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Office of the Press Secretary

For Immediate Release January 19, 2000
                              PRESS BRIEFING
                         ON HEALTH CARE INITIATIVE

                            The Briefing Room

12:24 P.M. EST

MR. SIEWERT: Here to brief on the President's new health care initiative are two senior administration officials who should be familiar to all of you. I'll let them start.

SENIOR ADMINISTRATION OFFICIAL: I'd like to be referred to as senior official one. We'll be brief, so we can take your questions.

The President's announcement today is clearly a critical component of the President's overall health agenda and the new opportunity agenda that he will be discussing in his State of the Union. We believe that this is a cost effective, substantial and politically achievable health care package. We believe that it is well designed for coverage, for helping middle class families deal with the burdens of long-term care, and that it is politically achievable to pass it this year.

We feel that the forces of public opinion and momentum are moving in the direction of action on health care, on long-term care, on doing more for coverage for lower income families and children. And I think that, as part of an overall opportunity agenda it will be seen as a component ensuring that in this period of prosperity we're ensuring that all Americans are becoming full partners in our prosperity.

Let me turn it over to my colleague to just give you a quick layout of our steps. We'll be brief and then we're available for any questions you have.

SENIOR ADMINISTRATION OFFICIAL: I'll be brief. I think you've seen the paper. I want to give you a little bit of context and I'll go quickly to the summary and then we'll just do questions.

Clearly, we believe that we have an opportunity this year to get a significant health care coverage initiative passed and enacted. There are many, many issues on health care that there's much greater attention to and I think much greater support for on Capitol Hill -- the patients' bill of rights, long-term care, Medicare prescription drugs and coverage. And all of them are part of a larger -- a piece of larger cloth, a piece of whole cloth that really needs to be webbed together, but certainly are very, very doable. And we've had very encouraging discussions with people on all sides -- very encouraging.

Many of you have written about and talked about the HIAA work, Harry and Louise coming back for coverage. I think it's interesting that Families USA on the other side, the consumer advocates, are also very supportive of initiatives such as the one the President has unveiled today.

There's really four major components of the health care initiative. The first is building on what we now believe is becoming a very successful program. That is the so-called CHIP program, the Children's Health Insurance Program. That initiative, just this year, doubled enrollment to 2 million. We're seeing a lot of signals that that's increasing more significantly into the future.

There are barriers to enrollment, which we're going to talk about, but it certainly is a good base to start from and build on, and we think it has a very nice private-public interaction, either -- that have been very, very successful.

The parents component initiative that we are unveiling today is something that is not new. It is something that the Vice President and other health policy experts have been advocating in the last year as the most logical next step for coverage expansions. This initiative will provide increased funding for states to provide health coverage for parents. And as they provide coverage for parents and family care policies, it will have the indirect benefit of picking up children, too. When you have a family coverage benefit, you have greater incentives to cover both family and children and we think it will have a double benefit.

That initiative, modeled very carefully after the CHIP program, is $76 billion over 10 years, and would cover about 4 million uninsured parents and provide access to more affordable coverage for more.

Secondly, as we discussed last week, we are unveiling -- including in our health care initiative -- a whole series of provisions designed to eliminate barriers and enhance enrollment in the Children's Health Insurance Program. Right now, a number of states cannot do presumptive eligibility, enroll kids at schools, at child care centers, at homeless centers. We want to eliminate that barrier, make that an option for the states to do that. We want to eliminate all sorts of other barriers, as well, for the Medicaid program and CHIP programs to finish the job of covering the children and our goal of up to 5 million kids.

Thirdly, we have a whole host of initiatives designed to address the Americans who have very unique barriers to accessing coverage. As the President indicated earlier today, the most rapidly increasing number of uninsured, in terms of rate of uninsured in this country, are seniors, near elderly, 55 to 65-years-olds. They're facing the greatest challenge is finding affordable health coverage.

And as you know, we've been advocating this Medicare buy-in proposal. Now, what we're trying to do is address some of the issues of affordability by superimposing upon that a new tax credit, a 25-percent tax credit to significantly reduce the cost of that option. And we believe it will make it even more attractive, hopefully, to the Congress and also, obviously, to the public as a whole.

Secondly, as the President and my colleague have mentioned, in a very, very successful economy we also are seeing great transitions between the work force, from job to job over periods of times. People get laid off within this economy for periods of time. And if you look at and talk to the experts about uninsured numbers, they'll tell you that one of the biggest numbers that tends to influence the high number of uninsured is there's a lot of people who are uninsured for a period of time during the course of the years. These are the so-called workers in between jobs.

