Transcript as Delivered on Conference call on SCHIP Reauthorization

Operator:  Welcome and thank you all for standing by for today’s HHS conference.  Your lines have been placed in listen-only mode.  Today’s conference is for credentialed press only.  During the question-and-answer portion if you would like to ask a question, press star one on your touch-tone phone.  And now I’d like to turn the conference over to Ms. Christina Pearson, ma’am, you may begin.

Christina Pearson:  Thank you.  Thank you everyone for joining us today to receive an update on SCHIP activity.  Just a couple of notes we have HHS Secretary Mike Leavitt is speaking first, and then we will open up to your questions.  Secretary Leavitt is here to answer your questions as well as CMS Acting Administrator Kerry Weems.  So, Secretary Leavitt.

HHS Secretary Mike Leavitt:  Thank you for joining us.  This has been an active week with respect to the State Children’s Health Insurance Plan.  And as indicated, our purpose was to make ourselves available to answer questions.  I’ll just make a couple of brief statements and we’d like to go directly to your inquiries.

I’d like to make – restate again – that the President remains committed to the reauthorization of this State Children’s Health Insurance Program.  He views it as an important part of the way we care for those who are poor in our nation.  We’re very pleased that the Congress has avoided any type of lapse in coverage or continuity among the various programs by creating the clean extension.  I would anticipate that as soon as that’s received, the President will be signing it.

The President has indicated, however, that he will veto the bill that passed the Congress during this week.  As he has indicated before, there is no disagreement on the goal the widely held aspiration that every American has to have health insurance.  The President would like to see every American have access to health insurance that’s affordable.  There is disagreement, however, on the path and that’s what – that’s what the discussion now is about.  The bill that the Congress passed, rather than moving uninsured people to private insurance it motivates the movement of children who are insured in the private market to government insurance.  The bill has a price tag of $35 billion.  CBO indicates that for that price, roughly 800,000 currently eligible, but uninsured children would gain insurance and that 1.1 million who are currently insured in the private market would be moved to government insurance.  That’s the heart of the disagreement here.

We believe our efforts ought to be focused on poor children, and that poor children ought to be put at the front of the line.  And that we then need to get on with the discussion of how we assure that every American has access to affordable insurance.  Much has been made, as well, of the budget gimmicks that are used to finance.  The – our hope is that we can work our way through this disagreement and get SCHIP reauthorized, and get on to the discussion of how we can make certain that every American has access to an insurance policy they can afford.

With that, I’d just like to open it up for your questions.  I mentioned that the Acting Administrator Kerry Weems is here.  We also have Dennis Smith who runs the Medicaid program and SCHIP program and it’s possible we’ll call on him for technical assistance through this discussion.  So with that, Christina, we’re open for the conversation with our friends.

Christina Pearson:  Great.  And Sara, if we can just ask when reporters get on if we can have their name and media outlet, please.

Operator:  Thank you.  At this time, if you would like to ask a question, please press star one on your touch-tone phone.  You may withdraw your request by pressing star two.  Again, to ask a question, please press star one and record your name clearly when prompted.  One moment, please.  And our first question from Todd Zwillich with Capital News Connection, your line is open.

Todd Zwillich, Capitol News Connection:  Hi, Mr. Secretary.  Thanks for talking to us today.

Secretary Leavitt:  You’re welcome. 

Zwillich:  Senator Reid, the majority leader, in a ceremony today sort of compared this – the bill that they produced to, I think, something like a saturated dishrag.  That they squeezed all of it – that the Congress has squeezed everything out of it they can possibly squeeze, suggesting, I guess, that there wasn’t much room for negotiation in his eyes since they had gone so far in reaching this bipartisan agreement between Hatch, Grassley and himself and the House, and all of the rest of them.

With that message in mind, what do you see, in your expert opinion, as the way forward here in changing SCHIP?  Or are we just going to wind up, do you think, with a long term clean extension like the one we have now until November 16, and continue with that?

Secretary Leavitt:  In circumstances like this, where there is disagreement on basic philosophy it’s always been my observation that we are well to look for the things we agree upon and act on those.  I believe that there is a basic agreement.  There are a series of things, in which we have agreement.  One that SCHIP has been a very important program, and that it ought to be reauthorized.  Two, that there’s a need for us to have every American with access to an affordable policy.

