or disabled, or poor, that you would have access to coverage.

Question:  But you – so these numbers haven’t changed any of your position on expanding SCHIP further up the income scale?

Secretary Leavitt:  We believe SCHIP is for low-income children.  That was what it was intended for.  We believe that we ought – the question – the issue is not should we expand the number of people who have insurance.  The answer to that is yes.  But we do not believe SCHIP is the means by which that should be done.

Question:  … that the states are making – (inaudible) the states that have gone beyond (inaudible)  percent of poverty, which is (inaudible), we look now (inaudible) New Jersey, Connecticut that …

Secretary Leavitt:  With the government’s permission they have done so.

Question:  Right.  But to use the poverty level statistics in the definition of low-income, they will argue to completely (inaudible)  the reality of the cost of living in those states, that a low-income salary could be a couple earning $40,000 trying to get by in New York (inaudible)  a metropolitan area.  And that the gap that has opened up between affordability of coverage and these poverty statistics is so pronounced in those areas that it is simply crazy just to (inaudible) to the poverty statistics as a definition of what is really low-income.

Secretary Leavitt:  But again, I mean when you look at these – all of these states, and New York and New Jersey make those arguments.

Question:  And Connecticut.

Secretary Leavitt:  It is not the cost.  It is generally not the cost of health insurance though that is all that much different.  Because health insurance nationwide really does – it around the same thing.  It is the cost of other things that is why they are saying we have go to the higher income levels.  Because our housing is more (inaudible) all these other things are what cost more.

But let me just give you an example of Vermont, which nobody has said the cost of (inaudible) et cetera.  And Vermont is one of those states that 300 percent of the poverty level for kids.  They have a one-month waiting period.  They have had an $80 maximum $80 family contribution to their SCHIP program.  Out of income of – at 300 percent of the poverty level.

They are now going to cut their cost sharing in half to $40.  Again, not because they were you know – they are supposed to have effective policies up front to prevent that substitution from happening.  But with – those are the types of policies that are being adopted.  Made us concerned that the states really weren’t adopting you know, and really fulfilling their responsibility to make sure that that substitution wasn’t occurring.

Question:  …is a one-year waiting period appropriate for kids?

Secretary Leavitt:  There have been a number of states, especially early in the program that adopted 12-month waiting periods.  There are state – West Virginia has a 12-month waiting period now.  So it is – and more states had it earlier in the SCHIP program until there was greater pressure to reduce those waiting periods.

Let’s go up to you, and then we will come up.

Question:  How do you explain if most of the increase in the uninsured kids are higher income?  How do you explain, is substitution taking place as most of these kids are insured.

Secretary Leavitt:  Well it is very clear that substitution is taking place because we are seeing – we do see that loss whenever we add a government program.  But it is taking place in other populations as well.  And that is the reason we need to get on to the bigger discussion.  We need to have a conversation in this country about how we provide care or coverage to every American.  Not just children.  Children need insurance.  Adults need insurance.

We have SCHIP to assure that any child who is in a low-income circumstance gets the care they need.  But children in middle-income and children in high-income also need health insurance.  And right now, the system does not accommodate them in the way that it should.

Question:  Well if it’s up to the role of government, don’t a large majority or at least a majority of plans that are contracted for SCHIP, aren’t those product plans to begin with so that – I mean, still working through private plans?

Secretary Leavitt:  They are not private plans.  They contract with private insurers in the same way we do at Medicare.  But they are not risk taking plans.  They are not insurers.  They are not available to the general public.  They are operating under the rules the state establishes.  They are not in the market.

Question:  But what, I mean since your administration really granted a lot of these waivers, why suddenly now it has changed?

Secretary Leavitt:  Well you know I think the issue is these were not waivers for kids.  These were state plan amendments by and large.  The adults were (inaudible); the kids with higher income levels were state plan amendments.  I think the concern that we had as I said, was sort of in this shift of going to higher income levels and having less effective substitution prevention.  And an increase in the number of states going to those higher income levels.

We have – and there are – we have 12 states above 250 percent now.  We have probably half a dozen states now talking about going to those higher income levels as well.  So sort of before any more took place, we believed that it was important to get the guidance out there and say well you are contemplating …

(tape flips)

Secretary Leavitt:  There is a – there is a long history in Medicaid and in SCHIP.  Of states finding ways of being able to expand access to the dollars and in each case we have had to find ways of bringing it back to its original core mission.  And nowhere has it been better exemplified than this.

