>> as the president discusses his person decisions in his personal live and in office. >> tonight on c-span2, a look at the future of the health care policy. >> republicans won control of the house in 2010 midterm elections. many campaigning against the new health care reform. today they co-hosted a discuss about how the new republican majority might change health care policy. speakers included a representative of aarp, as well

as the former top health care advisor, as well as bill frist. this is an hour and 20 minutes. >> i think we have microphones on everybody up here. the opportunity for everybody to have gotten lunch. so why don't we get started? i'm ed howard with the alliance for health reform. on behalf of senator rockefeller, senator collins, and our board of directors, i want to welcome tow -- welcome you to this session about how last week's session might affect the new health care reform law and other health care issues. i also want to acknowledge the co-sponsorship of the robert wood johnson foundation. unless you are brand new to health care, you know that rwj is the largest philanthropy in

america doe -- devoted to health and health care. they want americans to lead healthier lives and get the care they need. brian quinn was planning to be with us, but had a late conflict. i know he would be happy to try to steer you to what you need for many of the programs that the foundation has in both health and health care. and if you don't know him, i want to point out bill ervin, the communications director of the alliance, former charlotte observers reporter, he would be happy to help you identify sources, track down contact information, suggest story ideas. he's the go-to guy. i should tell you the briefing is being broadcast by c-span. so please when you are asking a question if you would wait for a microphone to arrive at your

place, and identify yourself and try to keep the question as keep as you can, so we can get to as many as possible. we will have a transcript of this briefing available in a few days on our web site at allhealth.org. that's all of the overhead that you need to get us into this discussion. we have a high powered panel here to respond to your questions today. i'm going to introduce them very briefly. there's more extensive information in your package. then the show belongs you to. he's a resident scholar at the american enterprise institute. he knows more about congress than members of congress know about congress. >> that's not way of -- not saying much. >> low bar. >> low bar. yes.

he writes a weekly column for "roll call" that a lot of senators read. he's a student of, and expert on how government works. at the far end is dean rosen. he's a partner in the public affairs firm of melman, vogel, castaneti. he was the advisor to senator majority leader bill frist, at a time when he was the vice chairman for the alliance and health care reform. next to dean is john rother, the executive vice president of policy, strategy, and international affairs for aarp. he has also spent a number of years on the hill working for jacob jabit and john hines.

i should say john the new board of directors. he's sort of my boss. whatever you say, i agree with. let me get started with an international question. as i say, as soon as we get some responses from our panelist, we'll open it up to you. and it's pretty general. and we've had a lot of successful republican and house and senate candidates saying during the campaign that they wanted to repeal or maybe repeal or replace the new health reform law. some others said, well, that's not going to be possible. pointing to the democratic-held senate and the possibility of an obama presidential veto of any repeal bill. they focus on -- depending on who you listen to, defund and delay among other littertive

suggestions. what's your best guess, john, how the congress is going to deal with the new reform? strike it, or try to do something else many >> let me say in the interest of time, i'll dispense any usual comic monologue. those of us who writes jokes about politics and politicians, just to step back for a second within -- second, we've had the three waive elections in a row with the status quo and all of the actors in washington. brace yourself for a wave sometime, probably in two years, who gets caught in the under wash remains to be seen. that means a brittle and difficult environment for almost everybody out there.

and in the short run, meaning the next two years, one the real sets of tensions for president obama, now facing a very different and combative congress is also the challenge from his own base from the left. i was particularly struck election eve when russ feingold, one of the incumbent losers said, it's on to the next battle in 2012. which could be many things. the obvious one would be a challenge from the left to the president. that means that every issue that comes up, the most recent being how to handle the bush tax cuts, as watch with close scrutiny by his base. he has to be careful on that front. at the same time, as we talk about the health care issue, the really interesting set of dynamics to watch is within republican ranks. john boehner has basically called the health reform package

an abomination. he's called for repeal and replace in a speech that he gave at my institution before the election. he talked mostly in cautious and prudent terms in how he wanted to change the dynamic and atmosphere of the house. the second question was health reform. he got very animated. he said we're going to cut it off at the knees. we're going to cut the funding. the first thing that we're going to try to do is cut out and eliminate the $550 billion in medicare. i remember the great debate in the reagan years where republicans went ballistic every time that democrats talked about cuts. he said these aren't cuts. they are a slow down in the rate of increase. now they are cuts. also, because it put republicans in a way, because they were in the health care debate, in the funny position of defending every dollar of medicare into

perpetuity. that's going to come into conflict with the new members coming in, balancing the budget, cutting spend, and fiscal discipline. at the same time, the initial talk of repeal was replaced by repeal and replace. but i think there's a real dilemma here. when you start to parse out the individual provisions, most of them are quite popular. the one that isn't popular at all is the individual mandate. but if you take out the individual mandate and do as most republican candidates out there, and as the leaders have said and make sure that, of course, you are going to keep the ban on preexisting conditions, you are left with an impossible situation. it was striking that when karen mcanni, the head of the american association of health insurance plans made her first

overture, she said it required universal coverage. how we get around that is interesting. it's going to leave some people disappointed. you can't defund the program. to do so, you have to give bills that still pass and cut out the funding. and since most of it doesn't take affect for a while and get the bills through the senate and signed by the president. that won't happen. you can retard the progress. you can end up with a show down over the labor hhs appropriations bill. and we may see a number of shut downs, one the shutdowns must be the selective one. if you shut down hhs, you shut down all of hhs, you shut down cms, nih, a lot of things that people may not find very

comforting. and republicans leaders who remember the last shutdown, and the disaster saying they don't want to have that happen, they may not be able to control it and a new members who expect them to take a meat ax to it. they are going to try to mix up the information is to call kathleen sebeilus, secretary of hhs, in to testify every day. the committee chairman says he wanted to do 280 hearings this year. we're going to see requests, subpoenas, not requests but demands for documents and more documents. let me just mention one final thing. i believe one the first acts that we'll see in the new congress, they are going to stop extending unemployment benefits. that's going to have real implications and repercussions for health in the states. i suspect it's going to increase.

you are going to get more people going to the emergency rooms back, end you are going to have the states which are already strapped for funds coming to washington and says hey, if you are going to do this, you got to help us out. that includes a waive of new republican governors. they are not going to find much help from their compatriots on the hill who are focused on slashing the budget who are providing welfare for their friends in the states. >> pretty good of calendar of things to attack and look for. now we'll turn to dean rosen who is going to tell us why all of this can be worked out. >> well, thank you very much. and thank you for inviting me. i'm not sure i'm going to tell you how it can be worked out. i'm happy that i don't have to follow any of norm's jokes. that's the main thing. let me, i guess, first say something broad about how in fact reform played out in the elections. and i'm sure we'll get into some of the bigger dynamics.

and i'll try to respond to what i -- to your question, what i think -- how republicans, i think, are going to grapple with the repeal, replace debate. leadership elections will be next week. all of this should be taken with a little bit of a grain of salt. but i think the first thing, if you look at the election, i think this is how the new leadership in the house and returning republican leadership in the senate will look at it as, you know, you can look at the polls and take different lessons from them. for me, i think the clear message of the selection was about jobs. and the economy. but i don't completely buy the white house explanation that if it weren't for the poor economy and unemployment, we wouldn't be in the situation. i think there was also some very strong message about voter concern about government over reach, and the size and scope of government, and deficit spending that if you look at some of the polls and you look at some of

the outcomes, it was more significant than at any other time, even back in 1992. if you look at the deficit as a percentage of gdp, and also in real dollars, you can see why people are concerned about it. i think in terms of health care though, you know, you can -- depending on how you ask the question, you get sort of an even split when you ask voters do they want to repeal the law or something else. when you ask people whether they were sending a message about health care pro and con and you look at the tremendous vote among independents and others who voted were people were concerned about it. i read the election results in general. i think republicans will look at folks who voted for them and sent them to washington as a repudiation of the health care law or at a minimum significant concern about the direction. yes, there are voters who want to grow it, add a public option. i think the overwhelming message from independent voters and

others is that way want to scale back, if not completely repeal. but i think in context, where does that fit in, and for me, health care reform and again, i think the election results translate into how folks will interpret those and how they might governor, really were two things. one, i think they were symbolic of the overall message of government that has grown too fast, spending too much, trying to do too much. while people are probably not voting over the particulars of health care reform, clearly, and john will talk about this. some seniors were concerned about medicare cuts or reductions in growth or spending. whatever you want to call them. for most voters, i think it furthered a narrative, this is a big spending bill. $1 trillion bill. even if it's offset by tax increases or cuts, it's still a bill for government. it furthered the narrative. i think the second thing for me,

i got outside of washington and talked to real people, it also became a symbol of an administration and a congress that wasn't paying attention to what the american people felt were job one. which is to deal with jobs. and the president for however articulate that he was during the campaign, never really seems to hit on a message that connected health care in a meaningful way to the american people and to voters as addressing their concerns about the economy and about jobs. and so it looked to a lot of people, again, it furthered the other narrative of, you know, over reach, yes. but you took your eye off of the ball of what we wanted you to do. so when you look at it, and you look at the new congress coming in, you see a significant majority and there are some commentators, norm, it will be interesting your comment on this. but when you looked at the senate about a year ago, you would have said that republicans had a real uphill battle. they were defending more seats.

so in some cases, you can say that, well, if we would have had this candidate here, a different candidate there, maybe they would have picked up another seat or two. that's probably true. on the other hand, if you would have told me as a republican a year and a half ago we could have defended all of our seats by really being margin in places that have been close in the past in florida, ohio, and won six of those. i would have taken that bargain. in the house, looks like there are 62 new members with a couple of races undecided. what i think folks focus on and should focus on is that because of retirements and other things, there are actually more than 80 new members of the republican caucus. about 1/3 of the republican caucus, the majority there is new. so they are -- and of those people, i think by my count, there's at least 35 of them that have never held any kind of

elective office. not congressman, not dogcatcher. these are people who come to washington, maybe not with an attitude of let's go along to get along. they feel like they are here to make real change. what they mostly campaigned upon, in terms of health care, was repealing the law and replacing it with what they would say is common sense reform. i look at that, i look at the pledge for america. i look at the outcome and i'm one of those people who believes in this day and age, when you campaign on, you say you have to do. i think to answer your question, my sense that republicans in the house are going to have to have some kind of a vote. whether it'll come in the first week, first month, first couple of months, i think they are going to have a vote that repeals the law. they may replace some of the provisions in that vote. senate votes or bills to show what they are for. all of the reporters who write on this, there are a number of

legislative proposals that have insurance and other things they will point to and i'm sure reintroduce. i think they'll have a vote in the senate. i think there are a number of members in the senate unlike this last election, there are now 23 democrats, a majority of those up in the senate are democrat who's are defending seats. a lot of them come from big square states in the middle of the country that voted for john mccain and george bush. there maybe in a senate that's 53-47 essentially, three or four or five of those folks who might vote for repeal if it came down to a repeal vote and again in the senate amendments generally don't have to be attached to germane legislation. it could come up on a energy bill or tax bill. there will be that attempt. clearly the president is going to veto that. i think the question is, what do they do next?

