View Header


Office of the Press Secretary

For Immediate Release August 8, 1994


The Briefing Room

11:04 A.M. EDT

SECRETARY SHALALA: I'm Donna Shalala, Secretary of HHS, and I'm here this morning to continue the effort of myself and my colleagues in the Cabinet to do a full court press for health care reform. This is a very historic week for every American. Beginning tomorrow, both Houses of Congress will begin a debate on comprehensive health care reform.

In the 19 months since this debate started, we've made dramatic progress in our effort to guarantee a lifetime of health security for every American. We have one more roadblock in our way. Opponents of real reform are arguing for another delay as they throw together incremental, halfway proposals that aren't even drafted yet. Opponents of real reform would also have us believe that our goals can be met with incremental piecemeal changes; they cannot. They think that tinkering around the edges is enough for now, it is not -- that approach will not work. It will cost more and it will leave millions of hard-working Americans at risk.

The President and the members of his Cabinet are enthusiastic and are very determined that this process will end in a victory for the American people. It will end in legislation that, for the first time in this country, provides every American with the rock-solid guarantee of health insurance that can never be taken away -- private health insurance that can never be taken away.

But this is not a victory that can be taken for granted. From now until the legislation is passed, each of us will spend the majority of our time fighting for health care reform. This is not a fight for a political victory, and it certainly is not a fight for a partisan victory; it's a fight for the health of every American.

The data we're releasing today shows just how urgent this issue is. For those of you from the "Jenny Craig School of Government," including my good friend, now, Senator Gramm, I should tell you that the report weighs 45 pounds. I actually am 10 pounds lighter since we started the debate.

The report actually is that heavy because it contains information about every community in this nation. It shows how many people in each community are living without health insurance today. It breaks down the data into those who are working, or the dependents of a worker. And it shows how many children are uninsured.

What these reports illustrate, state by state, is the economic and human cost of the current health care system. It shows the danger we face if we follow the advice of some in Congress to do nothing, or to enact some form of halfway solutions. Let me just give you one example.

In the State of New Jersey, nearly one million people are without health insurance, and in that state, 45,000 people are losing coverage every month. A million people without health insurance, and 45,000 that lose their health insurance every month. Clearly, the working people of New Jersey and their families can't afford to wait another year. Eighty-three percent of the people in New Jersey who have no health insurance are working, and that includes them and their families.

That's a 56 percent increase since 1988. So we're not only talking about a million people without health insurance --45,000 people in New Jersey who are losing it every month -- but of those who don't have health insurance in New Jersey, over 80 percent of them are working people and their families.

That's a 56 percent increase since 1988. That means that these are people who get up every day, they go to work, they dream the American Dream, and yet, they live with the nightmare of having no insurance for themselves and for their families. Until we enact real health care reform, the people of New Jersey, those with insurance and those actually without it, won't have the peace of mind they need to concentrate on raising their families and making that economy as dynamic as it needs to be.

The state's government will continue to spend 20 percent of its entire budget on Medicaid. That leaves very little money for the higher education system, for law enforcement, and for infrastructure repairs in a place like New Jersey, and this story is repeated in every state in this union.

And today some of my colleagues who once ran those states -- Bruce Babbitt, former Governor of Arizona, now Secretary of the Interior; Dick Riley, the former Governor of South Carolina, now Secretary of Education; Henry Cisneros, the former Mayor of San Antonio, now Secretary of HUD -- will talk to you about what it means for them as former state and local officials.

And so the important point here is that New Jersey is not unique. In every state, in every congressional district, the problem is the same -- millions of Americans, hard-working working Americans. And what's fascinating about this data is, as you cut across,s in every state 80 percent of those who are uninsured are working and their families.

As the Congress begins the historic debate, I hope that they and the American people remain focused on what this is all about. It's not about whose bill weighs the most, it's not about whether the Secretary of HHS is losing weight, it's not about whose commercial to believe, it's not about whose district needs help the most or whose special interest needs help the most, because the truth is we need to do a lot of things in this health care system. This debate is about what kind of lives American people will lead, what kind of future that we'll leave for our children.

