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Office of the Press Secretary

For Immediate Release September 12, 1993
                             PRESS BRIEFING
                             IRA MAGAZINER,

September 12, 1993

The Briefing Room

3:35 P.M. EDT

MR. GEARAN: We'll have an opening statement on camera by Ira Magaziner, and then he will be joined here with Ken Thorpe, who is the Deputy Assistant Secretary for Health Policy at HHS; Nancy Ann Min, the Associate Director for Health for the Office of Management and Budget. After Mr. Magaziner's statement there will be no televised coverage of the rest of it, although it will be an on-the-record briefing.

Mr. Magaziner is a senior advisor to the President. We have a sheet on it. You will be provided paper on this. Why don't we, with all deliberate decorum, have Mr. Magaziner join us.

MR. MAGAZINER: Good afternoon. I'd like to thank you all for coming to what will be the first in a series of briefings on health care as we head towards the President's speech on September 22nd.

First, I'm sorry to announce that we've already lost a serious source of health care revenues that we'd expected. If we'd only had the good sense to charge for all the copies of the draft plan that are all over town, we probably would have solved all the financing problems.

Q What did you expect? (Laughter.)

MR. MAGAZINER: In the coming days and months we're going to hear a lot about health care. But before we get into it, I want to make a couple of points very clear. First, the debate is, first and foremost, about the American people and their health security. People are going to disagree on a lot of details. But we are going to stand firm on what the American people need, and they need guaranteed health security, comprehensive benefits, affordable health insurance that increases their choices and improves the quality of care.

Second, the administration is proud of the unprecedented consultations that we initiated back in January and are continuing. The draft proposal that is circulating around town is just that, it is a draft. And we are ready and willing to work with everybody who is committed to comprehensive health care reform.

Now let's turn to the numbers. At the very beginning of this process the President asked for a commitment that we have fulfilled. It was a commitment to undertake an historical attempt to bring together the best minds in the country to help us design a financing package for health care reform, and we have fulfilled that commitment. The numbers and analysis that underline the President's proposed plan for health security represent months of rigorous analysis which brought together analysts from various federal agencies for the first time. We brought together actuaries from various branches of government. We had an outside group of private economists and actuaries who audited the work that was done by that team from within the government, and they've examined and validated the costs and savings projections.

The cost and savings projections in the draft document are solid and we stand firmly behind them. These projections are credible and conservative.

Everyone, both inside and outside the administration, knows two things for sure: we have to get health care costs under control before they bankrupt our families and our nation, and we are not getting good value for our health care dollar today. Too many working Americans are losing their coverage every day, and coverage is eroding for countless more. And all Americans pay too much for their health care, and will pay much more if we do nothing. No American, even with health insurance today, can be sure that they will have health insurance at this time next year.

There is some misinformation out there about what people will pay under the plan and what they will get. Let's be clear about this. Under the President's health care security proposal the vast majority of Americans will pay less for the same or better health benefits than they have today. And they will have two things they don't have today: Number one, a full package of preventive health care services, including things like immunizations, mammograms, and yearly physicals. And number two, the guarantee that your health insurance will never be taken away no matter what. If you lose your job, you're covered. If you move, you're covered. If your child gets sick, you're covered. And if you want to start a small business, you're covered.

The President believes, and he has said this since early in the campaign when he made his commitment to health reform, that it would be wrong to propose a broad new tax on the American people to pay for the waste and inefficiency that riddles our health care system. We must control the growth of health care costs, and that is exactly what our proposal will do.

Here's the bottom line: The government is going to set the standards, guarantee high-quality affordable care, and then get out of the way.

Today's system has too much insurance company red tape and government regulation. When somebody goes to the hospital, the bill is checked by checkers, and then by other checkers, and then by other checkers. It's wasteful and it doesn't do anything to improve the quality of care. Our plan will mean less regulation of doctors and hospitals, leaving them to concentrate on practicing good medicine instead of having to worry about filling out thousands of forms every day.

Is there some area of more government regulation in this plan? Sure. There is regulation of the insurance industry. The insurance industry has run roughshod over consumers for too long in this country. Our plan makes it illegal for insurance companies to refuse to cover people with preexisting conditions; illegal for insurance companies to raise your premium or drop you if someone in your family gets sick; and impossible for insurance companies to continue to charge small businesses 35 percent more than they charge large businesses.

Today there's no competition in the health care market. Insurance companies can charge you whatever they want for health care and you have to pay it. The President's health security proposal is built around putting consumers in the driver's seat and forcing health plans to compete for customers by bringing costs down and improving the quality of care.

