THE WHITE HOUSE

Office of the Press Secretary

STATEMENT BY IRA C. MAGAZINER

In early spring of 1993, the White House assembled a group of actuaries -- from nationally-recognized accounting and actuarial firms -- to be involved from the beginning in examining the cost estimates for the President's health care reform proposal.

We considered it essential that experts who were independent of the policy process review the methodology used to develop the premium and subsidy numbers, which represent the fundamental building blocks of the reform proposal. This outside Cost Audit group was not required to support the policy itself -- just to verify the validity of the cost estimates. The actuaries were asked to question the assumptions, substantiate the numbers, examine the models, and communicate independently with each agency involved -- to verify that both the process and the estimates were valid and accurate.

As the attached letter indicates, these actuaries maintain that "...the process was very thorough" and the methodology and assumptions "...sound and reasonable." They further confirm that "...these cost estimates are the best available at this time and are suitable for planning purposes."

The expertise of the Cost Audit group was appropriate for the premium and subsidy estimates. They were not asked to validate the estimates of savings projections from administrative simplification, competition and prevention or the estimates of the federal (Medicare and Medicaid) savings. Another group of outside experts was consulted regarding the savings projections from competition and Medicare and Medicaid experts -- from the Department of Health and Human Services and the Office of Management and Budget -- participated in the development of federal spending projections.

We insisted on this unprecedented degree of outside review and validation in developing the health reform proposal for one reason. We wanted to get the best data available validated by the best people possible so that the national debate would be able to focus on the policy itself and its implications for the American people.

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