This option provides a 25-percent tax credit for those individuals who take advantage of the COBRA benefit that currently is available for people who get laid off, making it affordable and making it able to enjoy that stop-gap protection. Also it enables them to continue their protection under the Kennedy-Kassebaum legislation on portability. You do not want to have a gap in coverage because you can lose that portability protection under Kennedy-Kassebaum, and this protection will help ensure that does not occur.

Just very quickly, a few others. We doubled the tax credit that we had provided last year for small businesses to form voluntary purchasing coalitions. We extend coverage options for the Medicaid program to cover and CHIP to extend coverage to children from age 18, now, through 19 and 20. It's a population that are aging out of these Medicaid and CHIP programs and frequently don't have access to affordable coverage. And we want to give the options to states to extend that.

And we want to extend something called the transitional Medicaid provisions for people going from welfare to work, so when they do go from welfare to work, they have the ability to access coverage for up to a year. That provision is set to expire in 2001, and if we don't extend it, it will no longer be law. We want to make that a permanent extension. And, lastly, we want to and will continue to advocate for the restoration of a Medicaid option for states to cover legal immigrants, a priority for the President for a number of years.

And then lastly, the fourth prong of this initiative deals with those providers who are providing care directly to the uninsured today. They tend to be the public hospitals, the community health centers, the world health clinic -- these are the entities who are really are incurring significant burdens as we have more and more uninsured in this country, and also as reimbursement rates becomes more and more constrained both in the private sector and the public sectors. And there's a real need to have an investment in that infrastructure, not just to ensure that they continue to be able to provide those services for the uninsured, but also so they can use new technologies to link potential eligible populations of the uninsured into these programs. There is a real belief, both within the department and elsewhere, that this is going to be a critical component that supplements this overall coverage initiative.

So with that, the total package is $110 billion over 10 years. We anticipate when fully implemented, it will be $5 million to add to our CHIP goal of, and Medicaid goal, of up to $5 million. We think it will be at least 10 million people covered if we get this enacted into law. It will be a high priority of this administration. We'll work hard to do it, along with our other health care initiatives we have in this year's budget.

So, with that, I'll turn it back to my colleague and any other general questions you may have.

Q This would still leave 34 million people uninsured; is that correct? And what happens to them?

SENIOR ADMINISTRATION OFFICIAL: Well obviously, this administration did make a major push in the first term for universal coverage. Since then, what we have tried to do is expand coverage in the most cost-effective and realistic way so that we could move incrementally towards that goal.

If you look at the people who are uninsured, it makes sense to look at those in that range of 100 percent to 250 percent of poverty as the ones who would have the most difficulty buying health insurance on their own. The five million that are covered through CHIP, and the additional five million, this 10 million makes up a fairly substantial percentage of the uninsured in the lower income rings.

And so I think that while it covers a substantial chunk of the overall insured, it's an even greater and more substantial percentage of the uninsured families who would have the hardest time purchasing health care on their own. And our hope is that we can move -- continue to move incrementally in a way that covers as many people as possible.

We should know that the CHIP parents initiative at $76 billion would be a historic achievement. The children's initiative was $48 billion over 10 -- you start putting these together, you are getting again a substantial chunk of the families who are uninsured who have the hardest time affording health care on their own. And it's what we think that we can effectively get done this year.

And I think that we want to continue the vision of moving toward universal coverage; it's something we ultimately believe in. But we also want to make sure that in our last year, we're doing what we can practically and tangibly to cover people, because for those five or 10 million people, that's an extraordinary number of people, and for those people, this is a huge initiative.

Q Will the President propose using any of the budget surplus to pay for this program?

SENIOR ADMINISTRATION OFFICIAL: This will be proposed as part of an overall initiative that will deal with Social Security solvency, Medicare solvency, and seek to pay off the debt within 15 years. So it will be -- we are proposing this as we always have as part of an overall comprehensive, fiscally-disciplined plan that would pay off our nation's debt within 15 years.

I would look at 1997 as a model where, in that balanced budget initiative, we had a significant expansion of children's health coverage, but we did it in the context of a significant deficit reduction package, a balanced budget package that also had significant improvements for Medicare solvency. So our model would be to do this together as part of a fiscally responsible plan that's paying off the debt, as opposed to different pieces that, while worthy in themselves, need to be packaged together with something that we know maintains the fiscal discipline that's been so important for our prosperity.