Finally, in response to stories that appeared today, let me make a few points. First -- and let me be very clear about this -- the administration is not considering a tax on hospitals in order to pay for this reform. There have been no discussions of such a thing since May when we were considering every idea that was presented to us. And any suggestion to the contrary is absolutely untrue. We feel that hospitals must remain the cornerstone of our health care system and our plan fully recognizes their critical role.

Second, one report today contained some misinformation about what individuals will pay under health reform. Employers can continue to cover 100 percent of the employee's premium if they so choose, and employees will not be required to pay more than 20 percent.

Third, there is misinformation about changes in Medicare. Medicare will remain the federally-run program for seniors and disabled that it is today. Medicare cost growth will be slowed. However, even with slower growth, Medicare spending will increase at roughly twice the rate of inflation over the decade, and Medicare recipients will get new benefits -- prescription drug benefit and help on long-term care.

Thank you very much. And now we'd be happy to answer any questions that you might have.

Q For my readers who live outside of Washington and don't understand policy wonk talk, can you explain to us how you're going to pay for this?

MR. MAGAZINER: Yes. We're paying for it, first, by savings as we bring the growth in health care costs under control. Secondly, we're going to be imposing some type of sin taxes on tobacco and perhaps something else.

Q What is that --

MR. MAGAZINER: We're not sure yet. And we also are going to ask that employers and individuals all make a contribution towards their health insurance and the health insurance of their employees. That's the fundamental funding mechanisms.

Q On the sin tax, can you talk about what range you're considering on cigarette taxes?

MR. MAGAZINER: That is one decision that is still not made yet - - is the final composition of the sin taxes.

Q But you have a range there.

MR. MAGAZINER: We have a range, but I'd rather not get into it until we have a specific formulation, which we'll have this week --later this week.

Q Could you explain a bit about the Medicare situation? That seems to be one of the big concerns, that it's impossible to slow the rate of Medicare growth at the rate you're proposing without gutting the program certainly in terms of hospitals that are largely Medicare dependent. And some of the people who are really credible that have seen your numbers tell you that this is basically -- it's a joke. What's the answer?

MR. MAGAZINER: Well, I think, first of all, we've had hundreds of experts from around the country who have been working on this plan and who have developed the Medicare piece of it in consultation with Medicare experts at HHS and in the Congress. I think the rate of growth that we are looking for in Medicare will still be twice the rate of inflation; that it will be accompanied by a slowing in the rate of growth in the private sector as well, so that there won't be the kind of costshifting problem that we often run into.

In addition to that, the slowing of the rate of growth actually benefits beneficiaries considerably because it slows the rate of growth of the premiums they have to pay. Further, for the hospitals that have a large share of Medicare and Medicaid people, there are a number of features in our program which divert new funds directly to those hospitals to support them.

There is what we call an essential provider provision that means that they will receive extra funds from the federal government. Also, those are the very hospitals often that are going to receive the best benefit from universal coverage because they tend to be hospitals that treat a high proportion of uninsured people -- hospitals in rural areas or in poor urban areas. So we have taken special recognition of those hospitals that would be affected in this program and there will be additional funds for those hospitals.

To say one other thing about the Medicare savings --there are other proposals that have been made on health care reform in the Congress which actually would call for bringing the rates of Medicare and Medicaid growth to an even sharper reduction that what we're proposing. If you look at the McDermott-Wellstone bill, the single-payer bill, they actually bring the whole health care system to a growth rate of about GDP in '95 or '96. The Stark bill that's been proposed does it in '98. Our bill does it about '99. And even then, Medicare is still growing faster than GDP, although the private sector is a little bit slower. So we think that we've been conservative in estimating the slowdown in rate of growth.

DR. THORPE: I guess the only other thing I would say is to put the Medicare savings in some perspective. You've all seen the five-year summary numbers, which have been reported in various places at $124 billion. And I think the thing to keep in context is that over the fiveyear period, that's off a base of over $1.4 trillion in Medicare spending. So if you put it in a context of what these numbers are in terms of the Medicare program, summing them up over the five years, you'll see that this is something only on the order of about eight or nine percent.

Q in the real world, what is this going to mean to doctors and hospitals? Where are we going to -- what is the hospital of the year 2000 going to look like, or doctor's fees in relation to today? Where is this all going to come out of?