Where the major disagreement comes is in how we help those who are in better off income situations, that is to say greater than 200 percent of the poverty line.  This bill would allow some who make as much as $83,000 a year to be on public assistance.  We think here are ways to be helpful to Americans who have need, but we don’t think SCHIP is the way to do that.

So my suggestions would be that we agree upon the things that we agree upon and get SCHIP reauthorized.  And then get on to the conversation related to how we help other Americans who also need help but are not poor.

Operator:  And our next question from Jennifer Lubell, Modern Healthcare Magazine, your line is open.

Jennifer Lubell, Modern Healthcare:  Yes, I heard that there might possible be further negotiations taking place in the House and the Senate and with the administration to try and get one last chance for a compromise.  How possible is that?  Are those rumors true?

Secretary Leavitt:  We expect that the President will veto this bill.  And that will likely trigger an override vote.  We expect that the President’s veto will be sustained.  And we’ll then get on to the discussion of how we can solve this problem.  We think that there is a solution, and the solution is to reauthorize SCHIP as it’s been – as it currently exists and succeeds.  Find the number that is required to sustain its growth into the future under the current eligibility rules.  And then get down to the discussion of how we can help other Americans.  There are proposals on the table that would assist millions of Americans to gain insurance, and that’s an important conversation.

We ought not to allow that conversation to be thwarted by an action on something on which we have a fair amount of agreement, which is the existing program.

Operator:  And our next question from Suzanne Struglinski, Deseret Morning News, your line is open.

Suzanne Struglinski, Deseret Morning News:  Hi, Mr. Secretary.  Can you fill me in, I’m sorry, I didn’t realize there was a clean extension until November 16.  I’m not sure where that proposal is coming from.  And kind of what – where do we go from there if all that passes at this point?

Secretary Leavitt:  This was part of the continuing resolution which was passed by the Congress, I believe, last night.  It will now go to the President who will sign it.  And it will leave the existing program in place with some additional funding for that period of time for 13 states who were without existing allotments remaining.

I might add, while I’m talking about the states, earlier in the week the President asked that I organize teams to work with every state to inventory their circumstance.  We had teams physically in 45 states conducting extensive discussions in one form or another.  I either spoke with the governors or had teams in 47 of the 50 states.  So I think we have a fairly good view of what the situation is.

We found that there are, all but 13 states who have existing allotments available that would allow them to continue to operate should there be some for of – a period where the program is not authorized.  Among the 13, we have been working to develop plans contingent.  We hope that they will not need to be used, but we are working with each of those states.

Operator:  As a reminder, to ask a question, press star one on your touch-tone phone and please record your name when prompted.

Our next question from Brett Coughlin, InsideHealthPolicy.com, your line is open.

Brett Coughlin, Inside Health Policy:  Good afternoon.  Thank you, Mr. Secretary.  Senator Grassley was talking to reporters Wednesday and he said that although he personally supports the President’s affordable choices initiative, that when it was brought to the Congress earlier this year, it didn’t get wide spread support.  Maybe you could talk about whether that initiative can work with SCHIP?  And why you think it can?  And maybe, also why you think it hasn’t garnered wider support in the Congress?

Secretary Leavitt:  Let me draw on my experience from the mid ‘90s when there was a substantial change in the Congress, and the power structure of our country.  We were in a divided government at that time, as well, but it was opposite.  The presidency was held by the Democrats and the Congress was now held by – at that point held by the Republicans.  There was a period of time, frankly, while the Republicans were ignoring any proposal that didn’t come from them.  And we ended up with a number of circumstances including welfare reform where there were bills passed by the Congress that were, essentially, driven by overwhelming majorities of one party and then they were vetoed.  And they had to start back and they did it, in some cases, two and three times until it became evident that for something to occur, to move the country forward it had to be a bipartisan effort.

I think we’re going through that process.  I think we’re in a period of time right now where the leadership of Congress are inclined to try to run things without bipartisan leadership.  Now there are members of both parties supporting both points of view, but the leadership of the Congress are in different places.  I think that we’re – it’s a natural process.  I think we’ll work through this.  I think there will be an opportunity for us to have alternative proposals discussed.