Q Well, in simple terms, there are no offsets for this, it comes out of the non-Social Security surplus?


Q The President was kind of joking around about Harry and Louise, but he was optimistic. Have you looked at the health industry -- what do they call it -- the Insure USA Plan -- which would cost about $50 billion a year, and do you see anything in there that you can work with them on? Is there reason for optimism here for compromise?

SENIOR ADMINISTRATION OFFICIAL: I honestly believe it is -- -- this might be one of those moments in time where you can get something done. The conventional wisdom, obviously, in Washington is in an election year you can't, but if you look at the players who have been involved in health care reform over the years who everyone goes to to talk about coverage expansion and where they all are and whether they're in conflict or not, just last week there was a conference in which the Health Insurance Association of America -- Chip Kahn, President and former staff member to the Republican Ways and Means Committee, as well as Ron Pollack, who is head of Families USA, who is the advocate for low-income individuals across all age groups -- united on a number of key issues.

One was if you are going to significantly expand coverage, you should look at targeted enhanced reform, such as Medicaid expansions or CHIP enhancements, like the parents policy. I have talked with both of them in the last 24 hours and they're both very, very excited about this. I think that they'll say that this is something that is a very important down payment on moving towards significant expansion of coverage.

And, yes, in the context of this year, we think something can get done because the two groups that have historically been in conflict with one another are coming together, and it's something we hope to be their partners. I think the President was jesting a little bit, but we'll take any alliance that we can to expand coverage, and we're feeling very, very optimistic that something can happen.

Q You don't see, this year, getting bogged down with Republicans over MSAs?

SENIOR ADMINISTRATION OFFICIAL: I think that in the context of -- for example, you have the patient bill of rights legislation today in conference, and there are access provisions in that. There's tax deductions, there's MSAs, et cetera. There will be people who have different views about how to extend coverage, but no one is arguing that MSAs or tax deductions will significantly pick up coverage.

As Gene mentioned, the most cost-effective approach to expand coverage will be proposals such as the one that the Vice President and the President are advocating. I think that when you have the Health Insurance Association of America and others, almost all health care experts in this country validating that point, I think we can turn this thing around.

And remember one other thing: The CHIP proposal was a great achievement for the President, but it was a bipartisan achievement. It was Republicans and Democrats working together to design a proposal. We're building on that. And I think with that in mind, the concept of going beyond that and extending to parents that, sure, that not only parents get coverage but more children get coverage is something that governors, Democrats, Republicans can all agree on, and our hope is that that will spur this on forward.

SENIOR ADMINISTRATION OFFICIAL: I actually want to just make sure I clarify the answer to your first question. When we were proposing this, as I said, we were proposing it as an overall fiscal discipline package that does deal with debt reduction and Medicare insolvency. Within that overall context, this initiative would be coming out of the non-Social Security surplus. But I don't want to suggest that that means one can simply pull pieces out of -- that one can pull pieces out of our initiative and deal with them alone.

In other words, I think that we have always felt that the -- we have always, when we've talked about first things first, said that first you have to make sure that you are dealing with the fiscal discipline and solvency issues, and that in that context, it can be acceptable to use the non-Social Security surplus for other important issues. That is how we are presenting it.

The question of whether or not one could pull something out and just have it play to the surplus is not one we are -- that is not what we are proposing. We are proposing this as part of an overall fiscal discipline package.

Q You're saying that if Congress is not willing to put a certain amount of the surplus to paying down the debt, you don't want this, either?

SENIOR ADMINISTRATION OFFICIAL: I'm not -- you know, I'm not going to try to pose every hypothetical that would come down the pike. I think what I'm telling you is that what we are proposing and what we will be fighting for is an overall plan that meets our fiscal discipline. One, I think, could pull out elements of anyone's package, Republicans' and our package, and if one did them alone with no fiscal discipline measures, one might decide that even though those are worthy objectives, that without commitments to debt reduction or Medicare solvency, it would not be part of a responsible package.

Q Just one question. I don't know if you have projections for this, but given that the number of uninsured is rising, what's your projection for, if this passed and was fully phased in, what would be the number of uninsured in 2005?

SENIOR ADMINISTRATION OFFICIAL: In all honesty, I don't have it, but I will say that the most recent data by CPS and others seems to suggest that there is a slowing down of the number of uninsured. I think that we may be capping out. We still have a huge problem. So to project forward about what a baseline is, is really almost impossible to do.