MR. MAGAZINER: Almost everybody that we have talked to this year who has had experience with the health care system, whether it's doctors, nurses, clerks, patients, all know that there's tremendous waste in this health care system. The paperwork is enormous; the unnecessary tests that take place; the fact that you can look at two different hospitals in the same state of Pennsylvania and one charges $80,000 for the same operation that another charges $20,000 for and there's no difference in outcome, as has been demonstrated in study after study.

Almost every study that's been done indicates tremendous waste in this system. And what we need to do is try to get that waste out, because it would be unfair to ask the American taxpayer to raise some type of broad-based tax to continue funding that type of inefficiency.

Q What happens to doctors' salaries, for example, or incomes and hospitals' margins which they say are already -- a lot of them taking --

MR. MAGAZINER: Well, hospital margins vary. Some of the hospitals that serve underserved areas and rural areas or urban areas do have profitability problems, and that's why we're taking special note in directing new funds their way. But there are also many hospitals in the country that are doing quite well and we think that as long as hospitals can become more efficient, they'll continue to do very well.

Q Doctors?

MR. MAGAZINER: Doctors the same way. Doctors' incomes have been going up much faster than everybody else's in the country for quite a few years. If they can become more efficient in the new system they'll continue to go up faster. But if they can't, then they might see a slowing in the rate of growth of their income.

MS. MIN: The level of spending on Medicare for physicians will still -- the level of spending on Medicare for physicians will still be growing at twice the rate of inflation. And the level of Medicare we'll be spending on providers will still be growing. We're just talking about reducing the rate of growth.

Q Will doctors want to see Medicare patients under the schedule that you're proposing?

DR. FEDER: What relates to that issue is some of the people -- when you look at Medicare in isolation and people have talked about constraining Medicare costs without constraining the rest of the system, Medicare faces a real problem. It's always playing catch-up and its patients are fighting for access with out patients. Now we're talking about doing this as part and parcel of a reform which creates greater equity as well as overall constraint.

Q Ira, one of the things that seems to have surprised some people is the number of new commissions and boards and the likely size of the staff underneath the national health board. Gradison, the former congressman who now represents the health insurance industry, said on TV today, he predicted that that staff for the national health board would create as many jobs as Vice President Gore's reinventing government effort would cut. (Laughter.) What do you think there's a need for a staff?

MR. MAGAZINER: Well, that's a good line, but it's inaccurate. We think that the national board is primarily going to be playing an oversight role. It's not playing a regulatory role. We don't anticipate that it will have much of any staff. The actual work that will be done on, for example, new research on quality and that type of thing, would be done in existing departments of the government, not in the national board.

Also, we are looking for a system that would be flexible at the state level and primarily a state system, not a federal system.

Q This is the board is going to negotiate with all the alliances and enforce the budget and is going to have very little staff?

MR. MAGAZINER: No, it doesn't -- I mean, initially, it will approve as a board of directors might the state plans. But it's not going to have a large staff that does that work. That work will be done elsewhere. It's basically like a board of directors type operation, not an operation with a lot of staff. It won't be involved in any kind of detailed negotiations. What it will do is to do things like make recommendations on updating the national benefits package and that kind of thing.

Q What's your target date for universal coverage?

MR. MAGAZINER: It depends on the state. What we're looking for and expecting is that some states will be ready to come in to the new system in 1995; probably the bulk in 1996, and maybe some others in 1997. But we're saying that 1997 should be the outside date for all states.

Q The end of '97?

MR. MAGAZINER: That people should be enrolled by the end of '97, yes.

Q parity between states?

MR. MAGAZINER: Well, there's not parity today in terms of prices, if that's what you mean. Today the -- in fact, even within states, you can go to Miami, Florida, or Tallahassee, Florida, and see dramatic differences in the price of insurance premiums or the cost in hospitals. And across states, there's dramatic differences.

What we're going to try to do is over time -- we think as more information is made available, those costs will begin to come together. But initially we're going to start out where states are.

DR. FEDER: But the key is that with the exception of these couple of years, everybody is in. In that sense, there's parity; everybody has got universal coverage.

Q Ira, have you done any analysis on the overall impact on the economy -- I think medical care is about one-tenth of the overall economy. And how do you answer those critics who say this is going to be a major job loser when you force employers to pay for medical care?

MR. MAGAZINER: First of all, we have done economic analysis and we're completing some additional studies now that we're finalizing the plan. And health care costs now take over 14 percent of the GDP. And if we do nothing, they're reckoned to go up to almost 19 percent of GDP, even without insuring one more person. So they eat up over two-thirds of the increase in GDP per person, and over 120 percent of the increase in workers' wages if we do nothing.

