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Office of the Press Secretary

For Immediate Release September 18, 2000
                             PRESS BRIEFING

                           The Roosevelt Room

1:10 P.M. EDT

MR. JENNINGS: Today we're releasing a report that was done by the National Economic Council, Domestic Policy Council on low income prescription drug benefit proposals. It was done in conjunction with the Office of Management and Budget, HHS, specifically, the Health Care Financing Administration and ASPE. And I want to thank them for all the work that they did to contribute to this important analysis.

Basically, we're focusing on the low income initiative because there are a number of proposals on Capitol Hill to move their first, as you know, taking the position that we can go first and foremost to the people who needed it most, and we can do it immediately and we should go ahead and do it -- so say the advocates of low-income prescription drug plans.

We have done an analysis, which we'll go through, and I'm going to walk you through the executive summary and there is a lot of interesting detail, back-up tables, as well, I may reference with you as we go forward.

In short, we conclude that not only do such proposals leave out at least 25 million seniors and people with disabilities with absolutely no assistance, it also is not very effective at covering the population it explicitly purports to cover. And, in fact, after we go through this, you will learn our conclusion, after this analysis, is that if you really do want to target low- income beneficiaries, the best way to do it is through a Medicare program, because of the participation rates, historic, being at 98 percent-plus nationally, in terms of actual enrollment in the program.

I'm going to walk through step-by-step on this executive summary, and then I'm going to open up for any questions you may have.

First, you'll see on the first page of the executive summary an analysis of the population that proposals such as this explicitly exclude. In particular, it's two-thirds of all Medicare beneficiaries would be provided no assistance. Those are individuals who are over 175 percent of poverty, which is at least 20 million beneficiaries. And then there is roughly another 5 million who are currently Medicaid eligible, which, under these proposals are explicitly not covered for fear of buying out the base.

I think that if you go through each of these -- and I must say, in this analysis we are specifically focusing on the most generous of the two Senate Republican proposals that are currently pending. As you may know, Senator Lott and Senator Nickles have supported a version, I think it's 150 percent of poverty. The proposal that we're analyzing is 175 percent of poverty, which is for a single, $14,600; and for a couple, $19,700.

I may say parenthetically, however, that although they say the policy goes to 175 percent of poverty, the flexibility is given in the legislation that would permit the states not to go up to 175 percent of poverty, which is the fundamental underpinning of when we say at least 25 million. If any state went below 175, it would be more than 25 million beneficiaries.

If you go through the subtext bullets, you'll note that under this analysis this would explicitly exclude three-fifths of all seniors and people with disabilities who have today absolutely no coverage for prescription drugs. It would also exclude three of five Medicare beneficiaries with the highest prescription drug costs today.

It would also exclude three-fifths of the seniors who purchase Medigap private insurance. Which, as you know, those are the policies that can range well over $100 per month, have a deductible of $500 and generally have a cap at $1,250 with no catastrophic protections. And, obviously, this policy would exclude most Medicare managed care enrollees, as well. Some people say they have insurance. But if you look at the managed care enrollment and what benefits they're receiving, you're seeing that a vast majority of them that cap out benefits at or about $1,000, which many seniors would say is very inadequate.

Now, I think that is obviously the population that it leaves out. Virtually every middle income senior and person with disability would be provided absolutely no assistance.

But I think what this report does, I think quite carefully and well, is to focus specifically on the low income population that the policy purports to help. This is a very important point, because no one should be interested in advocating policies that don't achieve the outcomes they state, particularly if we know of another policy initiative that can do such a better job of targeting this population.

First, if you look at Medicare beneficiaries today, within the low income eligible populations currently in place -- for example, I'm talking about the qualified Medicare beneficiary programs which provide assistance for low income seniors for premiums, and in some cases, copayments -- you have a very low participation rate. In this particular section we're saying that nationally -- there's different data on this -- but there is 55 percent of the current population who is eligible are explicitly not enrolled in these programs.