States have begun to define income in a different way so as to increase it.  And no one should be surprised that if states see an opportunity to have the federal government pay for 90-some percent of their – of the insurance on higher and higher income levels that they are inclined to try to get those dollars, and then call it progress.

We believe SCHIP was intended to be for low-income children.  And by continuing to protect that principle, we believe what we do is encourage the states to do the hard job of finding un-enrolled low-income children, as opposed to simply turning then seeking middle-income and higher-income children to go on a federally paid for plan.  We think that is going the wrong direction.

Again, I want to keep coming back to the fact that we are having this conversation in isolation about children.  We ought to be talking about the broader question.  How do we organize our financing system so that every American has access including all children? 

Question:  OK, I just have a follow-up question.  It is a bunch of states that are close to that 95 percent when you signed up for low-income kids.  But you mentioned Massachusetts and Vermont, and I was just curious of the other ones, how many and who are they?  Which ones, which states?

Secretary Leavitt:  I haven’t run down the specific list for you, but I think as we look at the new census data, for example and how many states the census defines as under 200 percent, and still uninsured but look at our Medicaid and SCHIP for that state, that percentage is much higher than what the census says.  So as you start going state by state, I think states will have more up to and we have offered in our discussion with states last week, or earlier this week we had a call with the states about helping them to define their data, to really determine what the denominator is and how many – to be able to calculate what penetration rate that they do.

But looking just very simply at the census data of how many kids are below two percent, and how many kids are enrolled in SCHIP or Medicaid for that state, you have a number of states that are, again you just – the numbers are much higher than what census would say.  So you would think that percentage would be much higher.

Question:  Dennis, can you clarify, because I know this is going to get important, the distinction between a plan amendment and a waiver, and what kind of authority you have in it. 

Smith:  Sure.

Question:  And New York, my – I think the Times keeps getting this wrong – that’s a plan amendment, not a waiver. 

Smith:  I’m glad you asked that, and I think it’s a good thing to clarify.  A state plan amendment which New York is – has submitted to go up to 400 percent of the poverty level which is $82,600 that is a plan amendment itself, and it’s just for the children.

The waivers in which adults were added to SCHIP – that was done through waivers, rather than state plan amendments.  The waivers for the parents and adults were done pre-DRA.  And again, to where we were trying to expand health insurance coverage, and in many respects sort of test out alternatives to Medicaid as providing coverage.

Since the DRA has been passed, and there is now much greater flexibility in Medicaid, we have been telling states, no, go to Medicaid through the state plan amendment and let’s move away from waivers.

Question:  What kind of a – I guess what I’m asking…

Smith:  This an important point on the question you asked.

Question:  Yes, what kind of authority do you have to turn down plan amendments, I guess that’s my question.

Yes in layman’s terms, and the states do – state plan amendment without any provision from the federal government, is that your point in making?

Smith:  State plan amendments are submitted to us for approval or disapproval.  So we have to act on them based on what the law, the regulations, and the guidance say to what they are supposed to be doing. And again, this is the now guidance that state plan amendments will be evaluated against.

Question:  Right.  But I think the ordinary [question] here is what they want to know is did you give permission for these states to go above 200 percent?  And you seem to be saying, but I just want you to make that clear.  

Smith:  No.  We did approve those state plan amendments for those higher income levels at earlier periods of time.  As I said, over time, we became increasingly concerned that states were not adopting effective crowd out provisions, which, again, is also their responsibility.  So we believe we needed to provide additional guidance to lay out for them, this is really what is expected.  Now state plan amendments are evaluated against that criteria.

Question:  And you have not rendered a decision on New York, right?

Smith:  They just responded, I believe, last Friday to the request for additional information.

Question:  Are you going to our states now, and (inaudible) from actually continuing to enroll children above (inaudible) percent?  Or New Jersey, they can keep doing this for the next year?

Smith:  Correct.

Question:  And then they have to stop?

Smith:  Well what they have to do is when a new applicant comes in at that point in time, then you look to the – you apply the criteria in terms of the cost sharing and the period of uninsurance.