and i kind of put it into three categories. i think rather than an either or, i think they are going to do all three. i think that are going to investigate, legislate, and appropriate dealing with the appropriations process. i take in reverse order. in terms of appropriations, there are things that you can do. i think sort of shutting down the entire government. you can attach riders and say that treasury funds shouldn't be spend to enforce the mandate now that it's enforceable until 2014. they already ramping up. i also agree they have to be very careful. i have personally not viewed the appropriations route as the most effective route. i think it's one route that people will look at in terms of investigate, we talked about this. there will be a lot more oversight hearings and i think as y'all know, there was a lot of frustration that secretary

sebeilus didn't come up and testify before the house and senate, accept in one circumstance on another matter. i think that will change. i think don berwick, he'll have another hearing next week, even max baucus said he thought it was not good use to the president's time to reappoint him in a recess appointment. what are they doing in the response to law? so i think we'll see that. i think the third thing will be in the legislative arena, and the way that i would look at it is that rather than a strike and replace, after they have their vote and make their effort, i think what we'll see is a series of surgical strikes. and maybe going after things, norm mentioned one of them. the individual mandate. we can talk more about the

substantive implications. but that clearly is unpopular, more than that, there's the state lawsuits that you can point to. i think they'll go after the independent payment advisory board potentially. i think they'll look at some of the industry fees and taxes which you can argue were -- offset the cost of the bill. but will very likely drive up premiums if you tax the underlying cost of care, they are going to go up. i think they'll look at some other programs, some of which will save money and others of which might harm the bill. whether they are successful with a president that still holds the veto pen, we're among among -- obviously that's an uphill battle. but my last comment would be, i think that in anything, the next couple of years beyond what are legitimate taking the republicans at their word legitimately and what they will do, in terms of trying to attack the law are also going to be an attempt to keep alive in the minds of voters those things

about the bill that they don't like. for me, the next couple of years in some ways, become about the 2012 elections. which are -- i guess started on november 3. and in part become about 2013 when there maybe a new president in the white house and maybe more seats in the senate in the republican hands and reminding all of us that many of the provisions, while they are under way, the insurance reforms and new subsidies don't take affect until 2014. that becomes the real focus is keeping this alive, even if they can't make changes this year because of the president, trying to be in a position to really make some of those substantive changes in 2013. so i'll stop there. >> john, how does this strike you? either from the institutional point of view, or from the political point of view, or any other? >> thank you for the opportunity. it's a real pleasure to be here

with norm and dean, both of whom i respect, and today, agree with. [laughter] >> now that everything has been said, i guess not everyone said it. i'll try to put my own interpretation on this. i do think it's easy to over interpret the election results for several reasons. and to over dramatize that the potential impact on health reform. first of all, the people who voted last week are not the same as the people who will vote next time. there are many fewer of them, many of the demographic groups were much less represented as is typical in mid year, and i think the -- to pick up where gene left off, the election isn't the one we just had, it's the one we will have in 2012. it'll be a different electorate. the second point is most voters today, perhaps understandably,

say they are confused by health care and what is in the act that could affect them. there are many messages during the campaign. unfortunately, from my perspective, many were designed to scare people, especially seniors. but it's understandable that there's confusion. it's a complicated act. it comes into being piece by piece. so the next two years will be an opportunity to help people understand more clearly how it might affect them. i don't think that you can say there's a mandate out of congress to spend a lot of emergency on health care. i think there's a mandate to spend a lot of energy on the economy. i think there's a poll in the paper this morning that shows that a small minority want congress to focus on health reform as opposed to the economy.

i think that's going to play itself out the more that people try to focus on health care and people at home might say, well, okay, what about jobs? and congress is going to have to respond. i also think there's no mandate at all for an alternative approach to health reform. you can see that from the polls. they -- elements of alternatives are not particularly popular. and many provisions of the affordable care act are popular. so you have an act that's very interdependent in it's design. it would be extremely difficult to start polling it apart without as dean said either raising premiums or increasing the deficit substantially. i think as people start to confront that, we are going to see more and more caution about changes. i also think that politically,

provider groups are still quite supportive of the act. doctors, hospitals, insurers, drug companies, where still supportive of the act. i think there's good reason for all of those people to be supportive and those interest to be supportive. i think again that'll tend to temper the debate. i do think that the benefits of the act have not yet been appreciated. particularly for people who need improvements the most. the people who are chronically ill, the people who are frail, children, i mean there are some very important advances in the legislation that would seriously improve the situation of people who are quite sympathetic to the public. and the more attention that they get, in terms of that improvement, i think the more

impact that will have on the tone of this debate going forward. i would conclude in much the same way that dean did, in that the real battle here is not so much about legislation in the next couple of years and not really about appropriations, but really about all of the hearts and minds in the american public. investigations are going to be a tool. but that can happen on both sides of this debate. and the election that matters is going to be 2012. when i think we'll know the answer after that as to what the future is for health reform. >> okay. thank you very much, john? we are now at the point where we are actively soliciting your questions. let me just say we also have had even before we knew that there would be c-span coverage, we've arranged a teleconference for reporters who are outside of washington, d.c.

and we've given them contact information so that if they have a question that they would lake to have -- would like to have asked, we will try to get it responded to. i'll remind you that the e-mail address to send your question is questions -- with an s --@allhealth.org. have a microphone. please identify yourself. >> my name is mark, i write for medical device daily which telling you something about my orientation. the medical device tax of 2.3% pails in comparison to a lot of similar issues in connection with health care reform. i guess the question here is whether it's going to sort of disappear into the weeds there. some members of the senate from

minnesota, for instance, klobuchar and franken have obviously orientations. is it just too small compared to the other things to garner any attention for the next two years? >> i think one answer is republicans are going to try to get some traction by having individual votes on individual pieces. every part of the revenue component of this is going to be attacked, and some of it will be attacking tax increases. and clearly with an attempt to lure some democrats over. we may get some votes. my guess is they are more symbolic than real votes. that either this will be in the context of bills that will end up possibly being filibustered by democrats. in some cases, you may get republicans joining a hand full of democrats to support something. and the core of democrats will say we're not going to let that happen. others will move into a conference and try to take care

of it there. which may mean more potential gridlock and an ability to come to an agreement or it may get to a presidential veto. but i'll probably be a little -- i'll be immediately surprised if that medical device tax got removed. >> i'll just add -- two quick things. i think the medical device tax points out two interesting sort of broader questions. i think that become issues that republican leadership is going to have to grapple with. one of which is, you know, how do these -- how do any attempts to change the bill at all -- how are they positioned? so, you know, i think that republicans and the democrats who support modifying or repealing that would be probably less successful by portraying that as something that's going to help an individual industry by relieving a burden from devices or other folks. but as i sort of implied

earlier, i think that a number of those industry fees and the device taxes is one the clearer examples. i think it can be portrayed as things that are going to, you know, increase the cost of under lying products, and, therefore, translate into higher as opposed to lower premiums as one the goals of the bill. i think how that vote and others get positioned is really important. i think the other thing, we don't completely know yet and norm and john may have a view of this, but in the past, under at least republican control, for many tax cuts, pay as you go budget rules generally did not apply. it'll be interesting, when you look at the republican caucus now in the house and senate, to me it's unclear. will they say they have to pay for tax cuts or not? if they don't, and they hold the sort of traditional republican

view, we have to pay for new spending, but tax cuts are returning money to the american people, if they don't have to offset those, i think it makes it easier to have a vote that pulls over some democrats to reduce the impact of those fees. one thing -- none of us talked about. i think one the over riding messages coming out of this election. we saw this earlier this week with the initial propro sal from the entitlement commission is the concern about spending. that's going to have to be balanced against all of the things that might need to be offset potentially. >> do you think that the republican rule changes that are now under consideration are going to make it easier to do that. is that what you are eluding to? >> i haven't been privy to that. norm may know. >> yeah. they are talking about their own sort of first of all adeptation

of the you cut plan. they are will advice from callers and listeners all around the country. they are clearly not going have a paygo that includes revenues. how in the end you reconcile that with the desire to reduce deficits and debt remains a big question on the table. it's a question that has now been brought into full relief. as have some of the full issues of medicare and social security. alan simpson and mr. bowles have put things out there that are creating discomfort in both parties. >> and you raise your -- well, we have someone here now. >> hi, i'm julia mcdowell, i'm the editor of the college of american pathologist. can you talk about how you see the new congress dealing with

the physician payment sgr issue? >> well, i'll take a crack at this. this is one of our top priorities to reassure seniors that they will have continued access to their physicians. and we certainly hope that the lame duck session will tackle this. it's an area where because it's new spending will probably have to be offset elsewhere. i think the only reason that i'm not more confident of the result is not because of the desire to extent the sgr, it's the uncertainty about what the offset would be. and how possible it would be to go forward. but we are pushing very hard to get congress to act very quickly on this. because they need to do something by the end of november in order to prevent disruption. >> you know, the democrats in congress now in a lame duck are

going to be tempted to kick this can off into january. precisely for the reason that john mentioned. they can't just let it drop. because it brings, you know, something close to catastrophe for physicians and for access in coming months. but i think they'd rather leave the very difficult choice, because there will be a paygo provision on spending for what to do with what is a substantial sum of money to the republicans in the house to deal with. >> yes. >> i'm jim of health reform week. one the provisions in the reform law that seemingly could be somewhat vulnerable could be the insurance exchanges since they don't start until 2013. i'd like to ask the congress what they think the congress either by funding or other means that would interfere or prevent the changes from starting up in that year.