If you look beyond the Medicaid program and you look at the state-based programs that were highlighted, or have been highlighted by advocates of low income programs earlier this month, there really are less than 800,000 seniors nationwide even participating in these programs in the first place. So it's a very small amount of people who have benefit in the programs.

There are many, many enrollment barriers within these programs. And although states have tried in other ares, they have not made very successful strides in simplifying enrollment. And, in fact, if you look at some of the data here, you'll find that eligible seniors must fill out long, complex applications; in over half the states, they have to meet extensive documentations on income and asset qualifications -- which those of you who have been covering the children's initiatives know that where there are such assets tests they're significantly declines in terms of the actual participation. And many require signing up through public assistance or welfare offices, which seniors, in particular, as the last points make clear, have frequently had large trouble in either accessing having a desire to access.

But if you go through -- so that first point really is how few people are actually enrolling in these programs and the reasons why. But then, after you get to the next point -- and let's just talk to the population who have actually enrolled in these programs and what they are receiving. In the Medicaid program -- which is a voluntary option, although all 50 states now provide it -- states once having provided that benefit can limit the number of drugs for beneficiaries to access per month. In fact, there are 14 states who specifically do that and a number of states limit it to only three drugs a month.

Also, if you look at the non-Medicaid program, the states-based program, they not only can limit the number of drugs covered, they can limit the type of diseases that are covered. So the state-based programs, these non-Medicaid states-based programs frequently will limit the type of drugs that are available by disease category -- diabetes or arthritis or you pick the popular disease -- which I think is quite disconcerting for people.

The other thing that I think is very important, and again highlighted in this report, is that the enrollment in these programs would almost inevitably be capped, one, because their resources are so small that have been allocated to these programs -- in fact, in the most generous Senate plan option, it's $1.3 billion that are allocated in 2001 -- and that funding for those states can be used to not buy out the Medicaid population, but they can be used to buy out the current state-based programs. And today, that would eat up a good portion of that $1.3 billion in 2001, and most people who have followed some of the financing approaches that states have historically taken would probably conclude that there would be a lot of substitution of federal for state dollars in that regard.

The next point really deals with, we think, another very important point relative to actually providing assistance to low income populations, and that is that if you're going to implement 50 state different programs, it's going to take a lot longer to do that than it would to implement a Medicare program.

This is important, and it's important to note many, many different conflicting problems that would be faced by the states, or people within those states who would like to access these benefits. What we found within the CHIP program was that it helped a great deal in getting these programs up and rolling when there was strong bipartisan support for these proposals at the get-go, and the governors were quite committed to moving ahead. And even with that commitment, as has been well documented, it has taken a number of years to get the programs up and running, and then there are still problems in a number of states, despite our best efforts to the contrary.

In this case, we have most governors, and all governors signed-off on the most recent NGA resolution, that explicitly stated that they would oppose the state best program that was either administered or paid for by the states. Either one of them would create great difficulty.

Particularly when you contemplate that this is for a time limited period, they're saying that this program would be sunsetted out, and if you assume then, you look at those proposals, it would be very hard to project forward that many governors would relish going into the programs in the first place, starting them up, even -- and taking years of times to do that, for a sunsetted program.

And then once having set that up, because they're programs that they historically have not wanted to administer, fearing that the Medicare benefit would not be there for them when they thought it was supposed to, four or five years later, and they would be required to continue to provide the resources that they never wanted to provide in the first place for this population.

I think that lastly, just from a political and policy perspective, dedicating a huge amount of political, policy, financial resources to state-based programs will not accelerate the movement towards a Medicare drug benefit. I think by any definition, it would slow it down and complicate things, and particularly when there are insufficient resources in the first place to do it at the state level, and a lack of commitment to do it.

I must say, in recognizing that some states would not want to pick up this option, some of these proposals have a fall back mechanisms to the Medicare program, or some federal government administration component, although there are no significant resources dedicated to that all. The idea that Medicare or any other federal government would dedicate a whole host of resources that aren't provided in this legislation, to do it and get it up and running in 2001, and not have an impact on the success of being able to do a Medicare benefit for all seniors, I think borders on being preposterous.