Question:  But that’s 12 months time. Right now, they can continue doing what they’ve always been doing?

Smith:  That’s correct.

Question:  What, as you all heard what (inaudible) on Congress (inaudible) run around the legislative process, since the Senate bill obviously took up this issue and decided to deal with a lower match rate.  Do you – how do you respond to that charge?  Was it (inaudible) who ruined the legislative process in what has obviously been a very contentious discussion?

Smith:  I’d be happy to…

Secretary Leavitt:  Go ahead, and I’ll give you my thoughts when you are done.

Smith:  I don’t see it as an end run in that Congress has become increasingly aware of states going to the higher income levels as well.  Simply that we believed we needed to exercise our authority to do something that states, again, are all ready required to do.  We thought that was appropriate because of their responsibility to prevent substitutions.  We thought the guidance was appropriate.  We thought the guidance laid out important criteria that should be assessed.

Secretary Leavitt:  Let me respond to this, as well.  There is a policy disagreement that is – that has been existent for a long time, but it’s highlighted, currently, by the need for reauthorization.  Some believe SCHIP should be the vehicle by which we expand health insurance to greater and greater numbers of people of higher and higher incomes.  Again, they are – they have a core belief that it is the federal government’s role to ensure as many people as possible. 

And we believe that SCHIP and Medicaid should be used to cover low-income individuals.  Through the course of – since SCHIP was enacted in 1997 and since Medicaid was enacted in 1964 …

Smith:  Five.

Secretary Leavitt:  There has been an ongoing series of events where those who occupy the role at HHS and its predecessor organizations had to continue to refine the policies to keep these programs within their original intent, because there is a natural inclination on the part of states to continue to expand it more and more because it provides them a dollar they don’t have to appropriate.  And this is a situation where we believe that the original intent of the program was, in fact, not being met, but it plays into the very basic disagreement as to what is the role of government and what is the role of SCHIP so that the disagreement is not new. 

And you could look back over the last 20 years and see dozens of situations where guidance has been offered for similar reasons.

Smith:  And also, just in bear in mind, SCHIP is already a very good deal for states.  I mean Medicaid, the national match rate was 57 percent.  For SCHIP it’s 70 percent.  The House bill states would be able to get a 95 percent match.  For a state that’s a 50/50 Medicaid match rate could get a 95 percent match or a 70/30 state, you could get a 97 percent match rate. 

Secretary Leavitt:  We’re probably running out of time, so we probably only have time for one more question.

Question:  I have a question.  You’re developing the budget (inaudible) for next year, seeing as this entire debate over SCHIP has opened up a lot of tension (inaudible) how do you expect the President’s support to evolve in the coming year?  Are you laying the groundwork for a bigger fight next year over …

Secretary Leavitt:  We believe that it is important that the country wrestle with the larger question of how do we assure every American has access to an affordable base of insurance policy. 

We’d like to – the President has made proposals that we would like to see debated.  Others have made proposals that would dramatically move us towards the end of every American having access to a policy.  Incidentally, a lot of people who don’t are children in higher and medium income categories.  So we’re very hopeful that debate will occur.  And I believe that if we could get down to that discussion that there are areas in which we have some degree of commonality and we could make progress on this.

I think, let’s start with the widely held aspiration that everyone ought to have access.  And if we start from that point, I’ve had conversations with enough Members of Congress to deliver that we could get there if we could have a debate on it.  Let’s start with the tax code.  I find Republicans and Democrats who simply say it is indefensible that we would treat some Americans differently than others simply because of how they buy their insurance.

If we could have that discussion and solve it in one of a number of different ways, it would mean that somewhere between five and twenty million Americans who don’t have insurance now would.  So we hope very much that this discussion over healthcare evolves into the larger debate.  Now, in the meantime we need to reauthorize SCHIP and we’d like to get it done and we’d like to get it done soon.  And we’d like to get it done before September 30th, if possible in a way that would continue its original intent.  Now that may be a heavy lift under the current conditions.

Question:  And we don’t know what the conference report is going to come out looking like.  But it is the position still that if it comes out, say, we know what the administration’s position is if it looks like the House bill.  Is it still the position that if it ends up looking more like the Senate bill it will still be vetoed by the President?