>> i'll take a first crack at it. i mean i think -- i think again with -- to john's comment that so much of the bill is interlocking and the exchanges are clearly, you know, one of those mechanisms. are they absolutely essential? probably not. but they are clearly are integrated with things like the forum and subsidies. i start with the premise that any change, other than things like on the marge -- margin but important, like the 1099, the president is going to be resistant and veto if it gets from the senate to the desk. i would say given that there are some kind of wholesale repeal of even the exchanges is going to be unlikely. what i would say is as the governors begin, they are already under way to sort of look at legislation, look at the

guidance that maybe coming with washington and with republican governors picking up more seats at the state level and republican controls more legislatures at the state level. i think what you may well see, this is another very interesting area in terms of the role of the states. they have a huge role in terms of implementation with the exchanges and other things. you might see it bubbling up from the state level. real concerns about some of the regulatory requirements and other things that might be dictated to the extent that they have flexibility to make changes. to the extent they feel like they don't have flexibility to make changes. i think what you might see if the issues get ripe enough is some surgical strikes or targeted attempts to maybe make some changes to the exchanges. i remind folks that again sort of the leaning republican house alternative, there was a form of exchanges there. it's not a -- it's not necessarily a democratic idea. but the details as in many of these things are very different.

>> yeah, just quickly. there are two states today with exchanges, massachusetts and utah. they are very different. one is more regulatory approach. one is more passive. and i think that's the question going forward is which model and since it is a state by state decision, i don't see this being relitigated as the federal level. >> i would say the one caveat is we're going to see some guidance based on press reports and other things in the coming weeks from the administration. i think again to the extent that the governors feel that the requirements are too strict, you know, the alternative is to just say we're not going to do this and let the federal government do this. that maybe an option. the extent that they want to do this and keep control, i think you could see them saying we think it's a good idea. we want to go forward. the rules that we are laboring under from the law or regulation or both are too onerous. we want to see the change.

>> a couple of dynamics here, they campaigned in a very hostile way to the health plan have really talked about boxing up the exchanges. not using money or their discretion. it's going to be an interesting channel, i think, in many of the states to figure out how you can keep from disrupting your own citizens and make your political point beyond filing lawsuits or amicus briefs. it's actually more of a republican ways. in some fashion to bear. the main republican alternative has been we don't need any of this. we have to let people shop across state lines. buy insurance across state lines. the real danger is it works in the way the credit card works. the race to the bottom. you just look for a state that as the least cumbersome regulatory offer, the poorest

plans. and the alternative to that might be if you did get some bipartisan give and take is to return to the national exchange as one option here. that, i think, in a world where parties actually talk to one another, might be on the table. since they don't talk to each other, it's probably not. >> okay. we've got gentleman right here. then i've got a couple of questions from around the country. go ahead. >> gregory talkman from the pink sheet which is from the pharmaceutical industry. two questions, one similar to the question on devices. what drug provisions that you see might be targets going forward? and second question related to the patient center of outcomes research institute, how much is that? and do you see any changes that might be attempted to that body? >> let me say to our panelist,

we've had a request from one the reporters on the phone to identify the panelist before they speak. who would like to take a crack at that? >> that would be me. this is dean rosen. i think with respect to the to - to many members, if you look at debate, there was general agreement among the republicans in looking at research. there were concerns about some of the individual provisions. i would say, you know, that probably is on the list. but i'm not sure it's at the top of the list. i think if you look at the boards and commission that are out there, i would put the independent payment advisory board above the outcomes research institute as something that would be more likely to be targeted. but again we'll see. new members are going to come to washington in a couple of weeks and they will have their views on how they want to proceed. with respect to other provisions

on drugs, i would say maybe two things, and john, who is at the table and a lot of the bargaining and discussions might have a different view on this. i think that with the device tax, it was clear that that was really done not with a wholehearted agreement of the device industry, but the fees on the pharmaceutical industry was a different matter. it was part of a negotiated settlement so to speak. i think that one maybe less likely to be undone. and certainly the industry might be less likely to go to congress and, you know, remember we'll still have a democratic senate and president. those were really the two party that is drove the agreement. let's undo what we agreed to. i think that's probably less likely. what i would say is that there are a number of provisions in the past that one of the things that pharmaceutical industry was

able to do very skillfully, i think, was to keep out of health reform a laundry list of things that could have hurt the industry more and i think one open question is whether some of those things, particularly given republican control are mild and maybe back on the table. in the sense there maybe democrats who are congress that might want to do it. there might be new republicans that have different positions than republicans in the past have had or others in the name of deficit reduction that are maybe open to ideas that they might have foreclosed in the past. for example, you saw the deficit commission proposal, again, just a proposal earlier this week, proposed to extent the medicare rebates to the low income population in the medicare program. so maybe in the name of budget savings and others, there maybe more receptivity to those kinds of ideas even in a congress that's now divided. >> this is john rother, i could just add i thought it was

significant that the ceo of glaxo came out calling for health reform to go forward. i certainly agree with dean's point. this is a negotiation in which the industry won quite a few concessions. and if this issue is reopened, i believe they may end up doing worse. particularly in light of recent price increases that are going to look unappetizing to anyone concerned about the deficit and the cost of health care. i think there will be -- if they reopen this, i think there will be -- more pressure on the industry rather than less. >> yes, norm. >> this is norm ornstein. always keep in check we're always at a populous anger. it's the search for scapegoats. it's a dicey or delicate time, i think, for everybody in the

various industries. the danger that you are labeled the next scapegoats. it doesn't necessarily happen because you are the greedy bastards, sometimes you are a first one in the line of fire. that's what happened to the health insurance industry. it's also going to be -- i think, going to put some pressure on the white house. because the temptation there is to push the blame off and sometimes it's deserved. but you can lose allies in this process who have helped you get through this if you are not a little bit careful. but the industries, and i think this is the pharmaceutical industry, i think any objective observers would say came out quite well in there. they were smart to get in early. they got a lot out of it. billy took a lot of flak from many within their own industry who didn't understand that he knew what she was doing. i just would have a hard time

imagining they would be foolish enough to reopen this in a way that would bite right back at them. >> yes, sir? >> merrill with the fiscal times. you raised the possibility there could be some tweaks in the president himself after today in the press conference say we may look at the 990 issue in the $600 that small businesses will have to file forms. are there some other things, i'm specifically thinking about the mandate that democrats might decide might be worth taking a look at. this is after all, the economic industry in which the insurance industry is a primary receptor. is there the possibility that democrats would peel off and do that. president obama, as candidate obama, didn't back the mandate.

>> i do think this is actually is one the biggest problems to start with the republicans have. because the temptation is going to be to go after the mandate. americans don't like mandates of any sort. but you can't do that and keep the other provisions that are popular without having a lot that unraveled. and you maybe right. some democrats might join in out of mischief. the insurance industry would be the first up to the plate saying you can't do something like this. taking a look at the mandate, and taking some adjustments, including, taking a look at some of the penalties for not getting insurance are adequate to the task maybe in the light of the massachusetts experience and others. that's something that you may want to start to look at now even before you actually implement it and then do over sight. >> this is dean. i would say i have a different political take than norm. i think the mandate is a bigger

problem. if the republicans in general don't want the legislation to work, i'm not sure why they would care if one the provisions that was really unpopular kind of unraveled the entire ball of yawn. i'm not sure there's as much risk in that they are invested that may give them an opening to come in and do something more likely -- more there likely in the future. i'm not sure there's the huge political risk expect to the extent that it may raise cost under the current structure. they don't buy into the current structure. i would add i think there's some other things in there. we talked about the individual mandate. and there's -- that's essentially, you know, a tax enforced. there's also a whole series of corporate taxes in here. you know, not quite a mandate, but a pay or play kind of requirement. even for those employers that are offering coverage. those are going to be at the

heart, the substantive provisions that's going to be at the heart. which is what are employers doing to response to taxes in the future or maybe a penalty that's less than keeping their coverage. you've seen some of this already with retiree coverage. i think to the extent that maybe -- that might be vulnerable again. the president may veto it. where you can see in the name of corporate tax and overall cost of doing business where you might be some attempts to go after those and losen restrictions on other things that are constrained to a extent in the law. >> we'll have a quick comment. i do not think the insurance industry is the major beneficial reof the mandate when it's paired with the minimum loss ratio that will get tighter over time. i do think the people who really win because the mandate are older people who are age rated against today, sick people who are excluded today, people who are suffering because of the

failure to bring everybody into the same pool. if we eliminate the mechanisms to do that, we're going to have a very difficult time protecting the people that we most want to protect. >> and this is norm just getting back to dean's comment. i think what i would be afraid about if i were republicans, if you go after that provision, and it unraveled, that means that you take away the popular parts of the bill that people are looking for. and your the ones who did it. so it's a little bit of a danger there. it can unravel in a way that causes some level of chaos and it will be pretty clear what caused that chaos. >> would it unravel quickly enough to happen before the 2012 election? you think? >> well, some parts of it could. this bill was designed for a variety of reasons. to try to provide goodies before the disruption occurred.

you can imagine, especially if you have a clever president. just as we saw with the shutdown that ended in 1995, you can make sure it's causing pain to people in a way that there's a direct connection with the actions that immediately proceeded it. >> i would just add one thing that dean rosen that we haven't touched on either. which is the state lawsuit that is are going forward. and, you know, i think initially, there were a lot of smart legal scholars and others who discounted them. the fact is a couple of those cases are still alive. you know, the one thing that we don't know, the courts are inheritly unpredictable place. you may well see the results of those lawsuits having some impact on how these are written. i think that would be a nightmare kind of scenario for the president to have the outcome of a court case thrust really a popular issue back and have them have to defend it, and

then we -- i'm sure we'll probably see the larger repeal effort first. and it maybe that the republicans wait for the jut come. i'm not sure they will. they may wait for the outcome, or at least more clarities among the lawsuits before acting on the individual mandate. because i think we can't discount the potential impact that those might have too. >> i agree with dean. and i do think we all ought to be looking ahead. here's one substantial possibility. whatever happens at the district court level, this issue is going to the supreme court. we know that. and the part of the bill where the constitutionality is most endangered is the mandate. that's the core of the constitutional case. it's an over reach of the commerce clause too force people to do things that they don't want to do. there's a strong case to be made that's especially given that the burden for those who don't have insurance calls on the rest of

us because it adds to the cost of health care that the rest of us have to pay. but i can imagine a scenario where a 5-4 vote in the supreme court with the predictable five over turns a major act of congress, an initiative of the president that takes us right back to the court of 1933, '34, '35. and a constitutional confrontation in a way that has unpredictable outcomes, not in terms of the policy, but the politics. the idea that they do this is going to be portrayed in a political arena in a way that goes beyond whatever happens in the health care bill. >> let me take a question. this is from sarah at myth -- politico who's listening.