Now, as we conclude in this report, we say, well what is the best way to get low income population -- and I really begin or conclude as I began, which is to say that if you really do care about targeting the low income population, you'll want to pass a Medicare prescription drug benefit, because of the historic enrollment rates and the success in ensuring that all eligible do participate in the program.

And you want to make sure that as a meaningful benefit, that would not vary from state to state, that would not have caps on the number of drugs covered, that would not have limitations on the type of diseases covered, that would not have variations from state to state about who's eligible and what they're eligible for. And the best way, obviously, to do that is through a federally administered program to the Medicare, through a Medicare voluntary option that we've been advocating for on Capitol Hill now for some time now.

I'm going to just take one more moment to refer you to a couple of tables and charts in this report that I think are particularly instructive. On page three -- actually, excuse me. I wanted to show one other -- where's our pie chart? Oh, page four, okay, well let me start with page three. I started there.

I think you -- it's important to note this distribution of need by income brackets for seniors and people with disabilities. If you look at it, there really is no difference in terms of income distribution. Middle income and higher income need a drug benefit as much as low income, and trying to pick an arbitrary number, 175 percent, really raises a whole host of equity issues that I think are extraordinarily difficult to justify.

For example, an $18,000 widow who has $8,000 in drug costs versus a $13,000 widow who has $1,000 in drug costs. Who's hurt more? The former has a much greater percentage of her income dedicated to her health care expenses than the former. They both desperately need help. We think that $18,000 or $15,000 is not a high income person by any definition.

Secondly, if you look at page four, the pie chart, you'll see that again, this goes to the distribution point. Most of the seniors would not be eligible, at all. You see the noneligible category would be either over 175 percent of poverty or Medicaid eligible. The eligible not enrolled would be the population that is likely not to be enrolled because of outreach and enrollment barriers that I've gone through previously, and then you have a very small population of seniors that might receive assistance -- but, then again, even that assistance that they receive would have the problems that I've mentioned previously about what type of benefits they'd receive.

The next page shows distressing enrollment decline in some of these states-based programs. One very popular program in the country that is frequently highlighted is the PACE program in Pennsylvania, but if you look at the enrollment numbers in recent years, you see a dramatic decline in the participation in these programs. It certainly raises questions whether this is going to be a reliable mechanism to cover even the low income populations that we're talking about.

On page six you'll see a table that explicitly lays out those states who have specific limits on the number of drugs, as well as limits on the type of drugs. The type of drugs list is probably smaller because there's much fewer states who obviously are -- the state-based programs.

If you go to the next page, on page seven, you'll have specific sights of governors' stated positions on their discomfort with providing a Medicare prescription drug benefit, and all these are taken from the winter 2000 NGA resolutions. Then if you flip all the way back to page 12, you'll see a table on state data that I think you'll find it to be interesting. The first column goes down and highlights the number of seniors within those states who would not be eligible for any assistance whatsoever.

The next column gives a state-by-state breakdown of the participation in low income programs for seniors within those states. And then you have some specific numbers of the states who have programs up and running for low income populations. They don't mention -- they list 14 states, this is as of 1999, there's a couple other, there's about five more that are projected to take place -- come into the future and two in, sometime in 2000.

If you look at the next column, you'll see the limited coverage by state, the number being that they limit the drugs by number; the reference to type, meaning they cover by specific types. State funding column is how much in the more generous Senate Republican approach would be allocated by state. And you'll note that the number right beside it is how much the states are currently dedicating for the states-based program, which will be eligible to be bought out by those allocations.

So, for example, if you look at New York, you'll see that there are allotments of $92 million. If the state chose to, it could buy out its entire $78 billion allotment that it currently allocates. Then if you do a distribution by the number -- dollars amount, people per covered state -- excuse me, state dollars per person covered, you see how low the dollars per person that we would be -- or excuse me, that these proposals would allocate, when you -- and you have to recognize that the average cost for seniors is around $1,000. So it's a very, very small income --

Q What are the asterisks on some of those numbers on that last column?