Q Republicans have used the minimum wage bill in the past as a vehicle for access provisions. Given that you have such a focus on this this year and you want it done this year, you previous have insisted on clean minimum wage bills. Do you think that that might be legislation that you could attach to some of those?

SENIOR ADMINISTRATION OFFICIAL: As you said, our view is that with 4.1 percent unemployment, with a previous dollar minimum wage increase over two years that had no negative impact on jobs, we do not think that a modest dollar minimum wage increase over two years with the wage -- with the job market as tight as it is now, requires additional packages that, as you know, often turn into more Christmas trees. So we would continue to press forward proposing the minimum wage as a clean bill.

Whether or not there could be a construction of tax cuts or measures that were fiscally responsible and progressive and reasonable that could be part of an overall package, I don't know. I haven't seen such a bill so far.

Q Does the administration support any of the provisions the House passed -- patients' bill of rights that's now in conference? Does the administration support any of the Republican access proposals passed by the House?

SENIOR ADMINISTRATION OFFICIAL: Historically, we have supported, for example, the self-employed tax deduction provision. If there's a move towards accelerating that it would not be something that I could imagine us opposing at all.

I think where you get to a problem is when you have a tax deduction on the individual level that's very regressive, that does not cover anyone by the Joint Committee on Taxation's own numbers, that we think is the best way to target dollars? The President asked us to find the most cost-effective way to most significantly expand coverage. This policy that he's unveiling today does just that. We've clearly been on record opposed to medical savings accounts. We think that we should wait until the demonstrations have been completed before we expand those things.

But I think this is a time where we want to say that we believe this year we can get patients' bill of rights done with or without an access component. But our belief is that we can get an access piece done and it can complement the patients' bill of rights. You all remember in the debate on the House side last fall on patients' bill of rights, many Republicans said there should be significant expansions to coverage. Well, if that's really where they are, and I take them at their word, then I think they'll want to work again to build on a bipartisan team that we worked on back in 1997. And we hope and expect that will be the case.

Q Do you have a calculation about how much of this is raw, just tax credits or tax cuts?

SENIOR ADMINISTRATION OFFICIAL: In the package? If you want the full package, then you would need to add the $110 billion announced today, with the $26.6 billion that were announced yesterday. I think -- we can do that for you.

Q -- the long-term care?


     Q    No, but of this $110 billion, this isn't all tax cuts?
     SENIOR ADMINISTRATION OFFICIAL:  It's about $15 billion or so -- $14

billion or $15 billion is that, tax cuts, plus the long-term care is $26.6 billion. So you're about $40 billion.

SENIOR ADMINISTRATION OFFICIAL: The $26.6 billion is the total for the long-term care tax credit. A portion of that, about a third of that had been proposed last year. So the total package would be about, then around $136 billion and I think about $40 billion of that is tax cut. But we can get that for you more exactly.

Q Are the pharmaceutical people still coming tomorrow? And are you optimistic, have you had any private talks prior to this? Is this just going to be a getting to know you, how do you do? Or is this going to get serious?

SENIOR ADMINISTRATION OFFICIAL: I have met -- my colleague and I have had a meeting with Gordon Binder and Mr. Holmer. So we have had a meeting with them. They came to speak with us and we're very clear that they wanted to play a constructive role. And we made very clear to them that we wanted to work with anyone who wanted to be part of the solution. So we have had discussions with them and we thought they were productive and hopeful. But we'll still, obviously, have to see as it progresses, but they're going to come in for further discussion tomorrow with John Podesta.

     Q    We heard the first one really didn't go all that well.

     Q    What time do they come tomorrow?

     SENIOR ADMINISTRATION OFFICIAL:  I would encourage you to ask them,


Q What time are they coming tomorrow? When do they meet with Podesta tomorrow?

SENIOR ADMINISTRATION OFFICIAL: I don't know. We'll find out.

Q Since this is an election year, do you think somebody is playing politics on Capitol Hill about the health bill?

SENIOR ADMINISTRATION OFFICIAL: I think that election years are unpredictable, and I think people are very sensitive, maybe more sensitive to public opinion, public moods. But I think that what's important is that that can often work in the direction of getting legislation, and I think people too often make the mistake of thinking in an election year nothing will get done.

I think the sensitivity to public sentiment, particularly in the case of health care where there is such strong sentiment for action on health care bill of rights, on prescription drugs, on Medicare solvency and coverage, could very well help this be a very legislatively productive year.

THE PRESS: Thank you.

END 12:50 P.M. EST