it gets back to something norm and dean have mentioned. that's notion of the potential shutdown of a governmental agency like hhs. the question as written is we know that mitch mcconnell has said it would not come to that. but she's curious if you think the influx of new members who want to repeal, aggressively, would lead to this kind of a situation? how likely is it? >> well, this is dean rosen. i guess my view that i don't think it's likely. but, you know, like everything else and divided government it might be possible. you may not have -- one difference that i would, you know, remind everything that in the last shutdown, republicans controlled the house and the senate. this time, there maybe attempts to sort of work things out a little bit more out of necessity

because you are going to be -- before it gets to the president to force a shutdown, you are going to have to have some agreement between the house and senate on what they are sending down pennsylvania avenue. but i think, i might answer and just take a bit of a broader view which is, you know, we're -- i think one caveat for the whole discussion today is that to an extent, almost all of us in the room are focused on health care issue and i think back to the lesson that i think democrats have not quite got yet out of this election which is it was about jobs. it was about the economy. and i think norm said this earlier. health care, i think, is a very clear example of a lot of things that voters were reacting to in this election. it's not the only thing. it's probably not job one. so i think that we have to remember that. i think as a result of that, i think, you know, leader mcconnell and others were, had

i thought a great deal of humilities coming in and saying, we have to remember the election was a part on referendum on the president, and not necessarily a vote for the republicans. in the same way, while the republicans need to raise this, keep it alive, and do what they said they were going to do, and have to balance the need to not look like we are focusing the entire next bill on health care. there are a lot of things that are connected which are a big deal as well. >> this is norm. you know, i would -- we've a few potential scenarios here. let me start with what i thought was an extraordinary comment from the likely incoming speaker john boehner for election eve. either he hasn't read his constitution in a while, or didn't get terribly adequate civics education back when he was growing up in ohio, or he

has a different point in mind. because the constitution says it's the congress that sets the agenda. it's the president that disposes. but we are going to get into a kind of elaborate blame shifting game here over who's actually in charge and who's responsible for some of these problems. we know that republican leaders are trying to down play those expectations not just for the public at large, but for the new members coming in. they want to manage the new members, rather than have the my members manage them. they don't have government shutdowns, because the president has the advantage under those circumstances. the fiscal year that began october 1, not a single appropriations bill. we have a continuing resolution that expired on september 3. it's not clear we are going to be able to get through the lame duck session. you move that into january or february, you are going to have a lot of determined new members

who want to take a meat ax to spending. and the idea that you keep last year's level going for a substantial period of time is not something that we are looking for. that's one to place for a potential shutdown or disruption. it might be a short one. it might not. the debt limit, the ceiling will get reached sometime around march or april. we have new members coming in that they simply did not vote to increase the debt limit. the only way they will vote to increase is if we've already radically cut the size of government. that's what precipitated the shutdown at end of 1995. and it might come much earlier. then we get the issue of health care. it's not the dominant issue. dean is right. i think we all agree on that. as they attempt to use the appropriations process to limit the funding, limit the spending for implementation of different elements of the plan.

: of hhs and other agencies. and as obama managed to shut down so people want are the ones that get disrupted it could have some material interesting politics in play. a lot of people who don't want a

shutdown may be forced through things beyond their own individual control or because they can't control their own members and to actually happening. >> good observations. a gentleman here would like to ask a question and she has the microphone. i'm sorry. >> this is lucia with the washington post. some of you mentioned earlier the commission's proposal, which was released on wednesday which called for a long other things, capping the growth and federal health spending. could any of you speak on how this proposal might affect future healthcare? [laughter] >> this is norm ornstein. it's hard to the courts of the commission's proposal is the co-chair, the chairman's mark right now which in part may reflect the fact they don't have 14 votes at this point for anything and of course it would

be a minor or even a major miracle if they ever did get 14 votes out of the 18 members of the commission who really do span the entire political spectrum there were a few things about it that were striking. one is an attempt to put a cap as a percentage of gdp on spending and health is included within it. the other is it basically accept the health care plan and moves to make adjustments from within that and that is one of the main reasons that some of the republican conservatives members of the commission and people outside have been critical of. within that it also tries to take some of the provisions that are in the bill designed to bend the cost curve and tighten them up and make them more firm, and, you know, from that perspective i would view it as a very constructive approach. it takes some things that perhaps weren't as tough in the bill as they could have been and made them tougher. there will be a lot of people who don't like the approach to

health care who don't like the idea that you start by accepting that status quo. >> didn't i see somewhere in there there was a public option -- [inaudible] >> but i think that norm is right about the effect that it probably pulled me get out of the commission. but i think the one thing to kind of keep an eye on is just because it doesn't get a super majority vote doesn't mean these ideas are dead forever. if we look at the medicare commission that came out of the 97th balanced budget act and some of the proposals including the drug benefit and some of the competitive elements with medicare raising the part b premium and other things were things that live on, and a number of legislators who participated in that became interested in those ideas. here it's hard for me to see this hanging together, and i think as norm pointed out, one

of the fundamental to walls from a number of republican standpoint is that it does sort of deal with some of these other things like speeding up or putting more teeth in that doesn't deal with things like should we be, you know, expanding medicaid to 133% of poverty and tacking on a trillion dollars of subsidies to a new health care spending at a time of fiscal concern. i think there will be an issue and on the democratic side we saw jan schakowsky and others come out in opposition on the entire plan, and durbin. so will be interesting to see if the floor ideas of caps and on a macrolevel continue to be part of the debate. >> i would like to add on. one as you can on deal with a deficit without dealing with health care long term. health care is the problem long term. and the sooner we get serious about it, the better. the affordable care act made

some important steps but it is by no means the whole answer. so why do give the co-chairs some credit for at least not ducking on the issue. however, i do object to the specific proposals, particularly the ones that would cost shift more on to the beneficiaries because that doesn't do anything but lower the burden of health care and the economy from taxpayers on to sick people which is really regressive and not the way to keep health care affordable for people going forward. in fact it's just the opposite of the intent behind the affordable care act. so i think while they should get credit for being willing to take on health care, i really think they made a misstep in how they recommended doing it. >> we've got this gentleman and

somebody over here, too. yes, go ahead. >> hi, i'm david -- and david vandenberg from tax analysis and wanted to follow-up on something you quickly discussed earlier and that is the 1099 filing requirement. the president has indicated a willingness to revisit it. do you anticipate anything being done about this in the lame duck or the 112th and -- talk about that. >> that's a gonner, but the interesting question that remains is how do you replace the revenue. and i think the preference -- it's not clear how much they are going to be able to do in the lame duck. they are already talking about narrowing the focus. there are some big issues that have to come up because harry reid promised during his campaign to bring up the dream act, for example, and there are other things close to the finish line where there's actually been broad support, the food safety

act for example, maybe the disclosed act as well. they would like to do this now actually. they would like to get something that is widely viewed as noxious of the table but they've got to find another funding source for it, and i haven't heard much on the front. okay? yes. >> hi, doug trap with american medical news. this might be a good closing question. republicans played the role of the minority much of the last congress. can they still do that in the next elections or do they have to actually produce some results to justify, you know, having more numbers in 2012? >> well, norm, actually we have a couple of models here that are going to be interesting ones to see which one actually prevails. one is the 1995, 1996 model and that's the model where republicans started having swept

back into power in the first house in 40 years. new gingrich viewed himself at the beginning as a parallel or even replacement president. we saw a year of confrontation of acrimony that culminated in the shutdown and loebsack and then basically a year of harmony and cooperation, where newt persuaded his colleagues that their primary goal was to get a second consecutive term in the majority in the house, and if that meant working with the president and making things better for him, so be it. and they both won. now, you could imagine another model, and that other model is one which is basically 2008. democrats took back the majority in congress in 2006. we had a couple of years where not much happened. it was the democrats who pushed proposals out there. the president -- they were either filibustered in the senate by republicans or vetoed

by the president. but the unhappiness over a lack of significant action continued to focus on the president, and was the president's party, despite the fact the other party had congress, that suffered massively in the election. i don't know how this works out. my guess is that we may find a third model developing. it may be one where voters say for the fourth time in a row to call the ins and throw them out and throw the louts in it. it could well be one where the president basically is able to portray the republican party in a split congress and the cheers the third model, 1948, where harry truman after republicans won 55 seats in the house taking a majority in 1956 portrayed them as they do nothing congress, he won the election and they lost 75 seats.

which of the three models prevails i don't know. and some of it will depend on what happens in the economy. some of what will happen to the could depend on the leadership and whether obama can send of his own left because what characterize his one-term president is they are challenged from the base in the primaries and they are weakened in that sense. it is very much an open question, and as to whether republican leaders can fend off the rottweilers who are on the right is going to be another challenge. >> i would just add -- i would just add that i think we will see a number of things, a number of proposals that will come from the house. and this is one of the reasons that i began with the importance of how you read the election

mandates messages, what ever you want to call them, and i think one of the clear lessons that came through a limited spending, limited government and the advantages for republicans in the tea party being so aggressive and animated and the candidates really running within the republican party wasn't helped sharpen the focus of the message, and i think that's part of the message that will come out and you see these proposals that were already said they are going to vote once a week on something to turn the size of government. i agree with norm and john there is going to be a balancing act as there is with any leadership and there was in the democratic leadership when you have a majority it means you have a diverse caucus and they have to deal with the fact, but i think as long as they are responsive to will be interesting to see whether some of those proposals get blocked by a democratic senator get vetoed by the president come and the one thing i would say is that as much as that has to do with how the

president either forces the issue or overreacts and at least from what i've seen the last couple of years i think this president is a very different president than either president clinton, and while i wasn't around in the truman administration, president truman. it will be interesting to see how he reacts on this lesson and as much as going to depend on how he is able to shape the issues and i think republicans will try to force legislation using the house when they do have a majority to try to put forward things they view as responsive to the electorate. >> just one footnotes here. every elected official is going to be judged on one thing in two years, and that's whether they help to get the economy back and helped people get jobs back. and if that doesn't go well, i don't think any of the rest of it really matters. so i think that let's get real here. health care is not going to be the main reason people are elected or not the next time

