Press Briefing by Secretary Leavitt on S-CHIP Legislation

James S. Brady Briefing Room

11:21 A.M. EDT

SECRETARY LEAVITT: Good morning. The President has asked that I respond to any questions that you have with respect to S-CHIP.

Yes, ma'am.

Q: While Congress was out the administration directed states to meet federal requirements before they could expand the scope of S-CHIP. And one of those was to require children, if their parents had been previously insured, to have to be uninsured for a year before their parents could seek S-CHIP coverage. Why does the administration require children to be uninsured a year before they become insured again?

SECRETARY LEAVITT: As the President indicated, he believes, I believe, that S-CHIP was designed for low-income children and for those who currently do not have private insurance. That guidance essentially said this: This is a program for poor children; we think that poor children who do not have insurance ought to go to the head of the line. Those who have private insurance already and those who have high incomes ought to come after and, therefore, we ought to focus our efforts to make certain that we have accomplished that mission. There are many states and many children who currently qualify for S-CHIP who have not been enrolled, and that ought to be our first priority.

Yes, ma'am.

Q: Mr. Secretary, the President campaigned on a platform of compassionate conservatism. And I think when he vetoes this bill, as he promises to, a lot of Americans will be asking, where's the compassion? How do you respond to that?

SECRETARY LEAVITT: The President has made clear that he believes that all Americans ought to have access to an affordable basic insurance policy: that if a person is elderly, or if a person is disabled or poor, it's the responsibility of government to help them by providing them with access to insurance and to pay for most of it.

S-CHIP is a very important part of that. The President would like to see S-CHIP reauthorized, and we'd like to get on to the larger question of how do we provide insurance for all Americans. He made a proposal at the State of the Union that, ironically, would have -- according to the Lewin Group, would have provided insurance to 4.25 million children, children who currently do not have coverage. The bill that the President will veto will -- is represented to offer 2.6 million insurance. However, 1.2 million of those already have private insurance, and 900,000 of them already qualify.

So we're looking to increase the number of people covered generally, and to focus first on getting S-CHIP reauthorized. We'd like to see it reauthorized. We'd like to see it reauthorized before September the 30th.

Yes, sir.

Q: Mr. Secretary, there's a lot of discussion about these relatively higher income levels that some states allow families and children to be covered under. But my understanding of the

S-CHIP legislation is that it's designed to give states that flexibility and, in fact, those income limits would approve several of them by your administration. So why is -- why was flexibility a good idea in the initial version of the law, and now it's being -- you seem to want to steer these states into more of a one-size-fits-all approach? And could you -- in commenting on that, could you comment on the fact that health care costs are indeed higher in many places than they are some other places?

SECRETARY LEAVITT: First, let me remind everyone that S-CHIP was designed as a program to provide coverage for children under 200 percent. What we now know is that children who are in the 200-300 percent of the poverty line, that 75 percent of them have coverage; that those who are 300-400 percent, that 90 percent have private coverage. But there are still those who are under 200 percent who do not.

And so our effort has been to focus on those who have under 200 percent and to lay out guidelines to say, before we start going to those who are in 300-400 percent of the poverty line and moving them from private insurance to government insurance, let's focus on those who are poor. This is a program for low-income children. We still have many to reach, and that needs to be our first objective.

Q: Well, following up, what about the -- if states -- could you address the flexibility question? If states choose to have different rules to cover different populations, why shouldn't that be allowed?

SECRETARY LEAVITT: Well, the guidance allows them to do that. It says that, essentially, you need to put poor children at the front of the line. And once you accomplish that mission, if you have money left in your allotment, then you're free to cover them at levels that you would choose. That's according to our guidance.

Q: People, like Senator Grassley and others, have not been keen toward the White House position on this bill. Do you have the votes to sustain a veto?

SECRETARY LEAVITT: Yes. We believe that the Congress, the leadership of the House and the -- has been very clear that they would -- that they are prepared to stand with the President.

Q: Is a veto inevitable?

SECRETARY LEAVITT: Well, the President has said himself that at least the bill that we sense is coming from the conference, or the combination of the House and Senate, has some very serious problems. It helps those who are well-off as opposed to those who are poor. It moves people from private insurance to government insurance. It covers adults; this is a program for children. It's funded with some budget gimmicks. It funds the first period of time and then goes from about $16 billion a year, and then the next year it drops to $3 billion. Well, they've done that to be able to meet a budget target, but clearly, that means that they would have to either increase taxes or cut other places.

It is a -- and there's a better alternative. I mean, our message is very clear: We would like to have every American have access to an affordable policy. S-CHIP is an important part of that. It needs to be reauthorized. Now, the President has given me the assignment today to work with states to assure that we minimize any dilemmas that could come from Congress not acting. We'll be doing that. We believe that we can accomplish it, but not forever. And so the Congress does need to act.

Q: Can I clarify something you said? A moment ago, you said that the President would like to develop a plan that covers everyone, but then you also said the President would like to have a proposal that would increase accessibility to everyone. It was reported a few days ago that you told an editorial board that the President would like to work with Congress basically to cover everyone, and doesn't that mean universal health care coverage?

