SCHIP Media Roundtable

Kevin Schweers, HHS:  Good morning.  Thanks for being with us.  We’re going to get started here in a minute.  We’ve got a number of people here in person with the Secretary, and those of you who are on the phone can respond with questions as the operator has instructed you to, and with that, we’ll turn it over to the Secretary to pick up.

HHS Secretary Mike Leavitt:  Have we validated that they’re there?

Operator:  (INAUDIBLE)

Secretary Leavitt:  All right.  First, may I – most of you may have heard.  Many of you deal with Christina.  Christina has given birth to a little girl, and she’s doing well as is her little daughter, and we’re all pleased about that.

I want to begin by again acknowledging that there is a widely-held aspiration in this country for every American to have health insurance.  We believe there is a clear strategy to accomplish that.  If a person is elderly or disabled or poor, government needs to offer them insurance and needs to pay for most of it.  Everyone else deserves to live in a state where they have access to an insurance plan that they can afford.

The President and others have made proposals that would unlock the barriers that result in many Americans unable to achieve health insurance.  The states, many of them, are working to develop plans.  There are barriers at the states have to being able to accomplish that.  The President’s made a proposal on a standard deduction; others have made proposals on refundable credits.  Some of those proposals have found themselves – found their way into plans in both Republican and Democratic plans.  There is a place to have a very fruitful conversation on how we can get every American insured.

Now, of course, we find ourselves right now focusing more on the question of how we assure that people who are poor and children have access to insurance.  The President has – let me say, months ago, members of the Congressional leadership made clear that they would send the President a bill he would have to veto, and they did as they said they would, and he has done as he suggested he would as well.  That bill will now find its way onto the floor of the House where there will be a vote to determine if it can be overridden.  We expect it will not.  We expect there will – the veto of the President will be sustained.

I think it might be helpful for you to– for me to at least enumerate what I believe are the areas where we agree and where we disagree, and I’ll be happy to respond to your questions.  First, I think there is again an agreement that low-income children who are currently insured under SCHIP should continue to be eligible and insured.  We agree that the program also needs to be funded at the proper level to sustain those who are currently eligible.  The President offered a 20 percent increase in the program in his budget, but he has also said if more money is needed that he was prepared to find more money to meet that policy goal.

Now areas on which we disagree.  We disagree that this program should serve some families who make up to $83,000 a year.  We believe that there are between five and 800,000 children who are currently eligible for SCHIP but have not yet been enrolled, and we believe that poor children should go first.

We do not agree that adults should be part of SCHIP.  SCHIP is for poor children.  Now, we have experimented with adults on SCHIP, and what we found is that when children and adults are mixed in the children’s health insurance program that poor children are left behind.  There are now alternatives for adults in that category under Medicaid, and we believe that’s where they should be served, not in SCHIP.

We disagree with the policy that would motivate middle-income families to cancel their private coverage to get government assistance.  The congress’s own budget office estimates that if this bill were to become law that is precisely what 1.5 million people would do.

Many of you know that I was Governor when we went through both welfare reform and SCHIP and was an integral part of the debate and crafting of both of those pieces of legislation.  This is reminiscent to me of welfare reform for a number of reasons.  You’ll remember we had a divided government.  The roles were reversed.  The President was a Democrat and the Congress was held by Republicans.  My own party passed a welfare reform law that did not have the active involvement of the administration.  The President vetoed that, sent it back.  It happened a second time.  The President vetoed the bill.  It was – his veto was sustained.  He sent it back.

At that point, we began to see a very important conversation that involved both the executive branch and the legislative branch of government.  To this point, the President nor any member of his administration has been part of this conversation, and we look forward to the post-veto discussion where we look – where we believe that this problem can be solved and must be solved.  SCHIP needs to be reauthorized, and then we need to get on to the bigger conversation, which is how do we assure that every American, not just children, but every American has access to an insurance policy they can afford?  There are proposals on the table that can and should be debated and accessed, and there’s no reason for us to wait.

Alright, with that, I’m happy to be responsive to your questions, both of you on the phone and those of you who are here.

Question:  Speaker Pelosi says she’s yet to receive what she calls an overture from the White House or from you on where to go if the veto is sustained on Thursday, and she said – well, Senator Reid has said no deals, but she said that she would entertain any overture as long as the bottom line is 10 million children covered.  What do you think of that baseline for negotiations?

Secretary Leavitt:  Well, that’s an encouraging offer on the Speaker’s part.  I would like to just unpack the 10 million, if we could, to demonstrate that there is a lot that can be agreed upon here.