around. it's going to be about the economy and it's going to matter a lot who looks like they've been constructive and who have not. >> although i will say just to add a think it is worth remembering that the two parties have a very different definition even on java's of what their response as, and so why don't think what we will see this time around is republicans agreeing that the way to, quote on quote come get the country moving again or create jobs is by spending a lot more government money to do that in the form of stimulus or other things. and so i think they will have a set of proposals, but they will look very different from what the democratic congress has done and have to do with things like lower taxes and so whether there is any room to meet in the middle on those will be an open question. >> just one rosy scenario on that front. i could actually see an agreement on the stimulus package that would cut across the lines. and the agreement that i would

imagine is one where we sit and infrastructure bank, a public-private partnership that's already got broad bipartisan support. it's the only way you're going to get an infrastructure the business community really wants investment in this area. and couple of with a payroll tax holiday and you could actually get broad bipartisan support for something that might or might not work, but that would not just have dramatically contrasted views of how you deal with the economy. whether any of that works in an economy i suspect is going to continue to move slowly just because that is what happens when the economy is go down with a financial crisis it doesn't create the kind of recovery and job growth that you have as a traditional recession is anybody's yes. >> okay. we have time for one more quick question. >> can't hoover, american city business journal. i have a question on the 2012 election as well, going back to

what you all were sitting in the beginning. let's assume the president obama loses the reelection as the republican president and let's assume republicans control both the house and the senate, and then let's also assume in the meantime health care reform has proceeded according to plan. what would then have been in 2013? would there be a full-scale repeal? what they will back what has already been done or how will that play out under that political dynamic? >> how's your vision around the corner? [laughter] >> two reef reena, what with president obama do -- what would president romeny do? >> with republicans in control things -- >> secretaries hhs rosen. >> or somebody qualified. >> but i think that, you know, two years is a long time, but i

think the depth of the concerns and opposition to the current health reform always hard to overstate within the party. just look what all the candidates campaigned on and with the leadership is saying and they are relatively in sync. so i would suspect that there would be attempt to scale back, you know, outright repeal and scale back major portions. again, i would remind folks that doesn't mazzoleni for republicans that there is no health reform, that there is no subsidy, there's no insurance reform. the would be the case the president would try to make. but i think, again, if you look at the proposals they have been across the state lines, medical liable because some of the other things. you can keep those ideas and whether they were and whether they are popular or not popular but they have a set of ideas and my sense is they would try to replace those ideas with ones that are now on the table. i think that the challenge that

they would have politically if they are in the majority and this is -- i don't think we know how the issue makes the comics will change over time is at least right now you have this resounding message about spending, and i think, therefore, it makes it easier to portray a significant medicaid expansion, for example, at a time states are already under enormous fiscal pressure as something if he were to repeal the expansion were scaled back that expansion is something that could be done in the name of, you know, fiscal relief of the states or something that could be done to address the deficit, but the with the message challenge and a substantive challenge, and there would still be great need obviously to people who don't have coverage who need subsidies of lower-income and so what is the alternative it then becomes important. the repeal part in some ways is easy. it's been replaced part that

becomes a challenge. but i would end where you began, which is that i would take the republicans at least at their word and while two years as a long time, i suspect that they would continue the effort to repeal it and replace it with something else. >> let me take a crack at that. number one, we already see that issue playing on the republican side with a number of punitive candidates tripping into mitt romney for the massachusetts plan. and we have an overly what i would u.s. of course the great irony because i view the affordable care act as basically an amalgam of romney care and the durenberger, grassley, dole, chafffey to the clinton plan of '93, '94. this isn't a moderate republican plan or what used to be with a group of people who are now an endangered -- under the endangered species act i suspect. but it will play out through the

primaries. what we also know is in the process of going after the democrats' plan or obama's plan, and we are seeing now we've had republicans move into a position of not only defending every dime of medicare spending into perpetuity but also defending the employers and the coverage that they are now providing to people. where the plan that john mccain put at the table, which is has been the core conservative republican plan knocks the pins out from under employer provided coverage by turning that tax deduction into a voucher and then letting people go out and buy insurance. it's moving away from the employer provide system. there's a lot of good substantive reasons to want to do that, but i think what you're going to find as republicans in the process of trying to block or discredit the obama plan have boxed themselves into a corner

in terms of what alternatives they can pursue without creating a very significant blow back probably the most efficient way you can do things and if you notice the simpson plan deals with taxes by broadening the base dramatically and removing that tax break dramatically lowering of rates so that's out on the table is probably a good thing to do. i think a lot of people would save a step back objectively and work creating a new health care system you wouldn't run it through employers who have no expertise or interest in the intermediaries but when you are out there singing with the clinton -- lt obama plan is going to do is remove the precious wonderful protection how do you move back to that or segue into that quickly so you find some struggle with the beginning of the republican will of a threat to figure out what approach they would take. do they go laughter what they really want to do which contradicts what they've been

saying the last couple of years, or do they go with some incremental change is the kind of things we are seeing out there now, a lot of veterans across state lines provide a few subsidies and vouchers here and there it's not an easy place to be. >> we are going to convene these three gentlemen to and a half years from now to follow up on this conversation and find out which direction the rosy scenario have either direction might take. but we just thank you all for being here and think those of you watching and listening around the country. a special thanks to our colleague at the johnson foundation for making it all possible and i'd ask you to join me in thanking our panelists for insightful and mind stretching look at the future of the health care reform plan in the 112 congress. [applause]

[inaudible conversations]

karen pollitz heads the health and human services' office of consumer support. one of the new entities created to implement provisions of the health care law assigned by president obama last spring. the office is tasked with helping consumers understand their insurance options including creating a website to help consumers compare plans. she talked about the work of that new office and other consumer issues during remarks at the press club in washington, d.c.. this hourlong event is hosted by

the journal health affairs. good morning and welcome. i am susan dentzer editor-in-chief of "health affairs" and we are delighted you are with us this morning as we speak and hold a conversation with speed pollitz.we're delighe karen is currently serving as ch the director of the office of consumer support and deputy director in the office of consumer information and insurance oversight at thedirecr department of health and humane services. joined the department she was research professor of the georgetown university health policy institute and directedgen research on health insurance reform issues as consumers and

patience. her areas of focus for directed regulation of private healthorm insurance plans and markets her areas of focus were regulation to private health insurance plans and markets, managed care consumer protections and access to affordable health insurance. she was also an adjunct professor in georgetown's graduate public policy school. before she joined that faculty she was deputy assistant secretary for health legislation at the department of health and human services from 1993 to 1997 and was the secretary's legislative liaison on all federal health care issues including then national health care reform medicare, medicaid and u.s. public health agencies and programs. before that she worked as health policy adviser to several members as congress, including as legislative assistant to senator john d. rockefeller of west virginia and congressman sander levin of gn begun. she was member of advisory board of the california health

benefits review program, served on board of directors from the maryland health insurance plan from 2004 to 2006 an was a member of the institute after medicine committee on cancer survivorship. she's also been on the standards committee of quality assurance and occasionally volunteers for the american chanancer society' reach to recovery program. karen, thank you for being with us this morning. >> thank you, susan. good morning, everyone. i'm just going to sit down if that's all right. i have to say, after, i don't know, a dozen years trying to get into health affairs and occasionally getting published, it's really quite lovely to be here this morning. thank you for inviting me. so i wanted to spend a little time this morning telling you what i'm up to these days at the department. i am back. don't have as nice an office. we are no longer to enact health reform, we're working to implement health reform. there is a new entity at hhs

called the office of consumer information and insurance oversight. so a big part of implementation is developing really brand new capacity at the federal government level, relative to private health insurance. and this office is the one that is to implement all of the provisions that relate to private health insurance. so the new market rules, the exchanges, the new federal high risk pool program called the pre-existing condition insurance program. we're in four divisions. we are recruiting some pretty impressive talent, if i do say so myself. our director, jay angoff, is himself, a former insurance commissioner from state of missouri. two of our division directors, joel ario, who heads up the exchange division, is a former commissioner from states of pennsylvania and oregon. steve larson, who heads up the oversight division, is form eer

maryland commissioner. richard popper, my colleague, heads up the insurance division program which includes the early retiree insurance program and new pre-existing condition insurance program. he had been the executive director of the maryland high risk pool. very expert in that area. and we've recruited other folks out of states. insurance department offices, attorney general offices, we have folks from the industry. so we're really building up i think some very impressive talent and expertise related to changing, understanding private health insurance and changing the way it works. and implementing all of those rules. i head up the office of consumer support, eni wanted to tell you a little bit about what we do in my division. we have sort of two basic areas. one is to promote transparency in private health insurance coverage, and the other is to provide direct consumer

services. the transparency agenda is a big one. i'm pleased that our agency, the office of consumer information and insurance oversight gives consumer information top bi billing. transparency is the secret to us to implementation to really making it work. the affordable care act ultimately envisions a new kind of health insurance coverage, now kinds of more organized insurance markets and new kind of competition. from private health plans, where they compete on the basis of efficiency and customer service, and not on the basis of cherry picking and risk selection and cooiding and that vision for the future, which isn't too far off, is still not where we are today. so we have a long way to go to get there, and as i said, i think transparency is making more transparency is a key ingredient. anybody who's tried to read your own health insurance policy today knows that these documents

are pretty inscrutable, if you can get your hands on them. when you're applying for health insurance now that you buy on your own you can't get the policy in most states until you've purchased it. you can only get a brochure. you don't get to see the fine print until later after you've si signed on the dolted line. policies are written in jargon, they're nonstandard. health insurance is not a commodity like rice. you know, when you buy rice, it's rice and you can compare prices, but it may be a little bit different, but it's still rice and you know what you're going to get on the dinner table at the end of the day. health insurance isn't like that, and lots of don't even fully understand what it is that they're getting when they buy coverage until they use it, until they get sick or hurt, then that's a heck of a time to be finding out you didn't buy what you thought you were going to get. price shopping for health insurance, which is going to be part of market competition, driving efficiency, assumes people will be able to