We believe that the base way to do this is to reauthorize SCHIP and then get down to the alternatives like the affordable choices or by – like the tax proposals that have been put on the table by members of Congress as well as the President, that would solve a fundamental problem and bring millions of people into the rules of the insured.

So there are a number of different alternatives and options that could be played.  But we just now need to get to the point of having that conversation in a serious way.

Operator:  Our next question from Richard Wolf with USA Today, your line is open.

Richard Wolf, USA Today:  Thank you, Mr. Secretary.  I’m out of town.  I don't know whether you can hear me or not.  I’m wondering if you disagree with the ideology on the current bill?  Does that mean that you guys just disagree ideologically with the current SCHIP program as it has morphed over these 10 years because it’s quite similar in terms of income levels, adults and the like to the existing bill, the proponents who they’ll even say they’re making fixes in some of that.

Do you guys have a problem with the program as it stands right now?

Secretary Leavitt:  The President supports the reauthorization of SCHIP.  He believes it ought to be focused on those who are low income and poor children.  The Congress in the past has chosen to define low income as being below 2000 percent.  The President agrees with that basic policy.

Now there have been – there are areas where, over time, the program has changed some, but we’re – we want to see a continuation of the existing program.

We do want to, as I have said before, I want to emphasize this, we want to have the conversation about how to assist those who are above that level.  But we do not believe that SCHIP should be the vehicle to pull the train of national health insurance.  We think we ought to be working on a means of – with SCHIP as the means by which we help poor children, and we ought to have its use from a variety of means to help others which have been outlined, and I could go into more detail if you’d like.  But I think that responds to your question.

Operator:  And our next question from Mary Agnes Carey with Congressional Quarterly, your line is open.

Mary Agnes Carey, CQ:  Thank you.  I just want to go back to the point that Senator Grassley was making earlier in the week and I don’t want to over interpret it, but it seems like he was saying the White House wants some of these other initiatives, perhaps, the health care tax initiatives tied into SCHIP.  Is that the bottom line that you are trying to get here?

Secretary Leavitt:  No.  We’ve made very clear, we desire to reauthorize SCHIP in a way that is consistent with the principles we’ve outlined.  We would, very much then, we would like, then to proceed with the larger discussion.

Carey:  So you don’t need to tie them in the same package.

Secretary Leavitt:  We do not view them as linked, but we do see them as complimentary.  And we do think that engaging in the second does help pave the way for the first.

Carey:  But I just want to be clear, you are not …

Secretary Leavitt:  We’re not linking them.

Carey:  OK.  Thank you.

Operator:  Susan Livio, the Star Ledger, your line is open.

Susan Livio, Star Ledger:  Thank you.  Two quick questions.  When do you expect the President to the veto the bill?  And going back to the two questions before, do you disagree with the way the program ha changed over time to include parents and to include children at middle income ranges?

Secretary Leavitt:  The – we don’t know when the bill will be presented to the President.  I would assume and this is my own estimate that the bill will be vetoed shortly after it is received by the White House.

SCHIP has changed in various ways over the last decade.  So has Medicaid and other laws related to how we assist low income families.  SCHIP, for a period of time, was used to provide some flexibility for adults because of the capacity to, in the law, to be flexible.  Congress, wisely, then added flexibility to the Medicaid program.  And since that time, Medicaid has been used as the means of being able to unite families on a policy among low income households.  And we have been moving adults off of SCHIP and on to Medicaid where they are best placed.

SCHIP is for kids.  It needs to be used for that purpose and that’s what we support now.

Operator:  As a reminder, if you would like to ask a question, please press star one on your touch-tone phone.  Your name is required in order to introduce your question.  Again, to ask a question, please press star one.

Secretary Leavitt:  Operator, it sounds as though we may have exhausted them and that’s – I want to wish everybody a good weekend and we’ll be back at it Monday.

Operator:  Thank you.  And this does conclude today’s conference.  You may disconnect at this time.

END.

Last revised: March 13, 2008