This debate is really about fairness and about equity. It's about controlling and defining our future. This health care debate is about what kind of Americans we are and what kind we want to be. Thank you very much.


SECRETARY BABBITT: Thank you, Donna. I began my pilgrimage toward the realization of health care issues back in 1982 when I was Governor of Arizona and we embarked upon a series of piecemeal reforms that are actually quite similar and were quite similar to the kinds of approaches that are being proposed today by Senator Dole. We first started with our Medicaid program. We actually didn't have a Medicaid program, and we enacted the most radically different comprehensive Medicaid program then in existence. And it's still in many ways a model for how it is you deal with Medicaid. It was the first entirely capitated, prepaid competitively bid Medicaid program in the United States.

With that success, we then began looking at other parts of the system: insurance reform, the working poor, entitlement caps, and constructed what seemed at the time to be a fairly reasonable approach. And I must emphasize that this was 14 years ago, and it sounds and echoes across that time very much in the nature of Senator Dole's proposals.

What we found when we had finished all this work was that it had an ironic result, because the piecemeal reform of the system simply began a massive process of cost-shifting onto the center of the system which was the regular market for middle class working families.

And as a result of that, we look at Arizona today, look across what's happened, the cumulative impact of all these reforms and we have a remarkable and, I think, a sad picture that illustrates the effects of piecemeal reform. Under the current system, 44,000 Arizonans lose their health care insurance each month. Now, that's not anybody under Medicaid, that's not anybody under Medicare, it's not anybody under all of the special programs that we have in Arizona for targeted groups.

Those 44,000 people who are losing, or nine-tenths of them, are members of working families who are bringing home paychecks, who are above the Medicaid poverty threshold. And that means that this year in Arizona there are half a million, 541,000 without health insurance, and 488,000 of those are in working families. Now, that includes 108,000 kids without health care coverage, and that's the consequence of what I thought at the time to be some pretty innovative stuff. But in retrospect, for all the sectoral benefits, inevitably those kinds of reforms begin squeezing the costs out of the other parts of the system and shifting them onto middle class working people.

There are some other interesting effects of this kind of approach to reform. We're spending in Arizona 12 and a half percent of our state budget on Medicaid. Now, if Senator Dole's proposal goes into effect, the news for Arizona is that we're going to be spending another $1.3 billion in additional costs in the state budget as a result of the Medicaid cap proposal. And, don't you see, that's exactly predictable as if it were one of Newton's Laws of Physics. We've already learned that lesson in Arizona. You cap one piece of the system with the rest of the system, not taking into account --and the costs that you drain out of that piece are simply shifted somewhere else.

So my message to 50 governors and 50 state legislatures is, you had better look real careful at the Dole proposals, because it's simply another chapter in a sad, unhappy game of cost-shifting. It is, in fact, an unfunded mandate for all of those who are in this town talking about it, they had better recognize that this is the biggest unfunded mandate in modern history.

The Arizona experience is not unique. Somebody here has a chart showing you the effect of all these kinds of piecemeal proposals, thoughtful and rational as parts of the system. But inevitably, they result -- without a comprehensive system, they result in two things. One is a lot of cost-shifting. And, interesting enough in most cases, about half the states that have experimented with this stuff, you actually get a slight decrease in the number of people covered. Once again, that's predictable. Because as the pressure moves out of the regulated system into the middle class working people, the insurance companies are going to do two things: They're going to shift costs, and they're going to start dumping the risks. And you can see it as you go through all the states -- guarantee issue, guarantee renewal, portability, community rating, voluntary alliances, tax incentives -- they all have a familiar ring.

The Dole people are acting as if they have discovered something new. They're sitting here, isolated in the cocoon of Washington, oblivious to the reality out there on the landscape of the last 10 years in which these things that they now propose have all been tried, with woeful results. In half of these states, there are fewer people as a percentage of the total enrolled than there were before the experiments began.