MR. JENNINGS: Sorry, what are the asterisks?

MS. LAMBREW: The states, some states have a minimum allotment, so you'll see they all are $6.5 million. And that's what the law says, that there's a minimum amount. And it makes your dollars per person look higher, because it's a lot more than they would have gotten if the formula just worked.

MR. JENNINGS: Which helps explain the last thing. Maybe you should go to Alaska if this legislation passes.

At any rate, with this data in mind, we certainly conclude, and we think that most others would conclude, that taking a low income approach, a low income only approach to coverage of seniors and people with disability would serve neither the population or the policy outcome, the desired policy outcome.

We think, therefore, it strongly advocates for Congress to move quickly to pass a meaningful, affordable and optional Medicare prescription drug benefit.

With that, I'll conclude my presentation and be happy to take any questions you may have.

Q Chris, it seems certain that Congress is not going to do anything this year, so what's wrong with this as a temporary stopgap to give 15 million people coverage in the year 2001, and then Congress and the new President, whoever he is, comes back to do a Medicare benefit. Why not do this temporarily?

MR. JENNINGS: Bob, I don't understand how we just go through this presentation and you could say 15 million people would be covered.

Q Well, you said 25 were excluded. Presumably 15 million theoretically could be covered.

MR. JENNINGS: Well, as we mentioned, and we showed, very few people would be covered in the first place. And, secondly, the benefit that they would receive would be very little. And, thirdly, to the extent that you moved in this area, you would reduce the chances of getting a Medicare benefit for seniors -- which, by the way, would be the best way to get low income populations covered.

Lastly, I'd point out that this administration has not given up on the possibility of getting a Medicare prescription drug benefit this year, and we will work until the end of the year to get a Medicare prescription drug benefit done, if people are so inclined to do so.

But we think a low income prescription drug benefit offers little more than an empty promise. And I think this report makes quite clear that it is a step backwards, not a step forward towards providing meaningful prescription drug coverage to seniors or people with disabilities.

Q Well, if this is going to help so few people, why would it reduce in any measurable effect, the chances of actually getting a prescription drug benefit in future years?

MR. JENNINGS: Well there might be -- it might be true that there would be such dissatisfaction with this that it might expedite that process. But I'll tell you that if you're dedicating resources and time towards trying to implement a program, then I have seen it happen time and time and time and time and time again in the Congress, that they work on fixing the program that they currently have in place, and then they delay movement towards something else -- the line being, well, let's make this program work first, and then let's build on that.

I think that it clearly is the case that when we know we have a policy that today will be much more effective of covering low income beneficiaries, middle income beneficiaries and all beneficiaries who need to have a prescription drug benefit, why should we delay in moving towards passing a voluntary Medicare prescription drug benefit?

Q If Congress were to send something like this to the President in the last bill of the session, which if it were to happen is probably where it would happen, and basically it became either this or nothing, do you think the President would veto it?

MR. JENNINGS: The President will not support any initiative that is nothing more than an empty promise that would delay the likelihood of getting a Medicare drug benefit.

Q Is that a yes?

MR. JENNINGS: The President uses the word veto and it gets authorized by only the President. But there is absolutely no reason for him or anyone in the administration to want to move towards a policy that will undermine the outcome of providing a meaningful affordable prescription drug benefit for seniors and people with disabilities.

Q And if they say that's because this is an election year, and you're trying to deny them any achievement so you can run against them, what about that?

MR. JENNINGS: We want this legislation to be passed, enacted this year. The President would like nothing more. The President would like nothing more than to pass a meaningful patients' bill of rights. The President would like nothing more than to pass long term care. The President would like nothing more to expand coverage this year. The President would like nothing more than to do a minimum wage legislation. The President would like nothing more than to do meaningful investments in education.

We are going to work every day, for the remainder of this Congress, to achieve all those outcomes, and he -- the only thing I would like to add to that is to say what the President always says: no matter what we agree to this year, there will be plenty to disagree in the November elections. Of that we are certain.