Let me reconcile the 10 million for you.  If you write 10 million at the top of your paper, 6.6 million of those are children who are currently eligible and would continue to be eligible for SCHIP – should continue to be eligible.  1.7 million – and these are CBO [Congressional Budget Office] numbers – 1.7 million are eligible for Medicaid today.  They could simply be enrolled in Medicaid and put on the rolls of the insured today.

Question:  1.7 of the 6.6 …

Secretary Leavitt:  No, 1.7 in addition to the 6.6.  I’m now reconciling back to the 10 million that we’ve spoken of.  Point eight million, or 800,000, according to CBO – there’s some discussion about what that number is, but take that number for today – are eligible today for SCHIP.  And again, according to their numbers, one and a half million are currently insured who would leave their private insurance policy and pick up government-funded insurance.

I have been Governor for many years.  I implemented and administered this program.  I know how important it is.  I know that there are people who depend on it.  I also know it’s not easy to find the 800,000 people.  It’s hard work, but it’s exactly what government ought to be doing.  We ought to be looking for, enrolling and assuring that those children have insurance.  Now I will tell you I also know that it’s a lot easier to find someone who’s making three, 400 percent of the poverty line – $80,000 for a family of four – and say to them, “Why don’t you cancel your private insurance and come over and we’ll pay for you,” and then for the Governor to call that progress because we have enlisted people under the rolls of the insured.  That’s not good policy and it’s not progress.

At the heart of this issue is that point, and at the heart of this issue isn’t whether or not they need insurance.  They do need it.  It is what is the role of government here?  Do we want to have government insuring everyone, or is it the role of government to assure that the poor, the elderly and the disabled have a – are provided for, and then assuring that everyone else has a plan they can afford, and if they can’t afford it, then to help them buy it?  And I believe we can solve this problem, but we all need to be at the table.  The administration needs to be there, the congress, and both parties need to be there and we need to solve it.  And we’ll have to get through the veto, but we have confidence it will be sustained, and when it does, we will be ready to roll up our sleeves and go to work.

Question:  Has the administration, over the weekend, maybe, contacted the Speaker or any of the Democratic leadership and made an offer about where to go after Thursday?

Secretary Leavitt:  I think everyone concurs.  We’ve just got to play the veto out, and then hopefully after it has run its course, we can get down to the business of rolling up our sleeves and solving this problem.

Question:  Mr. Secretary, for the – there’s a number of advocacy groups and Democratic groups that have been putting a lot of political pressure on vulnerable Republicans who have stood with the President and voted against this bill.  I’m just wondering if that has had any impact, if you can comment on those activities, and what you think the response is among your party and the administration.

Secretary Leavitt:  Let’s acknowledge that there’s a lot of politics going on right now.  But the politics will last a matter of weeks.  The policy here will go on for decades.  We have to get this right.  We need to reauthorize SCHIP and then get on to the bigger conversation of how we assure that every American has access to an insurance policy they can afford.  Now it is – we all ought to at least acknowledge that there is this widely-held aspiration.  We have Presidential candidates who are all putting up proposals.  We have the Republican President of the United States who has said he wants to engage in this conversation and has put forward proposals that would allow as many as 20 million more people to be insured.

What’s absent from the debate is the willingness of Congress to have it.  They called the President’s proposals dead on arrival before he – before they even saw the proposals.  That’s at the heart of the problem.  We want to reauthorize SCHIP and then we want to get on with the bigger conversation.  We believe that substantial progress can be made during this Congress with helping Americans at every level of income, at every level of social-economic status, to have access to insurance policy, and there is an aspiration for that to occur and we ought to be meeting it.

Question:  Just to follow up on that, I mean, is this – what would – I don’t know if you’ve had any conversation with some of these people who are heavily targeted districts, but even if you haven’t, what would you say to them when they’re being – they’re being, you know, barraged with ads and (INAUDIBLE) you know, you’re voting against kids.  Has …

Secretary Leavitt:  I acknowledge, as I have, that there’s a lot of politics here, and there are those who say this is a good sound bite, but it’d be a lousy policy.  And the politics will run their course in a matter of weeks, but the policy will endure for decades, and we’ll work through this process.  The veto will be sustained, and at that point we need to get down to the business, rolling up our sleeves and getting to work solving the problem.

Question:  The CR ...

Schweers:  I just want to invite those on the phone to follow the operator’s instructions and chime in with questions whenever you choose.

Secretary Leavitt:  Why don’t we take one more question from those in the room, and then I’ll go to the phones, and then we’ll alternate back and forth.

Question:  What’s the status of the CR that runs out on November 16th?  What states are already showing signs of trouble …  funding shortfalls, and have you been in contact with those states?

Secretary Leavitt:  I have had contact either personally or through a team I sent up to the state.  I think 49 states – 48 or 49 states.  I mean, I’ve had personal conversations with the Governor and had a team in the states working with them to assure that there are contingent plans in place so that there would be continuity of coverage for children who are currently covered.