distinguish between like and unlike products and compare prices in a meaningful way. you can't do that today. price shopping is a perilous thing to do today. so -- and people get caught offguard. so we need to fix that. by 2014 there will be more market rules. policies will be more standardized. there will be standards for essential benefits that all qualified policies need to cover. they'll be subsidized which will take some of the pain out of paying for the cost of coverage and make it more affordable for everybody regardless of their income. and the marketplaces will be more organized and so, again, all of that requires that we just make more information about policies available to people and that process starts now. so we've got two main initiatives in the division of consumer support that we're working on. one is our new website

healthcare.gov. has anybody seen it? come on, more hands than that. all right. so this was launched on july 1st, as required by the affordable care act. it provides a lot of information about health reform. the key component is the insurance finder. click on the blue button in the left hand corner of the screen that says "find insurance now" and that will show you the major medical policies for sale in the individual and small group market. no big deal, right? well, that was the first big deal. just cataloging what's for sale in the individual and the small-group market was a challenge. and it was a tremendous amount of work. we -- we asked states to help us, provide us with a list of who was licensed to sell coverage and what they were licensed to sell. many of them could do that, but some of them couldn't do that. because this is pretty

impenetrable market even at the state level where it's regulated. some of them said, well, i can show you licensed insurers but not the ones that sell coverage. just sort of a reminder that resources, i think, at every level, at the state level, certainly, have been limited and that there's been a lot of focus on solvency. that that has been the primary focus at the state level. if you have limited resources and keep an eye on everything going on in the insurance markets you want to make sure the claims are solvent and can play claims. when you look at data, life and health, or accident and health gets lumped together. finding all of these plans and gets them up theting them up th. they don't all register with the neic. we had to figure out a new

identification system that included their numbers but also their taxpayer i.d. numbers and how can we distinguish this plan from this plan from this plan so we have a list? we want to see what's out there. that's been a tremendous amount of work. the -- we launched in july, just showing you a list of plans that were for sale in the individual market for last month in october. we added some information, more detailed information about the benefits that are covered and also estimates of what they cost. of course, we can't tell you exactly what health insurance policy in the individual market will cost until you go to apply for it because of medical underwriting and the price will vary based on your healstatus a history. we can provide consumers with information about how often plans turn people down because of their history.

we're gradually, gradually adding to this information. we're going to refresh the october launch in, next monday, the 15th, and we're going to just about double the number of plans that we show. we had -- this is a difficult process for the industry, too, as it turns out, to report this information to us. and we're asking them for data and in a specified format that they haven't seen before, and this also happened right as september 23rd was happening and plans were kind of changing and ticking over. so we had reporting issues for october, but i think we're going to catch everybody who didn't show up on the october launch monday. so we should see a lot more individual market plans. then we'll turn to the group market. providing information to small employers is another important part of our agenda. that's a big purchaser of health insurance today. and we are working on figuring out a methodology to provide this same information to small

employers. it's not quite as easy as it sounds. first of all, the rating methodologies in the small group market are incredibly complicated. insurers use a whole lot more rating factors now for small employers than they do for individuals. so you know, including the size of the employer, you know, two employers buying the same policy, if one only has five employees and one has 25, they pay different rates based on fact insurers would prefer not to sell to microgroups. industry, whether or not it's a first-time purchase or whether they're replacing other coverage. there are a lot of different factors and insurers use them in digit ways. we need to figure out a reporting template that captures that and figure out a way for small employers to be able to request the same kinds of pricing estimates that individuals can now request. so when you go to healthcare.gov now you have to input your gender and age and whether you smoke and your zip code where you live. imagine you're a small employer

with 40 employees. you know everybody's birthday? do you know their wives birthdays? how are you going to but this stuff in there ? we're trying to figure out a way the small employer can get the same information without having to go through and do this entire census which is a barrier to the information. we're working on that. we want to have this similar kind of information for small employers up in 22011. we're working really hard on that. some of you have asked me, phil was talking about this before, there's a lot of interest of the data that is on healthcare.gov. you can rank plans, for example, by enrollment, the most to the least popular plan in a zip code, but you can't see the enrollment numbers. some folks are interested to see that. a lot of folks are interested to see that. you should be interested to see that. i can see that. it's really interesting.

so we're also working on a regulation to create public use files so we can just put these data out there and everybody can see them, analyze them, staudy them, write about them. i think that's important, too. transparency is all about transparency. everybody should look and apply their own smarts to what it is we have and understanding how the market works. >> just a quick question? >> yes? >> why is that information not available now? >> we have a publish a regulation engo through a whole analysis of the data and make sure it can be released to the public. there's a required analysis before you release data that is reported to the government that we have go through. so, we're in the government, we have rules. we're working on it. we're definitely working on it. it's a priority and i really want that out there as quickly as we can. so, and then we'll be adding to this over time. so the law requires, as i

mentioned, more standardization of coverage eventually but leading up to 2014 the law requires that we establish just some standard definitions of insurance terms. dedoub deductible doesn't always mean deductible if you look at a policy and that makes it hard for consumers. we've been working with a working group of stakeholders which has been trafferrific, meg two, three hours a week on these massive conference calls to develop their recommendations on uniform definitions of insurance terms and doesn't mean insurers have to, you know, change their policies right now, they just have to, you know, they have to use -- they have to -- when they use the words where we lay out, day have to me they have to mean what they say. so that consumers can begin to have some sign posts they can rely on. then also developing uniform summary of benefits. again, sounds like no big deal,

it's a big deal. so you know, just kind of playing out some basics about what's covered and what isn't covered and how it's limited and doing that in terminology that consumers can understand. the experts tell us we should write this at a fifth grade reading level. you really can't do that. a fifth grade reading level limits the amount of syllables you can use and these are big words. we're really trying to work through all of this and, again, make this information as meaningful to consumers as possible. the other thing we need to develop is something called coverage facts, which is kind of a dareivation of the nutritional facts label on the cereal box. any kind of food that sort of lays out in a serving of this food, you know, this is your minimum daily requirement of vitamin-c and fiber and here's how much of that this serving will give to you. we need to develop those for insurance policies.

we need to lay out benchmark sort of treatment scenarios. if you were to get pregnant you might need nine prenatal visits and two days in the hospital and sort of lay that out and say how much of that would this policy cover? so that we can give people some just common benchmarks. you know, your pregnancy might not always be the benchmark but you can take that benchmark and compare the plans against it to begin to see a little more how all of these many, many dimensioned covers benefits and cost sharing rules work together to produce an end result. you know, i need this much care, how much am i going to have to pay out of pocket? so that's one of the things we're doing. on transparency. oh, then one other thing -- that's sort of with the website. then the other thing on deck for 2011 is the development of disclosure regulation. there's a section in the law called 2715-a that gives the secretary broad authority to require disclosure of all kinds

of data from insurance companies. quite apart from what they cover on paper, how it works in practice. how often do you pay claims and how often do you deny them and what are the aren't why? how does your underwriting work? if somebody buys a policy early and makes a claim, what happens with the investigation, when does that result in rescission and when does that result in other kinds of changes? so all of that is on deck too. another big regulation we need to get out. we'll use that to certainly inform oversight, but also to develop other kinds of measures of plan performance for consumers, so again, when they're comparing products, you see two products that look like they're the same and one's a whole lot cheaper, wow, interesting, that one denies your claims way more often than this one. just give people a lot more information about what to expect. so that's kind of the transparency agenda.

adding into that is stuff that is being develop in other parts. steve larcenyson is working on medical loss ratio reg and reg for rate review procedures. people, again, can see more about how insurance works an what they can expect from it. and then our other area in my division is direct consumer services. and we have two kind of main components there. one is a new consumer assistance program, state-based consumer assistance program. we announced the grants a couple of weeks ago in october. and the affordable care act provides funds to create these ombudsmen in states to help people answer their questions about private health insurance, understand what coverage options they have, help them enroll. when a claim is denied these ombudsmen programs are to help you file your appeal and walk you through the process to do

that. they're there to advocate for consumers and really provide hand holding. because insurance is hard. and it's always going to be hard. even when it's all transparent and simpler and more standardized, it's going to be hard. because by definition when you're using it a lot, you're sick. and you're tired. and you just need sometimes some help, you know, somebody just kind of, here, here's all my paper, can you take care of this claim for me? we just announced our first 40 grantees a couple of weeks ago. states, territories, district of columbia. and we've just got the money out. we're providing -- we're in the process now of standing up these programs. a lot of them where a lot of our state grantees were already in the business of consumer assistance in one form or another. we have a number of state insurance departments where their consumer services offices have applied and there are grantees but also state attorney generals offices, health departments, an interesting mix

of state agencies. and about, what, 16, 17 of them are partners with non-profit consumer organizations to kind of move this really out into communities so you don't have to go to some big government office building to find it. we're very excited about that. and again, looping back to transparency, one of the statutory requirements of these grantees is they collect data. so, you know, who's coming in, what kinds of problems are they incurring? how hard are they to fix? you know, when you file an appeal, how often to you win and how often not? and they're supposed to report this information back to us. in aggregate form to strengthen oversight. so that's important. when insurance doesn't work it's, you know, it's going to be most important to see, well, when it doesn't work for the people making the biggest claims who are the sickest and that can be a really hard thing to fair

it out in broad data reporting. this is an indication of how insurance is working on the ground and hopefully a way to leverage. if one problem comes in and data on that gets reported back you can get to the root level of the problem and not solve it every time people keep showing up with the same problem time and again. so we're working on this consumer assistance program. very excited about this. then the last area we're working on in my office is appeal s. there are new appeal rights under the affordable care act. internal appeals to your plans. when a claim is denied. how quickly they need to process that and how that needs to work. then a right to external appeal. which many states have had external appeal laws. you've probably read some of my reports about them if you followed my work at george foun. now all states will have external appeal laws that meet a minimum threshold for consumer

protections and when they don't the secretary is required to establish a federal system that will be a place where people can take their disputes with their health plans to an objective third party and get them resolved. we put that reg out in july, and it took effect in september. we, understanding that most state legislatures were out by then, we gave them until next july to conform their existing laws where they had them, you know, to make the changes they need to bring them up to the federal standards. we sort of left the kpiexisting laws be for a little bit. the federal system kicks in immediately for states that didn't, states and territories that didn't have laws. we had a quick put together. not a problem. we kind of called up our budties at opm and said can we temporarily rent space on your appeals program you use for federal employees and make it