SECRETARY LEAVITT: What the President has said, and what I said to the editorial board, is that the President would like to see everyone have access to an affordable basic insurance policy. And S-CHIP is an important part of that. He has made proposals that, in fact, independent evaluators have said that it would cover 16 million Americans. There are bills that have been filed in Congress that use a series of tools that would cover as many as 21 million. If either of those would pass, we would see 4-5 million children covered in that context.

The President would like us to get S-CHIP reauthorized and then move on to the larger discussion about how we get every American access to an affordable basic policy.

Q: The President used the term today, "a clean, temporary extension" of S-CHIP. What does that mean in your view? What is the temporary part of this?

SECRETARY LEAVITT: Well, it seems likely that Congress will not be able to achieve reauthorization by September the 30th. And therefore, so that we have no continuity problems, as he put it, that coverage doesn't lapse for children, he would like Congress to temporarily extend the existing program so as to achieve continuity of coverage.

Q: Is that specifically Chairman Barton's idea? Is that the Joe Barton --

SECRETARY LEAVITT: Mr. Barton has -- as I understand, is going to file legislation that would extend it for some period of time. I think what the President has said is that we need to extend it for a suitable period of time that we can work these differences out.

Q: At lower funding levels or increased funding levels?

SECRETARY LEAVITT: Well, we need to extend it. It would depend on the length of time that they want to extend it. If they're prepared to extend it for a period of six months or 12 months, we'd obviously have to talk about additional funding, because there would be needs. If it's a short-term, then there is a narrow window here where we could, I think, minimize the amount of disruption. However, this needs to be reauthorized. There will be a problem if we don't get it reauthorized.

Q: What is -- you mentioned, or the President mentioned some kind of mitigation that you would try to work out with the states. What is that all about?

SECRETARY LEAVITT: Let me explain that S-CHIP is a program that has allocations of money to states. Each state has an allocation, and they have to meet the requirements of their state legislature within that allocation. Most states have money still in their allocations that they can continue to spend after the program has -- the authorization for additional funding has lapsed.

There are 12 states that we have concern may not have substantial enough money to do that over a long period of time. And so the President has asked that I go -- that I meet with each of the states and that we make certain that they have a plan in place to minimize the disruption that would come from Congress, not --

Q: Is there any way you can get other money for the states that don't have much money? Is there any way to get more money to them, short of an extension?

SECRETARY LEAVITT: The only way to do it, after the authorization for us to spend money has lapsed, would be to have a temporary extension, and that's what the President is asking for.

Q: Do you have a list of those 12 states? Do you know them offhand?

SECRETARY LEAVITT: I don't have them here, but I'm sure they can be provided. And actually, I think we're still working to assemble that list. We're working with each state, so it's likely we won't release the list until we've had a chance to meet with each state and determine just where they are.

Q: If Congress went along with the President's proposal and increased funding by $5 billion, my understanding is that just keeps CHIP where it is now. I talked to Senator Orrin Hatch, who has been really active in this, and he said that's not enough, that the current program doesn't reach all of the people who are uninsured, even the children. If the President wants everyone to have access to an affordable health care plan, and there are children not being reached by the current program, why doesn't the administration want some other increase in funding, somewhere between $5 billion and the $35 billion that he talked about?

SECRETARY LEAVITT: This is -- there are two questions here: One is a math problem and the other is a question of ideology. With respect to the math problem, what does the number -- what number is required in order to fund those who would be covered by the existing program? It's important to state exactly what our proposal is. We desire to see S-CHIP continue to cover those children who are under 200 percent of the poverty line. We believe that the $5 billion is adequate to do that. If it isn't, then we're prepared to talk about what the numbers should be.

But it's the policy, the ideologic question, that we want to focus on, because we think the bill that they're going to send goes in an entirely different direction. It moves toward a system where the government runs and owns the system. The President supports a proposal, or proposals, that would allow the government to organize the system, where everyone could have access to an affordable basic policy; where the government does help those children who have low incomes; where we're not moving people from private insurance onto government insurance.

That's the ideologic disagreement. I feel confident that if we resolve that, that the issue with respect to the numbers will work itself out.

Q: Could you clarify please -- if a state now covers more than 200 percent of poverty, what does the administration want to see? Does it want it not to cover those people, roll back to 200 percent? Or does it want to say you have to make sure that 95 percent of the 200 percent --

SECRETARY LEAVITT: We believe this is a program that was designed to cover those who were under -- are 200 percent and under. There are states who have chosen to go above that. We have offered guidance that if you choose to do that with your allotment, then, given the fact that we pay for 70 percent of it -- meaning the federal government -- we would like you to put poor children at the head of the line, as opposed to bringing in people who already have coverage and putting them in front of poor children. So it's very clear -- very simple guidance: Put poor children first before you bring people who are already insured in the private market.

Q: Doesn't the current law do that? My understanding is the wording of the current law does that.

SECRETARY LEAVITT: The guidance was necessary because the current law allows states to define what "income" is. It allows them -- it does not create a standard, and that's the appropriate place where guidance needs to be offered, where the law frames in a particular area but does not offer guidance in framing of the detail.

Thank you.

END 11:34 A.M. EDT