There has been a hidden tax on American companies in this country for decades, and that hidden tax is the rapid rise in health care costs, going up twice or three times as fast as wages and eating up money for investment, eating up money for wages. What we are going to do is to bring the growth of those costs under control so that workers can have wage increases again and so that companies can have capital to invest.

On the jobs issue, let me be clear about this: If all we were to do was to impose a mandate for employers to pay health insurance tomorrow, it would cost jobs. But we would not propose that and that is not what we are going to do. What we are doing is changing a whole system so that, yes, employers that now don't contribute to health insurance will be asked to do so, although small firms will have a significant discount and it will be phased in. However, we're also slowing the rate of growth and lowering costs for many other firms, including the majority of small firms who do provide health insurance. And when you reduce the cost that a company has to spend on health insurance, that frees up money to create new jobs. And since most small companies now provide health insurance, and in the preliminary analysis we've done the fastest growing small companies now provide health insurance, we think that there's going to be a net benefit.

Q The administration has said it's willing to revise this plan based on consultations with Congress. What are you willing to yield on? What are you not willing to yield on? Will you change the MedicareMedicaid savings projections? Will you change the composition of the sin tax based on what you hear on the Hill?

MR. MAGAZINER: Well, there are many principles -- and I think the President will enunciate this in his speech more eloquently than I can do for you today -- but there are many principles upon which we won't compromise. We want health security for all Americans. We want affordable health care. We want to simplify the system and various other things.

However, we don't believe that we have all the answers. We're not coming down from the mountain with the tablets and expecting that we have all the answers. And so as people have better ideas on some of these things we're willing to be flexible on how to achieve the principles and the goals.

Q Including financing?

MR. MAGAZINER: Aspects of financing, potentially, yes.

Q When you said you were opposed to a broad-based tax, that that would be unfair to the American people now, would that be something you could compromise on with Congress?

MR. MAGAZINER: I wouldn't expect so.

Q How would you enforce the budget? What if California says to you we just can't live within your budget, what would you do?

MR. LEVITT: Hi, I'm Larry Levitt. We're not talking about saying to California that here's your budget and it's your problem to figure out how to do it. What we're saying to essentially the health insurance market in each alliance area is here's what your premiums are expected to go up by. And we expect in most cases that the market will, in fact, produce rates of increase in line with inflation and in line with the growth in the economy. If they don't, there is an assessment mechanism; essentially, a mandatory rebate mechanism so that health plans in an area, if premiums in that area went up too fast, health plans whose premiums were going up to fast would be required to rebate the difference to employers and to consumers. And in addition providers would, in effect, would be required to rebate their increases also.

Q Ira, how do you expect to recapture the savings without a tax, particularly on hospitals?

MR. MAGAZINER: Recapture --

Q Savings in the system.

MR. MAGAZINER: Well, we expect the savings in the system to go back primarily to those people who are doing the paying. The employers and the individuals who are paying for their own care.

Q Well, what happens if hospitals no longer have a problem of uncompensated care and suddenly have a windfall?

DR. FEDER: I was just saying, when we talk about the financing and the savings being a critical piece of financing the federal share or the subsidies, those savings are monies that the federal Treasury or state treasuries won't have to pay out anymore because we've constrained rate of growth. So those are monies that we have in hand.

The other savings that Ira is talking about in the system are going to go back to employers and to consumers in general because their premiums will be lower because those are out of the system.

Q So you're not thinking about any other taxes besides sin taxes -- is that the only tax?

MR. MAGAZINER: The only thing, to be clear, there is a set-aside that we're looking at which would go to all premiums, both within the regional alliances and also the corporate alliances, to help pay for things like academic health centers and things --research that's done in academic health centers and teaching hospitals, because that's infrastructure that everybody in the health system benefits from.

I'd like to say one thing about the budget, and this I want to emphasize from what Larry said. We don't believe that the budget is the main mechanism, that the insurance regulation is the main mechanism in controlling costs. We think the setting up of the competitive marketplace is what's going to control the growth of costs.

The insurance caps are really a backup mechanism so that if in certain parts of the country the competition is not working well enough at any given point in time, then the caps are there as a discipline. But that's not the main mechanism.

Q What happens to unions who have negotiated contracts to health benefits that would exceed the benefit package?

MR. MAGAZINER: They can continue to have them. We're not going to make people worse off for what they've negotiated. They continue to have them.