Now I know that there are states out there who, for example, have – who in the future could have problems if we don’t get this solved, but at this moment we’re working with all of them to assure – the President has instructed me to do so.  I’ve fulfilled that assignment and we’re working at a technical level to assure there’s a plan in place.

Question:  How do you – how does – how do you view the Congressional efforts to have the FDA regulate tobacco?  If Congress produces a bill, will you recommend it be signed or vetoed, or how do you think that policy is going?

Secretary Leavitt:  I’d like to focus, if we can, today on SCHIP, and …

Question:  Oh, OK.  Sure.

Secretary Leavitt:  … at some point I can get back to you on that.

Question:  I’ve got a couple questions.  It’s obvious you don’t support SCHIP for families up to four times the federal poverty level, but is there a demarcation line above current policy that the administration could accept?  Could you accept funding for children up to 250 or 300 percent of poverty in this program?

Secretary Leavitt:  Kevin, again, I want to just restate we believe SCHIP is for low-income children.  We also believe that there needs to be a way in which government organizes a market where every person has, and …

Question:  So no demarcation line you could support above the current policy, which is basically 200 percent?

Secretary Leavitt:  Well, that is our policy.  We want to solve this problem.  We also want to get on to the bigger problem where we think there are tools that will allow much more robust action on the part of the uninsured.  There are people who are currently within the scope of the law that’s been vetoed that don’t belong in a program of public assistance.  They do belong in a marketplace that has been organized by government to assure that they have a choice and that they have access and that they can afford.

Question:  So even going up to 250 percent you would be against?

Secretary Leavitt:  Our position is what it is, and I look forward to talking with Congressional leaders and finding a way to solve this problem.

Question:  Just one follow-up is on the adults coverage that you cited.  The administration’s routinely approved waivers.  You said it was an experiment and what it resulted in was poor children not getting coverage.  I mean, when did you come to this realization?

Secretary Leavitt:  Some time ago, because we’ve moved this last year over 700 adults – 700,000 adults off of SCHIP onto Medicaid.  There’s a long technical explanation as to why this happened, but the essence of it is Medicaid did not have the tools to deal with these issues until the Deficit Reduction Act.  The congress wisely provided those tools.  It became evident that by trying to insure adults on SCHIP that we just crowded poor children out.  I mean, the state of – there’s seven or eight states, or six or seven states that spend more on adults than they do on children.  I had a public discussion with Governor Corzine, recently, and 57 percent of the money in New Jersey goes to adults, and there are still tens of thousands of children under 200 percent who are not insured, and I – as I said to him, I acknowledge they’re not easy to find, but that’s our job.  That’s our job to go out and find them, enroll them and insure them.  It isn’t the using our limited money – and government always has limits – using our limited money to find people who are currently insured and making 70, $80,000 a year and saying to them, “Cancel your policy and come over and I’ll give you a free one.”  Now I know that’s a much easier proposition, but it isn’t progress.

Question:  (INAUDIBLE) poverty levels there would be a lower matching rate, that does seem to encourage some of the things that you’re concerned about.

Secretary Leavitt:  That – I acknowledge that there is some progress there, however, it doesn’t phase them out until 2012, and we already have tools under Medicaid to make that possible, but they – let’s strip this down to what it is.  This is about states wanting the money.  They have a place where they can insure these folks, but they – at a lower match rate, and they would like to have the higher match rate to insure their adults.  I understand that, but we ought to have poor children before we – taken care of before we start trying to relieve states of obligations they have made on adults who are in – who they have an alternative to cover.

Question:  Have you spoken to any of the states that have filed a lawsuit – the SCHIP lawsuit?  You said you spoke to Governor Corzine.

Secretary Leavitt:  I guess, you know, I have a very good – at least it seems to me, a very good working relationship with all of the governors, and I’ve talked to them openly and regularly about this.  Their lawsuit boils down to a policy question.  Do you put poor children first?  What we said in our guidance they’re suing us over, is before you start using your limited allotment to cover adults who make $60-70-80,000 a year, we want you to assure that at least 95 percent of the poor children who make under 200 percent have coverage, and they sued HHS over that, and that was – that’s certainly their prerogative, but if – the policy is the right policy.

Question:  Senator Grassley has indicated that he – his staff has tried to learn from you, from your agency, how to – how it’s possible to even demonstrate to the government that you’re meeting that benchmark, and he said that they’ve not received any answers from you, and have no evidence that it’s even possible to demonstrate that.  How can you …

Secretary Leavitt:  Well, we – there are states who regularly report to us what percentage they have.  Somehow, they find a way to do it.  We can just take the states’ position.  When they apply for waivers, they tell us, so they must have a way of being able to do it.