There's on exception. There's one exception, and that's the State of Hawaii, in which some enlightened governors and successive state legislatures simply said we're going to go straight to the heart of the matter in the form of an employer mandate, matched up with an expansion of Medicaid-style assistance in which they have now pushed the coverage up in Hawaii significantly past 90 percent; I think about 93 or 94 percent.

And, interestingly enough, as a result of that, health care costs in Hawaii have actually decreased. They're 20, 30 percent lower than they are in other states in a state where, as every surfer and bird-lover and tourist knows, prices are not exactly cheap. That's the one state which has learned the lesson that's now under debate here and acted upon. And that, of course, is a way of saying in conclusion simply this: If these people, advertising all these piecemeal reforms would get out of this town and look at what's happened in the laboratories of democracy out there in the states, I think it'll be crystal clear that there's only one way to go: Learning from the experience in the 50 states. And that's the route toward universal coverage.


SECRETARY RILEY: I'm Dick Riley, the Secretary of Education. And to prove my point today, I decided to have an allergy attack. That's health care-related. As former governor, much of what Bruce Babbitt said, I would certainly second. But I know firsthand, and I think any governor does, how much states really need universal health care coverage. I certainly know that's true of South Carolina.

South Carolina has tried for reforms in an incremental way. And, really, it just simply is not working well for all the state. America's children need universal coverage. With universal coverage, every child will be able to get health care that they need, including the important preventive services that enable them to go to school ready to learn and enable them to stay healthy.

Without universal coverage, millions of children are going to remain without coverage. In the state where I was governor, South Carolina, is one of the states that really has tried, as I said, for nonuniversal, incremental reform. We learned, though, that this nonuniversal reform simply isn't enough; since '88, the number of working people without insurance has actually risen in South Carolina -- risen from under 200,000 in '88 to over 497,000 today.

We also learned that states can't go down the road to reform on their own and do it by themselves. The country's health care system is broken, and only universal coverage will fix it. Under the current system 33,000 people lose their insurance each month in my state. Under the current system, of the 615,000 people without health coverage in South Carolina, 497,000 are working families -- 497,000 out of 615,00, more than 80 percent.

Four hundred ninety seven thousand working families in one small state have no health insurance, and that's a 105 percent increase, a 105 percent increase since 1988 when many of these incremental efforts were put in place. Twenty thousand people in South Carolina, under a nonuniversal system will continue to lose insurance every single month; $967 million in additional costs, as Bruce Babbitt said, would be shifted in my state also under the Dolestyle Medicaid cap by the year 2003.

Universal coverage is absolutely essential for the health of America's children. Here are just some examples of what universal coverage will mean for America's children today. South Carolina, again 97,000 children will no longer go without health care coverage; 181,000 children in Oklahoma will no longer go without health coverage; 106,00 children in Wisconsin will no longer go without health coverage; and 208,000 children in Louisiana will no longer go without health coverage. Universal health care is prochildren, it's pro-education, and it's pro-working family.

Thank you.


SECRETARY CISNEROS: Thank you, Mr. Secretary. My name is Henry Cisneros and I'm Secretary of Housing and Urban Development. Health care reform is a community strategy as well as a strategy for individuals and for families. It is an issue that will make for better cities, better communities, better neighborhoods. America's cities and communities need real health care reform with universal coverage for millions of Americans.

In my work as Secretary of Housing and Urban Development, I've traveled the nation working with people that HUD serves -- middle-class Americans in assisted housing; working people, and people who live in public or other forms of subsidized housing, all different income levels. Very frequently, these are people who lack health care coverage. Now, for all of these people, whether they be middle class or whether they be poor, the lack of health care coverage is a serious personal problem as well as one that has community effects. Let me give you some examples.

When middle class families undergo the stresses such as I have talked to with individuals about where they lose health care coverage or suddenly have a spouse or a child who needs massive health care services without insurance, it's not unusual for people to lose their homes and to suffer other effects within the communities. It becomes a community problem.