Q Ira, just so we have a sense of order of magnitude, besides the national subsidy pool, you've talked just now about what sounds like two other pools for essential providers and the one you just -- the set-aside you just talked about. When this thing is up and running, what are those two pools going to have in them and where is that money going to come from?

MR. MAGAZINER: That's defined in the draft, which I assume you have. (Laughter.) But basically, we are looking for a pool that would increase what's currently in the graduate medical education accounts and so on. That would come off of an assessment of the premiums. It's actually built into the premium number. And it's not anything new; it's built into today's premiums as well.

The issue is that when you set up a pure competition, that teaching hospitals and academic health centers often have a higher cost because they have those research and teaching functions in them. Today that's sort of averaged out in the system. When you move to a competitive system those institutions might be at a disadvantage unless you had a set-aside like this.

There was one other source -- the essential provider is going to be a direct federal contribution that will come out of some of the savings we gain, and also initially out of some of the sin taxes.

Q What's the order of magnitude of that?

MR. MAGAZINER: A couple of billion dollars.

Q Can I ask you about the caps again? You've got a limit on money coming into the system, but you really are not controlling the other aspects -- for example, high tech, older people getting sick. The costs will continue to go up, won't they, even though you're limiting the dollars going in? So sooner or later, aren't' the higher costs and limited dollars going to blow up on you?

MR. MAGAZINER: Well, I think the most important thing to remember in this is that we're spending over 14 percent of our economy on health care. Other nations spend 7 percent, 8 percent, the Germans, the Japanese. They use high technology as well. They have actually more old people who live longer than our people do. They insure everybody. They have a more comprehensive set of benefits that we have. And yet, they spend less.

Almost every study that's been done has documented the tremendous amount of fat and waste in this system. There is no reason to believe that slowing the rate of growth in cost cannot be taken out of that waste and has to lead somehow to poorer care. There's going to be a lot of scare tactics used by people who are essentially trying to almost blackmail us into saying if we don't keep paying for all this waste and for all the fat, that everything is going to be terrible and there are going to be long lines and your mother won't be treated, and so forth and so on. That's nonsense. There is a tremendous amount of waste in the system and we have to have high quality standards to protect the consumer, but then also go after that waste with controlling costs.

MR. KRONICK: I'd just like to amplify on that. Only in health care do we expect that new technology is going to add to the cost of producing output. In most of the rest of the economy we assume that new technology will save money, and there are many possibilities for that in health care as well.

More importantly, I think that Ira mentioned earlier the comparison of Boston of New Haven; that if you look at what happens to Medicare beneficiaries in Boston, the expenditures are almost twice as high per person as in New Haven. And nobody says that we're rationing care to people in New Haven or that beneficiaries in New Haven aren't receiving all the care that the need.

So we take this kind of what we're spending now for granted and that we have to be spending that, and if we spend -- if the rate of increase isn't as large as what we're projecting, that something terrible is going to happen to us. And there is every reason to believe that if we give physicians and hospitals the incentives and the opportunities to use the resources that are available more effectively, that they can figure out how to do that. We have examples of that all over the country. And this plan is intended to change the environment in which hospitals and physicians function so that they have the opportunities and the incentives to use those resources better. There's no reason to believe it won't happen.

MR. ZELMAN: I just wanted to add to something Rick was suggesting. This health care proposal is not a one-time fix in which we expect to put a few things in place which will immediately wring out the inefficiencies and waste that virtually everybody agrees are in the system. It is a structured mechanism of setting health plans competing against each other so that they will, over time, for the next five, 10, 15 years, constantly be encouraged to compete with each other to produce savings and to produce lower costs to consumers. So it's a long-term kind of fix that we think will enable the system to continue saving money over time, as opposed to a lot of other proposals that suggest that the only way you're going to save money is by just paying your doctors and hospitals in a regulatory way less and less and less. So we think we've built in some long-term efficiencies here.

MR. MAGAZINER: At the risk of overdoing some personal stories here, the first time I went into the hospital for a hernia operation I had to stay in for three days. And then the last time I went in it was an out-patient procedure because of new technology. I had my knee operated on about 20 years ago; it was a two-week deal. That same thing with orthoscopic surgery could be done now in a couple of days stay in the hospital. So technology cuts both ways.

DR. FEDER: Didn't know you were such a mess. (Laughter.)