available in these states that don't have a system while we go through the procurement? which is a little detailed. we'll have our permanent process in place next summer when the states are ready to go and meanwhile we've got this. a little duct tape and prayer and we're getting stuff done as quickly as we can. and, again, we think the provision of direct consumer services is also fundamentally important. people just need help and the appeals i think is a critical one. at the end of the day when you paid your money for insurance you want to make sure it actually covers the care that is supposed to be covered and so that's what we're doing. so i don't know, i guess i'll pause there and -- >> great. thanks, karen. let me start by asking you, you probably knew more about private health insurance than almost anybody on the planet. because of your work at georgetown. you also had direct personal experience as a patient navigating complexities of

policies. what's been the biggest surprise to you coming into this office, having access to data that apparently has never been aggregated before in the united states? you suggested earlier that the enrollment numbers were going to prove interesting once people saw them. so i gather there's some very interesting patterns now in terms of market share. from state to state. what else has really been the big eye opener for you in. >> actually, i'm not sure we've really gone the depths yet. we're still getting basic information. our data shows markets are highly concentrated. we kind of now that before. now i can see how concentrated they are. it will help as we sort of move forward and there are questions about, is this change going to destabilize or that change? we can look some of this up now and see, wow, that's destabilizing your market share, you only cover 150 people. so you know, that i think, just getting it i think has been the

interesting part for me. the denial data, there's been a lot of interest in the denial and uprate data. one of the things i guess that's been fun for me is how difficult it is to capture this, that we really do need to think carefully about creating measures. we thought we created kind of a careful measure. some of the carriers have come back and said, well, i know, i went through your training but that's not how i reported it so we think we probably still have bugs in that. i know there's a lot of interest in, can i please see the underlying date a? we'd like to clean that up. the industry has been good at reporting this information and reporting back to us, well, this is how we did it, we want to make sure we're doing this correctly. so i guess maybe the biggest surprise has been how much thought you have to put into how you define these date to elements and how you make sure that they're getting reported consistently. it's -- and some of this i think

will be easier in 2014, but it's very, very difficult to create a standardized anything for the current insurance market. it is just -- it defies standardizing. so there are going to be a lot of exceptions. one of the things, actually, that we've encountered with a couple of carriers when we started getting the pricing data, i didn't realize this, but there are some carriers that don't really sell policies. they sell pieces of policies. and you can really just completely mix and match it. it's almost like, you know, how many parts of the jigsaw puzzle would you like to buy? and rice . >> i said, gee, i don't know. we said we had a threshold when you report to us all the policies that represent 1% of your market share in a zip code. we said, well, look at your books and figure out what are your combination and report us the prices for all of those combinations, so, there are some

kind of interesting practices out there that aren't necessarily good for consumers. >> well, just to follow-up, i was intrigued when you said sometimes a deductible isn't always a deductible. what else could it be? >> well, you know, you tend -- i tend to think i have a policy with a $1,000 deductible and it pays 80/20. that's a standard framework, but not so much. some have specifics to certain services covered. we saw an out of pocket limit is another, and you pay 80/20 to some limit, and then the plan kicks into 100%, but that's not how it goes. certain things don't couldn't against is deductible or certain things don't start totally against the out of pocket limit unless you reached another limit somewhere else in the policy. there's features that don't show up on a basic summary right now,

and we just need to -- until they go away, we need to put some orange traffic hazard cones around them. when you see the icons that warns people that something is important, it's a little orange traffic cone. we do need to warn people this is slippery when wet and just warn people. >> now we can all feel better we're not bizarre because we have no idea what our insurance policies say when we get the explanation of benefits. let's open it up to questions for karen and just introduce yourself. that would be great. we'll start with bob. >> hi, i wondered if the site will have the capability to select among different types of insurance. he's a hypothetical. someone just getted laid off from work, and the spouse finds out that he or she the nonworking spouse has diabetes

or cancer. how do you know should i take cobra, go to the individual market, or right to the high-risk pool in my state? how would one navigate to answer those questions? >> well, actually in the finder, we've tried to walk you through all of those options. the finder just doesn't show the private insurance policies. there's a question about i've recently lost coverage through work, and it kicks up a screen of options for you that a somewhat tailored depending on the information you entered. if someone lost their job and coverage, it tells you about cobra and it tells you how it works and what it costs and the fact it takes you and gives you the same benefits and it will also -- it will have asked you by the time you got to that point, you know, if you have a spouse who

works because you may, if that spouse's employer offers coverage, you have by law, special enrollment opportunities to go into your spouse's plan. you don't have to wait into the next open season. that's always been the rule. it walks you through the individual market, but sends up a traffic cone saying if you have a health condition, you might not get into this, and if there's a high-risk pool, it tells you about that and the new preexisting condition program, but that's hard to get in to because you have to be uninsured for six months. it walks through those things and eligibility levels and all the different options for you. it's understandable way, we've figured out how to do it, and it is somewhat tailored. >> marilyn, i'm sorry --

[inaudible] this might sound like a dumb question. >> no dumb question. >> the work you are doing now, the comparative information, the website, the transparency, this -- i can see what this does to help until 2014. how is this -- can this information then be used post-2014 once we have the exchanges in place? first of all, what happens to your organization and your mission and what happens with this -- >> we keep -- >> what happens to the platform you're building? >> this all continues. this is really building what we'll need in 2014. it's certainly helpful for people now so that they can at least see a little bit about the differences in the marketplace, but it's not like we're going to one size fits all in 2014. there's still going to be plan options that people have. they will vary.

the coverage fact analysis we did is based on work we did at georgetown and applied that to massachusetts plans and found interesting differences, you know, like three different bronze plans leaves you with variable out of pocket results based on the plans that were not well-standardized. >> do you envision this comparative information will be available to the various state exchanges? >> yes. i mean, this is national data collection. yes, so we'll just keep collecting this, you know, the exchanges can use it. i don't think we need to collect it 50 different times. exchanges may collect additional information. you know, we're going to be this federalist system, but no, this is national reporting authority. it's ongoing and doesn't stop in 2014. it just keeps going. we're going to have sort of one layer of basic information that you'll always have about plans,

and it's not just for insurance policies to the exchanges. these apply to group health plans as well. if you get coverage through work and you're thinking about leaving, you can compare what you have to where you might go, so, i think that's fundamentally important. >> just a quick question. is all of this then potentially for a national exchange assuming there may be states who decide not to set up exchanges? >> yeah, i mean, i think this is just plain useful. it doesn't really matter the way the markets are organized and who is in own who is out. this is consistent information that should be available to everybody. >> there's a question right here. >> hey, thanks. deborah cox u.s. world institute report. hi, i was curious you brought up massachusetts, and i was curious how you used massachusetts and

california as models to try to develop standardization of terms. haven't these states done legwork for you or are you finding there's some things in these states, statewide insurance plans, that have shortcomings you need to deal with now >> >> our working group includes a number of state regulators. we have had really remarkable input from consumer, patients, state regulators, a number of insurance companies that participate in the working group, and a carrier in massachusetts. you know, # -- this is pretty basic. this is hard. i'm going to complain a little bit. this is hard. there's a reason why we're start k this now. i think the congress was wise to start this now and not wait to throw it together in 2014. this will evolve and get more intense once we start developing the essential benefits.

deductible doesn't mean deductible, but dme won't always mean dme. we'll have to delve into this more with explanation of benefits. i don't know, we're doing it. >> let's take a question along the back. looks like julie rocialts. >> thanks, julie from npr. i know we heard about the republican governors and republican state legislatures who are not ennamerred of this law. can you talk about the role that the states will play in sort of your, you know, we know about the exchanges, but what role do the states play in the consumer effort, and what do you anticipate happens if we have 30 states who don't want to play in the particular sand box, and then what would you have to do? >> well, i mean, the consumer program is one that doesn't have a federal fallback, so -- and we have 40 guarantees, not

50. there's republican governors, democratic governors -- i like to think that at least on the consumer assistance stuff that that's not really a partisan issue, that everybody kind of understands that you could use a handout when you get sick and you have problems with your health insurance, so i mean, so far that has not been an issue, and i mean, it just hasn't been an issue. >> have the states been so far participating or -- >> i think pretty much, minnesota didn't really participate in anything -- >> minnesota did not? >> no. >> he said he wasn't goirng to participate in that. >> yeah. we've had some of that, but mostly they have been stepping up. i think the granting of federal resources to states has really been powerful. states are really broke, a lot of them. they just don't have a lot of money, and you know, if you offer a million there and here, pretty soon they're like, yeah,

we could really use that. you know, i think for the most part the states have been a pretty good partner, and we've tried to be a good partner back. on the transparency in the data collection, we're working with insurance commissioners, bipartisan insurance commissioners to not just a partisan issue. their big thing to us is it's important that we just collect this once. we don't need to collect all the data and build it in, but we said we'd take care of that. i think, you know, there's been some good synergy with the government and states stepping up. you know, it's not perfect, but it's pretty good. >> yet you got, you said, at least 10 states that didn't apply? >> 10 didn't, and some of them, you know, it wasn't always a partisan thing. we've just been doing this lickety-split, really, i'm

tired. we have been shoving through a lot of this stuff. applying for federal grants is not easy. some states are still on a learning curve on that, and in a couple states we hit some funky fiscal year timing issues so you know, it's just mostly tremendous interest and they wanted to play, and now we're going forward. >> right here, make sure i'm not missing anybody. >> hi, drew with bloomberg news. it sounds like the changes you have in place altder the way insurers can deal. what is your vision for insurers competing and on what basis more so on comparison to how they did compete? >> well, i think competing on the basis of consumer service is a really important issue, and i

worry -- i haven't seen this data, so i don't want to be too cynical and dark in my vision, but i worry there's an incentive now for insurers to pick on the consumers who generate the biggest claims because if you make them want to go elsewhere, then that's a good thing, and you can keep your premiums low for the healthy consumers by getting rid of the sick ones #. the whole point of the insurance is get the healthy ones to come in to pay the claims of the sick ones. i think focusing on how the security of coverage is for people particularly when they are sick is going to be, i mean, that's just going to be a new dimension that you can't really see now in health insurance. i think that also helps consumers. i think the whole concept of insurance is really complicated. you know, you are buying protection. i can't tell you how many people, and people in my own