Let me give you other examples of how the lack of coverage for individuals transforms itself into a community problem. All over the country we have central cities whose historic hospitals, institutions that have existed for 100 years, frequently a churchbased hospital or a private hospital, are now facing the prospect of closing their doors and leaving the community without health care at all. They've been there for 100 years in the center of some cities. You name the city, I'll give you some examples.

Why? Because of the load of uncompensated care. People who come to their doors who have no health care and who must put themselves at the mercy of the emergency rooms and trauma care units. If you and I were to go to an emergency room of a central city hospital on a winter night, we'll see there among the gunshot victims and the car accident victims are children with 103 and 104 degree fever who could have been treated by a family physician had they had coverage, but end up in the emergency room with the flu effects of a winter epidemic because there is no other coverage for them.

Another example of how individual health problems become community problems when there is no coverage is the situations that occur when, for example, a pregnant woman has no ability to get care, has no coverage for prenatal care. The resulting low birthweight births, the resulting neurodevelopmental problems, the resulting infant mortality, which in many central cities are double and triple the average for the rest of the population and approaching Third World levels, are massive community problems. We all end up carrying the burden of neurodevelopmental problems which could have been offset, prevented, if there were coverage for all Americans.

Another example of how the lack of coverage affects people's choices that affect all of us in turn in a community is the welfare lock, the Medicaid lock. Now, we view the lack of universal health coverage as the single, greatest impediment to helping people who want to escape from welfare and go to work.

Universal coverage will free millions of Americans in our central city, public and assisted housing residents, from the socalled "Medicaid lock," allowing them to seek employment without fear of losing their medical benefits for themselves and for their children.

Imagine the situation, the choice, the dilemma faced by a mother who wants to work, wants to set that example, wants to make some extra money, but who finds that because Medicaid provides coverage, leaving Medicaid for an employer who does not provide coverage puts her children in jeopardy of having no health services because she makes the decision that we all encourage her to make, which is to leave welfare and to work.

The state implications of swollen Medicare roles are substantial. The current system cripples state budgets with millions of dollars being spent on Medicaid for people who we want to leave the Medicaid and welfare program, which could be spent on important programs, such as housing or crime or community development or policing or other matters, but has to be spent on Medicaid because of the way the system works today.

In Kentucky, it's 17.5 percent of the state budget. In Louisiana, it's 23.2 percent. In Michigan, 19.4 percent -- almost a fifth in these states of the state budget is spent on Medicaid alone. And in my home state of Texas, it's over a fifth -- 21.2 percent.

Let me transition to my second point, and that is a point about Texas. Nonuniversal care just won't do the job in Texas. In Texas, for instance, there are 175,000 people currently losing their health insurance every single month -- 175,000 people. Under nonuniversal reform, 105,000 people will continue to lose their coverage every month.

Of the 3.8 million people without health care coverage in Texas -- now, just focus on that number for a minute -- in Texas, 3.8 million people without any health care coverage, 3.8 million is a population larger than the three largest cities of Texas, larger than the combined populations of Houston and Dallas and San Antonio without coverage.

Of those -- and some people would like to suggest that that 3.8 million is mostly poor people and, therefore, they have no identification or sympathy for them, but 3.2 million of the 3.8 million, 84 percent are working families. And that number continues to grow. It's grown 27 percent -- working families, uncovered, just since 1988.

Let me just close by saying that a Dole-style incremental reform will devastate the Texas state budget. On top of what it will deny families and individuals as they continue to be put in a situation of losing insurance, and these numbers continue at these high levels, it will mean for the State of Texas budget $4.1 billion in additional costs, shifted to the Texas State budget under a Dole-style Medicaid cap.

I think we're now prepared to answer your questions, and Secretary Shalala will begin.

Q Is this concentrated attack against the Dole plan your only major thrust today? I mean, is this -- are you worried about it? Do you think it has a chance?

SECRETARY SHALALA: No, I think we want to make two points today, and that is across this country the people that will be left out if we do a piecemeal approach are working Americans and their kids. The only plan that the Republicans are talking about now is actually the Dole plan, and we want to make the point that it's a piecemeal plan.