Q I have two questions. As a result of the consultations you had this week on the Hill, are you looking, for whatever reason -- because of politics or whatever -- are you looking for new sources of revenue now? And secondly, the tax that was described in The Times today, maybe you wouldn't call it a tax, but you have talked in the past about recouping the savings from hospitals through an assessment, which we all translate into taxes.

MR. MAGAZINER: Let me be clear about this. We talked, as you know, about a million ideas in the past and in late April, early May discarded that particular idea. And we have not talked about it since. So what I think might have been inaccurate in some of the reporting today is that we have not been having discussions about new health reform sources of revenue and we have not had any discussions at all about resurrecting any kind of hospital tax. That went off the table in early May.

Q So the answer to the first question is as a result of these consultations, are you looking for other --

MR. MAGAZINER: No. The consultations basically could affect --I mean, what you have now in those numbers tables are a draft. Through our own internal processes we intend to revise that draft a couple of different times with the consultations.

You'll see some numbers move around in there -- the deficit number may go up a little bit and down a little bit, the sin tax number up or down a little bit, the Medicare number up or down a little bit -- but we're not looking for new sources of revenue.

Q Surely, when you went up on the Hill, one of the things I would imagine you got the most concern about was the slowing of the rate of growth in Medicare and Medicaid, which is something they've never been able to do up until now.

MR. MAGAZINER: I think, first of all, discussions about the slowing of the rate of growth of Medicare and Medicaid have never been talked about in the context of comprehensive health care reform. They've been talked about solely going for the deficit reduction.

For example, on Medicare, a very important point is that the savings we're looking for in Medicare is smaller than the investment we're looking to make in the Medicare drug benefit and in long-term care. So the discussions in the past have not been slow the rate of growth of Medicare so you can give a drug benefit and long-term care. It's a very different discussion.

To your other question, I will honestly admit that we have heard from numerous people on the Hill about every one of our revenue sources. There are people up there who are not wild about the tobacco tax. There are people who don't like the Medicare and Medicaid cuts -- savings that we're looking for. There are people who don't like the deficit numbers. There are people who don't like different pieces of things, and that's natural. People have different views.

Q Are you saying that in early May you ruled out a broadbased tax -- in late April, early May -- and you simply haven't gone back to any kind of consideration of a broad-based tax since then?

MR. MAGAZINER: That's accurate -- hospital tax, yes.

Q To any broad-based tax?

MR. MAGAZINER: Well, it was around that time that we ruled out a broad-based tax as well, yes. We had done -- we started January 25th with our financial analysis. And by early May we had already run about 75 different runs of every different alternative we could think of. And we took a lot of things off the table during numerous discussions we had with the President in May. And the idea of using a broad-based tax, whether it's an income tax or a VAT or a hospital tax or whatever, was all taken off the table in May and has not been discussed. It was at that point that we decided to go to the employer-individual responsibility route.

Q There was some talk of placing an assessment on a corporate alliance, a one percent surcharge, or something like that. Are you going to do that?

MR. MAGAZINER: That's in relation to what I was talking about earlier about the set-asides for the academic health alliances and that type of thing. Whether it would be one percent or less is being looked at. But it was always designed -- see, in some of the ways we originally modeled the numbers, the regional alliances were essentially paying for the whole set-asides for the academic health centers, paying for things that were done for the underserved populations and so on. And then we went back and said, well, wait a second, because the corporate alliances are going to be on the same footing as the regional alliances, shouldn't they also have to make a contribution in their premiums as are going to be in the regional premiums? That's the context in which we've looked at that.

We're still looking at that in relation to a trade-off with the sin taxes within that amount of money, but no decision is made.

Q So you could not do anything or you could have some, or you haven't made the decision yet --

MR. MAGAZINER: That's right. That piece that's labeled in your non-handout -- (laughter) -- that sin tax-corporate assessment, we're playing with that total pool of money and deciding the mix of that money. And that's still not decided.

Q And is alcohol still included in the sin tax or have you ruled out alcohol?

MR. MAGAZINER: I'll let you figure out what you think sins are and then make the list.

Q What other kinds of tax revenue are available then if you're only going for a sin tax?

MR. MAGAZINER: Just what we've put in here. I mean, I don't --

Q There is no other kind of tax, as liquor tax?

MR. MAGAZINER: Well, as I say, I think you need to come up with your own definitions of sin. I'm not sure --

Q I wasn't talking sin. You brought it up.

MR. MAGAZINER: We're looking at a number of things that could be broadly considered sin taxes, excise taxes on various things that have traditionally been called that.

THE PRESS: Thank you.

END4:10 P.M. EDT