Q I'm interested in this figure you have, that 55 percent of low-income people who are eligible for Medicaid do not seek it. Isn't that a referendum on the issue of need. I mean, sure, there's some paperwork and some things involved there, but if you really need it to have your drugs paid for, wouldn't you pursue that option?

MR. JENNINGS: Let me talk about that for a moment. State-based programs, particularly for seniors, particularly when people aren't interested in actually having them work, have a way of not being marketed quite significantly. If you don't know about the option, then you may not even go through the burdensome process of enrolling. If you even find out about that policy, which is a very, very difficult thing to do, particularly for this low-income population, then you have to go through burdensome application processes that, frankly, turn away millions of people and have since time immemorial.

So there is no question in our minds that a state-based program that isn't even supported by the very states who previously supported programs like CHIP is really not going to have a high likelihood of being successful.

Q Having said that, if what you say is true, then why would you want to keep this program in place for those people who are eligible?

MR. JENNINGS: You mean currently?

Q Yes. Isn't this predicated on the idea that Medicaid would still be there for the people who are Medicaid eligible?

MR. JENNINGS: Well, what our policy would be to actually pass a Medicare benefit that would ensure that all beneficiaries, whether they be Medicaid eligible, state-based eligible, or middle income, would have access to the same benefit package for all. You wouldn't be limited by the type of drugs covered or the number of drugs covered. And that would be the far preferable way to deal with a reform in the Medicare program as well as providing a meaningful drug benefit.

Q So your proposal does not keep these people on Medicaid?

MR. JENNINGS: Well, they would still be on Medicaid. In fact, Medicaid would have additional resources to wrap around the Medicare benefit that we have. But, no, the Medicaid population would have access to the Medicare drug benefit, and then whatever Medicaid wraparound on top of that that the states decided to provide.

Q If Congress wanted to start by doing something to assist low-income people, do you think they could design a better program, better benefit than Senator Roth has done?

MR. JENNINGS: I think that the answer to that, Robert, is that it's conceivable you could do a better bill, but it's inconceivable that a state-based program would come close to being as good as the Medicare benefit for low-income populations.

Q The states that have attempted to limit and manage this by choosing a type of drug generally have done that to deal with the most high cost diseases, the most difficult to manage diseases. Why is that necessarily a less equitable, more onerous way of managing what is an enormously spiraling expense for everybody than the kind in your plan and some of the congressional plans that sort of limit by price, once you're over the low cap and before you get to the catastrophic threshold, then you're left exposed -- why is that more equitable than doing it the other way?

MR. JENNINGS: I think that policy -- taking approaches that attempt to manage cost by choosing which disease should be covered and which disease should not raises incredible moral, ethical judgments that I think are extremely difficult for any government to do right well and with any justice.

Q Isn't that just kind of the market way that we ordinarily do everything? Don't we ration by price?

MR. JENNINGS: But there are very -- I may be wrong about this, but I know of no private insurance plan that rations by specific disease. I may be wrong, but I've never heard of one. And I don't think that we should expose that to the Medicare program or any other policy.

How does one choose someone who has a -- let's say that Alzheimer's isn't covered in those state programs because there's no drug for it, and then subsequently a drug becomes available for a treatment -- are we to say that someone who had Alzheimer's is any less deserving than someone who has diabetes? I don't think governments can or should make those type of judgments.

Q Chris, is there anything in the Republican proposals that can give you a point of departure for negotiations, and is there any sort of project going on now or that you anticipate?

MR. JENNINGS: Every time we talk to the Republican leadership, this issue is raised. We hear that there's many discussions going on within the Republican side about how they want to position themselves into the fall for the remainder of the Congress on this issue. Just recently I've heard that Senator Jeffords, Senator Chafee, Senator Snowe, Senator Collins I think have all cosponsored the Medicare drug benefit advocated by Senator Graham of Florida. I think there's -- I'm sorry, the two cosponsors, they voted for it. Snowe and Collins voted for it on the Senate floor for that amendment.