They still have not given us anything comprehensive for the discussion. And while we're prepared to mix it up with them, it's hard to compare the comprehensive approaches that the Democratic congressional leaders have proposed with a very piecemeal approach that seems not to have learned from almost 20 years of trying to push on this side and having costs pop up on this side which is what my colleagues are making.

Do you all want to come up, please -- I need my back protected. (Laughter.)

Q May I ask a question of all the Cabinet secretaries?


Q Would any of you fly on a corporate jet or take gifts from someone whom you regulate?

SECRETARY SHALALA: If the answer is have I, the answer is no.

Q Would you?


Q Would any of you other secretaries do anything of that nature?

SECRETARY CISNEROS: I certainly wouldn't do it as a matter of course, but I don't want to comment on the facts of any other circumstance of any other secretary. I know no other facts, and I presume that's the underlying premise of the question. I just don't know the facts of any other circumstance.

Q Do you think that the continuing problems the administration has had now with the appointment of a new special counsel, the possibility of Whitewater being reopened and revisited, the Treasury White House contacts even being revisited, doesn't this slow down the momentum for legislative efforts --

SECRETARY SHALALA: Not a chance. Not a chance. This health care issue is so big and so important to individual Americans. This historic debate that's about to start this week, finally, is so overwhelming in terms of its impact on our economy, on the ability of our state governments to make investments on job development for every American, but, more importantly, on the health of their families which is fundamental, that it absolutely overwhelms any other issue.

Q Secretary Shalala, you gave us the weight of this effort. It seems to be figures that we got from Secretary Bentsen a few weeks ago and some other older studies. How much money was spent compiling this and how are you disseminating it?

SECRETARY SHALALA: I think that what we've done now is we've been putting out individual pieces of data including what Secretary Bentsen released last week. We have added to this data on preexisting conditions and on some other characteristics from existing sources. And what we've now done so that all of you, but more importantly people from state to state can look at their own data, is compiled and synthesized all of the data that we have on the health condition state by state -- who has insurance, who's excluded from insurance, who has limits on their insurance, how many people there are with preexisting conditions who are being excluded. And we've done that state by state.

So, what we've done is gone through the exercise and pulled all the data together. So, it's really been a synthesis of that effort. I don't know whether I want to go back and say what Ken Thorpe and the HHS people took, but it's mostly a synthesis as opposed to the recreation of absolute new data.

Q Do you know how much you spent doing this or is being spent?

SECRETARY SHALALA: No, but, you know, whatever the Xeroxing costs are.


SECRETARY SHALALA: He's got a fixed rate. He's a Deputy Assistant Secretary back there.

Q Can you tell me which plan you like better? Maybe all four of you can say which plan you prefer, the House or the Senate?

SECRETARY SHALALA: We are consistent with the President's point and that is universal coverage, private health insurance for every American that can never be taken away. As the two plans in the House and the Senate demonstrate, there are different ways to get there; but this is a bottom line for me: Every kid, every working parent ought to be covered in this country, and that's what universal coverage is all about.

SECRETARY BABBITT: I think that's exactly right. The issue is the goal. We have been for the last 10 or 15 years fixated on attacking parts of the system, talking about incremental changes rather than focusing on the goal. Now, exactly how you distribute the allocation of resources between the public sector, state, federal and the private sector in the form of employer coverage is something that we can continue to debate about and the Congress can continue to work on.

The bottom line in terms of public policy is to look out there at that constituency -- kids, women, working families -- and say, have we reached our goal?

Q If I could follow that up, though, the NGA isn't particularly wild about the Gephardt plan, especially the expansion of Medicare into this Part C proposal. As a former governor, what are your thoughts on that?

SECRETARY BABBITT: Well, again, it seems to me it's perfectly reasonable in this debate to talk about whether or not you get that coverage through expansion of public sector-financed programs, or through participation, incentives, tax incentives, mandates, employer coverage.

I guess my view is, I think they're all reasonable approaches. The question is, when are we going to finally come down and find the right mix?