Schweers:  Teresa, I just wanted to ask if there’s any questions from those on the call, one last time and give them a chance before we wrap up here.

Operator:  Again, to ask a question from the phone lines, please press star-one.  Richard Wolf of USA Today, you may ask your question.

Question:  Hi, Mr. Secretary.  How are you?

Secretary Leavitt:  Good, Richard.

Wolf:  On the question of money, I’ve just been trying to do a little math.  You’re at $5 billion and they’re at $35 (billion), and you’re saying that you believe all the people currently in the program who qualify should remain.  They say, and I think CBO says – correct me if I’m wrong – that you need more than your $5 billion just to do that, and you’re saying you want to add five to 800,000 more who qualify and are not in, and you’re saying you agree that 1.7 million more should be in Medicaid, which I think would cost some money.  Can you say what approximate dollar figure you’d be willing to go up to, because it kind of sounds to me like you would need closer to the $35 than the $5 to do all that.

Secretary Leavitt:  There are two questions here.  One is a question of ideology …

Question:  I’m not asking ideology, just ...

Secretary Leavitt:  … and the second is what’s the number it takes to do that.  One is policy, the other’s arithmetic.  We need to solve the policy question and then we can work the arithmetic out.  I don’t believe it’s anywhere near the number you mentioned, but it – the President has already made clear, once we’ve worked the policy out, we’ll do the math and work together to find the money necessary to meet that obligation.

Question:  You mean policy on things like are we going to cover adults and children up to $83,000 and don’t mean policy on how we’re going to solve national health insurance and …

Secretary Leavitt:  That’s right.  That’s right.  I – these are not linked, but they’re both obligations, and we believe we ought to get SCHIP resolved and then we ought to get on to the bigger conversation about how we get every American access to affordable insurance.

Question:  So you’re not going to say …

Secretary Leavitt:  There are many who believe that this conversation isn’t occurring because they prefer to make incremental progress toward their vision of every American being insured by the federal government.  I hope that isn’t their motivation.  We’d like to work with them to make – to find a way for every American to have access to an insurance policy, and we think a key to that is solving some dilemmas that the states currently have they can’t solve.  As you know, there are dozens of states right now who are working to find a way to unlock the barrier to people having insurance, and they can do it if they get one, significant problem solved, and that is the blatant discrimination that occurs in our tax code with respect to those who buy insurance someplace other than through their employer.  That’s a very high percentage of those who remain uninsured, and the President has put forward proposals, others in Congress have put forth proposals, proposals are contained in democratic candidates for President and republican candidates, there are solutions on the table, and we ought to start having that conversation.

Now, clearly right now we’ve got to work our way through the issue on SCHIP.  We’ll do that, but once that’s done, we ought to be having a national dialogue and solving this problem.  We could leave this Congress, this administration, with substantial progress being made.  Now, would we solve it all?  I don’t know, but we can certainly make a lot of progress toward it.

Question:  One quick follow-up.

Secretary Leavitt:  Did you want …

Schweers:  Teresa, anymore from the phone?  I want to make sure we – those folks get the questions in.  Okay, then we’ve got time for one more.

Question:  What should people in Utah think about this SCHIP debate, do you think?  Probably the two most popular guys in the state are on opposite sides of this issue.  I know it’s a bit parochial, but it might be sort of a lens for the rest of the country.  What do you think they should think about this?

Secretary Leavitt:  There is a group in Utah working right now very productively on the question of how can they get every person in that state insured, and I think everyone would agree SCHIP is an important part of the formula for getting it done.  It ought to be insuring poor children.  I think they clearly also understand that in order to solve that problem, they’ve got to have other tools that are currently not available to them, and they and every other state in the country needs to deal with this.  And every American deserves to live in a state that has solved that problem, but they need the congress to authorize the tools and then let the innovation begin.

Question:  When was the last time you chatted with Senator Hatch about SCHIP?

Secretary Leavitt:  Oh, I see him often.  He’s a good friend.  As many of you know, he – I managed Senator Hatch’s campaigns for while, so.

Question:  Well, can you and he make progress on this issue, do you think?

Secretary Leavitt:  Well, we have an ongoing discussion that I feel is productive and I have – I have a lot of admiration for him and he seems to treat me well, so hopefully when we get this veto over, that can be built into something more productive.

Secretary Leavitt:  Alright, thank you all.

Question:  Thank you, Mr. Secretary.

Question:  May I ask you about (INAUDIBLE) or do you want to ...

Secretary Leavitt:  I’d like to do that a little later.

Question:  Another time, then.  OK.  Thank you.

END

Last revised: March 13, 2008