But we think that there's growing interest and support for a Medicare prescription drug benefit. And I think when people learn more about the limitations of a low-income model or private insurance model, then more and more Republicans who -- are more desirous of moving on toward a Medicare prescription drug benefit.

So that's the approach we're taking. I think that this is one of those issues that has more salience than I've seen on almost any issue on Capitol Hill or in Washington before. And as the President has always said, as the Congress comes closer to the people during elections, people have a way of moving off previously unmovable positions. So we're going to keep working it hard. We hope this report, which is really laid out for purely informational purposes to help divert policy approaches that we think actually delay and undermine assistance for low-income populations, hopefully moves it back towards a Medicare prescription drug policy.

Q Chris, to what extent do you think Senator Roth's involvement in this is a reflection of his own domestic political campaign?

MR. JENNINGS: Well, I would choose not to -- well, first of all, I don't know -- his current policy is the low-income approach. He previously advocated a Medicare type of approach. So are you referencing his current position in the low-income policy?

Q Yes.

MR. JENNINGS: I can't for the life of me explain why someone would want to advocate this policy. I think that over a period of time -- I believe that he is a -- we have great respect for the Finance Committee. We hope that they can work to get something done this year. We had been encouraged that he had explicitly rejected a private insurance model previously and was signaling that he wanted to work with a Medicare drug benefit in the context of broad reform. We hope that he'll come back to that.

Q What about the approach Senator Hagel was talking about, which is kind of federal underwriting of a discount card for drugs?

MR. JENNINGS: Well, I think that that's something that we'd have to deal with if someone in the Republican leadership decides to move in that direction. But I have seen little significant movement in that direction.

Q What do you think of it in general?

MR. JENNINGS: I think I would want to spend some more time looking at it to understand its implications. But, clearly, it would be less preferable than actually providing coverage to people and real insurance coverage which a Medicare prescription drug benefit does.

Q If you think that people aren't signing up for Medicaid or the drug assistance programs because of the complexity of the application forms, why do you think that they would apply for assistance under a federal program if they have their own feelings about welfare programs or whatever -- why would they --

MR. JENNINGS: Well, I think that, first and foremost, there might be some of those populations who choose not to do the low-income assistance part of our policy, but I'll tell you this -- that they would start with a discount policy, with real insurance, up to $5,000 when fully implemented with a stop loss protection, from day one of implementation.

And it would be our belief, and by the way, it is the belief of the Congressional Budget Office, that there would be significant participation in programs through Medicare for the low-income benefit, much more so than if you just had a stand-alone policy.

Q You said GOP leadership brings this up all the time --

MR. JENNINGS: We bring it up all the time.

Q Are you refusing to negotiate this plan at all?

MR. JENNINGS: No, no, no. I think that there's a belief that -- what we want to make certain, and the President has been very clear on this -- that we have a viable structure, a viable policy that ensures that whatever the benefit is, it's available and affordable and meaningful for all seniors and people with disabilities.

That does not mean there cannot be negotiation over how exactly it is administered, or what exactly is the benefit, or what the stop loss is set at, or what the premium will be, or what level subsidy will be, or what the cost-sharing will be or -- name your poison. There are a lot of initiatives, a lot of provisions, that certainly can be negotiated.

Q Even within this specific program, the low-income --

MR. JENNINGS: No, no, no within the context of a real, meaningful --

Q No, I understand that. I'm wondering, this is a specific proposal; are you refusing to negotiate with them on this proposal?

MR. JENNINGS: What we're saying is, let's not go down a path that won't even serve the population most in need, let's go down the path that actually achieves the stated goal by working on a voluntary Medicare prescription drug benefit, and let's do that now.

I think that, to the extent -- we're doing this now so we don't have to divert a lot of attention over the next few weeks to debating a policy that we just don't think is going to work.

Q So there's no point in talking about this proposal?

MR. JENNINGS: We don't think it's wise to build on a proposal that we don't think will achieve its stated objective.