SECRETARY SHALALA: Let me tell you what the NGA is really upset about. They're upset about shifting $48 billion in cost to the states on fundamentally an unfunded mandate, which would have very serious impacts on states across this country. And that's what the Dole plan does. It caps Medicaid and then shifts the match onto the states. And my colleagues here have related what the impact is on individual states, but nationwide it's $48 billion just shifted directly to the states.

That's what we've been doing all these years.

Q Whose definition of universal coverage were you using when you formulated these numbers? I mean, was it the administration's definition, Mr. Gephardt's definition, or Mr. Mitchell's definition?


Q What does that mean?

SECRETARY SHALALA: That means every American is covered. Mr. Mitchell's definition of universal coverage is 100 percent; Mr. Gephardt's is 100 percent. Every American having access and having the certainty of knowing that they have a health insurance plan there for them, and that they can afford it and that it's available to their families.

SECRETARY BABBITT: You want my opinion about this? This is a theological dispute of the kind that so transfixes people in Washington.

The bottom line is that when you make it past 95 percent, you're inevitably on your way, clearly, to 100 percent. I mean, the difference between 95 percent and 100 percent falls out of the momentum and the style of the system.

So, rather than having a Talmudic debate about the last 5 percent, I would suggest that we get on with the program.

Q The President did not say he would veto anything other than an "on your way" approach. He said he would veto anything other than guaranteed universal coverage. The Mitchell bill --

SECRETARY SHALALA: The President was very specific. And his own plan is similar. And that is, put a system in place that gets us to 100 percent. The Mitchell plan gets us to 100 percent with a system in place.

Q How?

SECRETARY SHALALA: It kicks in after 95 percent --first of all, it has an oversight group and it that collects data to make sure that we're moving toward 100 percent.

When you get to 95 percent, it kicks in a system to get us to 100 percent.

Q What is that system?

SECRETARY SHALALA: Let me have Ken Thorpe explain it in great detail. What it is, is basically a system in which Congress -- when you get to 95 percent, Congress takes a look at who's covered and puts new approaches in place to get to 100 percent.

Q Isn't that system really that the commission is set up and that Congress can reject or accept the Commission's recommendations, and if those recommendations are rejected, there's nothing in the bill to get to 100 percent?

SECRETARY SHALALA: In the Mitchell bill, there is an acceptance of the fact that it may take a special kind of targeted program to get us to 100 percent, that it may take some other kind of mechanism to get to 100 percent.

But the goal is to get to 100 percent. The process is set up to get to 100 percent. The President's own plan phased into 100 percent over a period of time. And I really think that we're talking about the number of angels on the head of a pin. Both the Gephardt and the Mitchell bills are bills that in all of their planning, in their goals, and in their mechanisms intend to get to 100 percent.

Q Isn't it really the number of uninsured on the head of pin? I mean, you're talking about --

SECRETARY SHALALA: No, not if you're uninsured, it's not the number of uninsured.

Q Do you have the numbers for each state and district on how many people are gaining health insurance coverage every month, because there must be such numbers. Otherwise, eventually you'd run out of people. If everybody -- no one would have health care.

SECRETARY SHALALA: Well, what the numbers show you is the number of people that lose every month, the total number of people who are uninsured in the state in the course of a year. I believe they do tell you something about who comes in and out of the health care system.

Obviously, if you have 45,000 people in New Jersey that are losing health insurance that month, some of them are going to come back into the system. So what you need is the overall number, some kind of a snapshot during the course of a year. You also need to know what these numbers show you.

Who are these people that are uninsured in America? They are not the very, very poor because they're covered by Medicaid. They are not the elderly because they're covered by Medicare. They are, in fact, working Americans often working for hourly wages or for small businesses.

Q Do you have that snapshot number?

Q Can you provide an age and income breakdown?

SECRETARY SHALALA: Age and income breakdown?

Ken, why don't you get up here and talk about the disaggregation of the data?