Secretary Leavitt:  The President has made his thoughts well known on that, and we think that the program ought to be reauthorized and it ought to be done between now and September 30th.  We want to make sure that no child in any way has an interruption of their coverage.

Question:  And if it’s reauthorized along the lines of the Senate bill but with this new guidance in tact, it’s still a problem because the new guidance effectively would deliver what you want, correct, which is focusing the program on low-income kids.

Secretary Leavitt:  Well again, that’s primarily a budget question.  There are two issues here.  One is the number of children that are uninsured and the other is how much money.  If you are looking to get a lot of money, then your incentive is to represent that there are lots of uninsured kids and so I believe a lot of our disagreement, frankly, could be resolved with a math problem.  There’s a math problem and an ideology difference.

If we could resolve the math problem on how many children there are who fall into the category of eligibility, we could go a long ways towards narrowing our difference.

Question:  Mr. Secretary could I get a very – briefly get a reaction from you to the letter that Senator Kennedy sent to you today sort of outlining what he believes is evidence of political interference with Surgeon General Carmona when he was here and asking you for more documents to help him flesh out what went on.

Secretary Leavitt:  I haven’t seen his letter.

Question:  Mr. Secretary, regarding the importing of unsafe Chinese products, what steps have your agency [taken] to adjust the policy?

Secretary Leavitt:  Well we’re in active discussions, right now, with the Chinese.  We’re working towards a Memorandum of Understanding on how we can resolve issues related to standards.  I’ve had a delegation in China; they’ve had one here.  And we will be exchanging delegations again, very soon.  We’re working towards a Memorandum of Understanding that we hope will come later this year, or early next.

Question:  Is there any legislation on that issue that you are working on?

Secretary Leavitt:  I think Congress is likely to have a lot of conversation about it.  As you probably are aware, the President assigned me to head a working group of 12 government agencies, 10 members of the Cabinet and two others.  I spent most of the first part of August traveling to various ports and post offices and freight handlers and grocery distributors and food processors and so forth.

We have a team working in each of the 12 developing specific proposals.  Some time between now and the middle of September whenever – based on the President’s schedule will present what will be a strategic framework that will include some significant changes in the way we go about this.  We will then take the next 60 days to flesh in the specific implementation plans of that strategic framework.

During that period of time I expect to be having conversations with the Members of Congress who are interested in this subject to tell them of the work that we are doing and to try to inform their debate as best we can.

Question:  Do you have any governors who are supportive of the new relationship guidelines?

Secretary Leavitt:  I don't have an inventory.

Smith:  We’ve heard positive comments from…

Question:  A handful?  A dozen?  Two dozen?

Smith:  A handful.

Question:  Anybody who will name themselves?

Smith:  I think Indiana put out a statement saying this is the right policy. And again, part of, you got to keep in balance in terms of, you create a whole other set of equity issues. 

I mean, if now you are at 300 percent of the poverty level and you can get coverage for $40 a month, what are [you] saying to all the other families who are at the same income level or even a lower income level who are responsible for their children's health insurance? 

Secretary Leavitt:  And with that thought in mind, I will come back to the point that this is a divergent point in the trail in terms of are we going to pursue a policy as a country that the federal government has responsibility to insure everyone, or are we going to pursue having everyone insured in some other means where we organize the marketplace to be certain that everyone has access to a series of choice, and that is the fundamental debate. 

If you have states like Vermont where a family with 300 percent of the poverty level can get insurance for $40 a month, because the federal government put a lot of money into it, there are going to be very few people who choose to stay in the private market.  Hence, we have a very significant philosophical difference of approach.  And I think that is why this is a pivotal moment in terms of how we construct our health care system.

Question:  Many believe that SCHIP will be extended at current funding levels for a month, for three months.  Would you recommend to the President that they include provisions to do away with these guidelines?  Would you recommend the President veto such an extension?

Secretary Leavitt:  Well we are hopeful that the way we authorize the program and have a clean reauthorization.  I won't speculate on anything beyond that.

Question:  Could you all be able to distribute the list of what you think the state's actual enrollment and how quick they have gotten to the 95 percent?

Secretary Leavitt:  Sure.

Question:  That would be really helpful. 

End.

Last revised: March 13, 2008