Q Starting with the House-passed bill, is there a way that you could come from that direction and come from your direction and -- are you saying that there's compromise possible between those two approaches?

MR. JENNINGS: I think that the -- on the Medicare issue, we've seen a lot of divergent moves over the last several months on prescription drug coverage by the Republicans. Early on, they were at a low-income policy that was advocated by Mr. Bilirakis. That was in the beginning of this year.

Then, the House rejected that and said they were going to go to a prescription drug benefit for Medicare beneficiaries, not a Medicare prescription drug policy, administered through private insurers, that the private insurance industry, itself, said would not work.

Then, we had Senator Roth say, well, that won't work, so let's do a Medicare-type based program with some hurdles to get there, but let's do a Medicare-type program. Then we came back to a low-income policy.

Then we hear in the House that there is a discussion as to whether they should stay with a program that's available for all or for some. And I think that we need to get around to answering on every other policy other than the one that works. And we think that an evolution can occur, sometimes slower than we would want, but it can occur, and we hope it does.

And, really, our hope is that as people learn more about the alternative approaches that don't achieve their stated goals, that they will move towards a policy that does. And I have to tell you that I believe that there will be a growing number of Republicans who decide that they want a Medicare-based approach, but probably with some variations that they think are important to them for whatever policy outcomes they want, and we really long for the day that we can have that discussion.

Because as I've just pointed out, there are many, many variables that can be legitimately debated on a policy like that, and we would like to get to that point as quickly as we can. And so we thought rather than pull this out the end of October -- you know, look what this program would have done or whatever -- we're doing it right, as soon as we could do it, as soon as we knew they were doing this, we worked with all of the agencies I mentioned before to try to get this out as quickly as possible so that we could move towards a Medicare policy.

Q As I understand Mr. Thomas's bill -- and I'm probably wrong -- but it does include, essentially, fallbacks. It does acknowledge that there are places where no insurer is going to step in, and of course, most people think that's 90 percent of the places. But there are fallbacks in which the Medicare program itself essentially would offer the benefit although somebody else would sort of be a front.

I mean, is that approach in any way acceptable to you if Medicare was a fallback and there were PBMs that sort of fronted for Medicare --

MR. JENNINGS: You may know -- I think in this very room, the President said months ago that if one option could be a Medicare fee-for-service option and there were other options as well, he would be willing to entertain a discussion on that point. But that's very different than saying only some seniors will have access to it, and only if there are less than two or more private insurance plan -- whatever their price, whatever the benefit they offer -- is available.

We can have competition, we can have choice if that's something people want to discuss. But we need to have an assurance that every Medicare beneficiary has access to the choice of a meaningful, affordable, fee-for-service option -- not some, but all. It doesn't mean that all will take that option; it just means that they all must have that option.

Q Does that mean that there has to be a federal subsidy available to everyone, to all 40 million Medicare beneficiaries who want a drug benefit?

MR. JENNINGS: Well, that's what -- just as there is with the Medicare program today.

Q That's a yes?

MR. JENNINGS: Yes. Let me make one other point about choice and older Americans and people with disabilities. When older Americans and people with disabilities think of choice, they don't think of choice of plans, they think of choice of doctors. They want to make sure that their doctor can choose any prescription drug they think is medically necessary.

What we have concerns about with some of these proposals, even the ones that we've just laid out and the House Republican approach, is that they would allow private insurers to explicitly limit choice by saying you have to go through an appeals process to access medically necessary drugs, or you may not be able to access the pharmacist you trust to be able to access those medications in the first place.

Now, the President's proposal ensures that you can get the medication you need prescribed by the physician you choose at the pharmacist you trust. That's what his policy does. And it does so in the context of providing for a range of choices -- fee-for-service, managed care, or if you chose to stay in your health plan, you can do that, as well.

So we can deal with the choice issues, we have dealt with the choice issues. We hope that we can collaborate with Republicans this year to get something done. But, clearly, we think that the policy foundation has to be strong and it has to be workable for the populations that it purports to help.

Thank you all very much.

END 1:55 P.M. EDT