DEPUTY ASSISTANT SECRETARY THORPE: Just real quickly, the data that you'll see in here are really two types. Perhaps the easiest way to think about it is that we know on any given day there are 37 million people who are uninsured. It's also true that throughout the year, that 58 million people will at some point be uninsured. Some of them will come back and receive health insurance; many of them will not.

And that's really the distinction. The distinction is that people lose their insurance during the year which is a very substantial number -- one in four Americans under the age of 65. And those data are available by age and by income.

Q But these numbers that you have, the first number for each district and, I guess state, says 75,000 people in Jim Kolbe's district had no health care. Is that on any given day or is that for the whole year?

DEPUTY ASSISTANT SECRETARY THORPE: No, the first number in terms of have no health coverage is at a point in time.

SECRETARY SHALALA: That's a snapshot. The only way you can collect the data is by snapshots.

DEPUTY ASSISTANT SECRETARY THORPE: I think it's -- when they say losing coverage, lose every month is more is the larger number of people who are actually every month losing their insurance.

SECRETARY SHALALA: What this doesn't show you different ways to cut that data so that you have a feel for who's not insured and how many on any given month that you have that are uninsured in a state.

Q Secretary Shalala, you keep saying and the President has said all along that health care reform would bring guaranteed private insurance to every American. But the Gephardt bill would, as you know, vastly expand Medicare into a Part C, or some people say tens of millions of Americans would end up in such a program. That isn't private insurance, is it?

SECRETARY SHALALA: Well, it does two things. Number one, it folds the existing Medicaid system into the Medicare system so that there's not a change there in the status of Medicaid recipients. Number two, it gives people access to the federal health care system that we all participate in which means it gives them access to private health insurance. Number three, it encourages, as we have been, in the Medicare program and in other insurance. Number three, it encourages, as we have been, in the Medicare program and in other federal health programs for people to get their subsidies through the federal government but go directly into the private health insurance plan.

Most people don't realize Medicare is administered and run by the private insurance companies in this country. Blue Cross, Blue Shield and other insurance companies bid on those contracts. We have private insurers running the government programs so that the delivery system is very private and we have encouraged people to move into the private insurance market using the government subsidies. So, it's not inconsistent with all of the strategies, whether it's Dole or anyone else, and that is to take government subsidies for low-income people and to use them to buy private health insurance, to move people into HMOs. So, don't be mislead by, you know, even Medicare Part C, because most of those people will eventually be in private health insurance. It's who pays the bill.

Q There is a poll today that said that 65 percent of Americans are in favor of universal coverage that don't feel it necessarily needs to be done this year. They apparently don't feel the same urgency that the administration feels.

Can you explain that?

SECRETARY SHALALA: Yes. Let me explain it from my point of view since I spent hours answering people's questions on radio talk shows and other situations which gave me a pretty good feel.

I think that the public, after being beaten upon by ads and by these huge expenditure of interests to make them nervous and now they're all pointing and saying the public's nervous after they've made them nervous, the point that we continue to make is that if we don't do it now, the health care system and reforming it is going to be more expensive in the future. We're trying to do two things -- get everyone covered to improve their health, but also to contain costs which is very fundamental here. Costs are rising. They may have slowed down a little while we talk; but, frankly, we can't keep talking forever to keep costs down in this country. We have to have a system in place to keep costs down. It will be more expensive next year to go through these reforms.

And what do you say to millions of Americans who don't have insurance or a chance of having insurance? Shall we wait a year for their coverage for their families? So, fundamentally, it costs more to do it in the future. There's no such thing as a status quo. There are more people that have lost their insurance today than five years ago or 10 years ago, as our statistics indicate, and we do feel a sense of urgency.

Maybe if you have great insurance yourself and you know you're in a steady job and you're not going to lose it, you don't feel that sense of urgency. But talk to your next-door neighbor or to the person down the street who lost their insurance or has a child with a pre-existing condition or to the governor that knows what's happening to health care costs, and they'll give you a clear reason for doing this.

Thank you very much.

Q propose to pass the Mitchell plan?

SECRETARY SHALALA: We're working on it.

THE PRESS: Thank you.

END11:45 P.M. EDT