family who said, oh, man, i paid so much for insurance, and i didn't make a claim this year. no, it's good if you didn't make a claim this year. it means you didn't get hit by a car or find a lump. that's a good thing. you have it there if you need it. that's a good concept. measuring how insurance works for people when they are sick remind them you don't buy this because you're healthy, but this is a scary occurrence that you're buying protection from. i hope it kind of makes us all a little bit smarter about what we expect from insurance and make insuranc -- insurers more accountable to that. >> good morning, it's matt dobias at "national journal". i have to ask the question, as you move forward, does the thought creep this all e might be for not? we've seen the results for the

midterm elections projecting to the 2012. you know, if there's a successful effort to repeal and replace, what then? >> well, i'm not going to worry about that today. you know, the president is committed to moving forward, and i sure have a lot of work to do, so i'm staying focused on doing this. i think it will help, keep us focused on what this is all about, and the president is committed to moving forward and it would take a heck of a vote to override a veto. >> has there been talk in the people in the officer? is it a conversation topic? >> no, i mean, you know, the partisans were not happy about the election, but no, we are seriously busy. we are keeping our nose on the grindstone, getting our work done. we have a lot of work to do, and, you know, a short time to get it done, so we're --

it's actually not that hard to stay focused on what's right in front of us. it's pretty much blotting out the rest of our field of vision. >> let me ask you quickly, karen. the national association of insurance commissioners is developing model legislation for other insurances that now have to be come into syic with federal law. is there a model, a piece of legislation that might be developed or how are states going to make their laws come into alignment with the federal law with respect to the consumer protection issues? >> well, this is something the naic has long done for states, and in fact the minimum standard for external appeals is the most recently adapted now a couple years ago so the tradition has been that the naic puts together an act and goes to the state

legislature and they don't adopt it word for word and make changes. you know, i think that will continue, but it's an important service and state legislatures are strapped for time too. they meet in short sessions and don't all have professionals to help them. it's useful when the naic gives them a draft. i'm trying to think -- i actually don't know if they're working on models for all examples of preventative services or some of the early that covers up to 26. i actually just don't know the answer to that question, but certainly moving forward in the broader market we forms and -- reforms, i'd expect we'd see naic pony models to give states a shortcut. >> a question in the back, and then back over here. >> i wanted to ask two

questions. one, there are powers in the law that give the exchanges that unfairly raise premium, and obviously we've seen premium increases where they attribute it to the law and i know the administration disagreed with some of those increases. do you have any indication so far that there will be insurers kept out of the premiums and then my second question if i may to follow-up on what susan said about the national exchanges, how much state -- how many states have the possibility of a national exchange and how many indicated they may not run their own exchange, and if so, would you then do a national exchange for them, or would these be individual state-based exchanges? >> a, i'll refer you to my colleague. b, it's early to know though

questions. joel is just now putting out the plan to grant states and where states can really dig in the i.t. issues important to creating a functioning exchange. on the rate increases, actually someone at kyeser just forwarded to me that connecticut was a state that recently there was a flap, and i know some insurers have been saying, oh these big rate increases are due to the affordable care agent and all the new big mandates, and when you actually look at the file's rates, i think it was connecticut, i shouldn't say. i didn't bring it with me, but, you know, they break it down, they are required to break it down now in that state, and a 20% rate increase was .2 percent due the affordable care act. i think there's going to be

arguments awhile, but the whole point is that we can go in and check the actual numbers and see. in terms of how states, you know, how exclusive states will be, i think that's still being worked out, and there's a lot of different models for exchanges, one where everyone can compete as long as you are licensed and another where it's like massachusetts where the exchange accepts bids and tries to take the best of the best to offer within the exchange and doesn't allow all the insurers to participate, and we're just going to have to see how it is that states build that out, and there was provision for the governments to operate in the exchange when states don't. we'll have to work that out too, but i just don't think we've decided that yet. >> questions over here. >> hi, sarah with "politico". two questions about healthcare.gov. do you know how many companies

will be listed on monday? >> it's more than 8,000. >> second, i wanted to follow-up on the discussion of kind of using, creating data files accessible to folks. insurers raise concerns says it's not what we invented this for, it's outside of what we were told it was used for. can you respond to their concerns about how the data they've been submitting for healthcare.gov finds it way -- >> well, we'll do it and they will comment, and i'll comment back. we indicated in the regular that established the portal, we wanted to make the data public, and that is our intent. >> question here? >> hi, phil from kyeser health news. how many people look at this?

when push comes to shove when they survey employers, they buy on one thing only and that's price and employers of all the big employers do that. if we put out data for individuals when sounds great, what's the chances they'll use it and the backgrounds, there's a little pickup of it and in some states it's a good bargain, what does that tells about 2014? >> let me separate those. it's still pretty new. we, you know, launched it on july 1st, but a lot of states didn't start enrolling people until late august or september, and the price varies, and in some states, we had it where the federal government is operating it, we had to make estimates on what the standard rates were, and now that we've been able to look at the healthcare.gov data, you see reduction in premiums, a significant reduction in

premiums along the order of 20%. i'm sorry, the preexisting insurance program. that's a great name. we should have called it anywhere -- nirvana. it's where the federal government is operating. i think it's effective january. it is growing. it's growing faster in other states. i don't actually know -- i'm going to refer you to richard, my colleague, but we do expect, you know, that the curve is going to continue upwards and we'll see enrollment really grow. >> did you say that's the high risk pool? >> yes. >> what's the consumer information to make sure all the data is out there and they'll use it in >> that's part of the trick to healthcare.gov. we're constantly modifying healthcare.gov. we've having a big meeting next week looking at the navigational

things and how to guide people through it, but i think, like i said now when the world is so unstandardized, it's always going to be a super, super challenge. i think the consumer assistance that one-on-one assistance will help with that, and as we measure some of these things and can get a better idea of what's happening out there with this variation and what that's all about, and then we set health plan standards and market standards for 2014, we can make some of it go away, and that will help too. you know, like i said, it's always going to be hard, and so that's why my work is hard, and the state's too, i mean, they are really engaged in this. >> kris, and then back over here. >> hi, chris fleming from "health affairs". as you talked about your work in trying to allow consumers to make more effective choices, opponents of health reform have

argued that we shouldn't put any limits on choices. we shouldn't put a one-size-fits all model in, but allow individualized choice. how as an overall manner, how important to allowing consumers to make effective choices is it to standardize the options out there so that people are preparing like vs. like than creating as much transparency as possible so whatever choices consumers make, they are making an informed choice in >> well, i mean, i think we'll be following the guidelines of the affordable care act on that with some of both. there is some standardization that is required under the affordable care act. certainly for policies in the exchange, the bronze and gold stuff, but the transparency applyings, you know, ever where, in out and of employer plan, and i do expect it will continue to be a challenge for people, but i think it will be a whole lot

better than we are are today. >> is there such a thing as too much choice? are there too many options out there? >> no, i think we have seen certainly in medicare.gov when you give people 50 choices, they shut down. nobody can process all of that. i don't know that people need 50 choices, but people want choices, and they'd like some assurances that hidden among the choices, there's not little grenades going to go off on them. some of this is just to come away -- comb away some of the bad choices or choices that cannot be very secure and guarantee the people within this basket of things to choose from, you'll get at least this much production. that's what we're trying to do. >> yes, over there. >> drew armstrong with bloomberg

again. you mentioned the data you're collected. what extent is that playing in the waiver process and regulation for the medical loss ratio? there's broad authority on avoiding market disruptions there, so how does that factor in, and what are you seeing in terms of the potential market disruption if that regulation goes forward and i'll ask the question everybody wants to ask is when will we see that regulation? >> i'll do the second one. soon. i think we'll get that out by the end of this month, so i would send your other questions to my colleague, steve larson. >> do you want to take the first part? >> i forget. >> oh, in terms of disruption to market at the state level and plan levels, how does that factor into development of regulations and concerns over that in >> steve was the first one to ask for this when he was

running around. shortly after we got there before we launched in july, you know, he said, wow, you know, all these charges about market disruption, where do i get the data data. i said, oh, oh, i have it. he said, really? i think this will be very helpful, and it's helpful at the state level. i just hired a new director for my web portal team from a state insurance department, and it's amazing what a little information does for a regulator. it really goes a long way, so a lot of states with excited too. >> karen, just to wrap up, it's open enrollment season for many americans right now. it's also the time of year as we come to the end of the year people look at insurance policies for next year. you got 15 seconds to give americans the best advice from you about how to approach shopping for insurance this year. >> well, it is especially

important this year to look at your insurance options, particularly if your employer is offering new options because as plans renew, following september 23rd, that's when they pick up a lot of these new protections that just took effect under the affordable care act. it's as your plan renews you have the right to cover your kids up to 26, and plans cover preventative services without cost sharing, and you know, these are important. i would, you know, really take a good look at your insurance options now. if you don't see any of the new protections, you're probably in a grandfathered plan, but -- so they're not required to offer you these new productions, but they are required to tell you they are grandfathered, and if there's a lot of changes in the plan, they lose the grandfathered status.

if they raise your deductible or the premium changes, it can change. now is a really good time to start studying up on your insurance options and see what's available, and like i said before, don't just look at the price. obviously, that is critically important for everybody, but remember you're buying health insurance not in case you stay healthy, but in case you stay sick, and look for the most protection you can afford, and you'll thank yourself later. >> great. karen, thank you very much for being with us. >> thank you very much, appreciate it. [inaudible conversations] [inaudible conversations] >> next on c-span, the supreme

court hears oral argument on a church separation case. then, analysis of last week's congressional elections, and later, question time from the australian parliament.

>> it involves the constitutionality of a 1997 arizona law that givings a tax credit to residents who contribute to school tuition organizations that givings scholarships to students in private and parochial schools. this is an hour. >> in case 090987, christian school tuition organization versus winn. >> may it please the court. it's permit the private citizen the to contribute money to private organizations set up by private individuals and let those organizations use that money towards scholarship when individuals apply for them. the 9th circuit aired first in

finding they had standing and second in striking the program down. on standing this yield three necessary elements, raterring injury in in fact, the key point is this. not a cent of the spots money funds religion. if you placed an electronic tag to track and monitor each cent the plaintiffs pay in tax, not a fraction of a cent goes into any religious school. >> the point is that this tax money does belong to the state, that the private individual is using because it is money that even by the new amendment says either you pay it to the state, or you use it for this purpose, but it's the state's money, and it's giving you the right to redistrict it. that's their argument, so it would be the taxpayer's tax dollars being spent on religion if they sustain their claim. >> there's two problems with

that. one is injurying fact, and the other is redressed ability. our point is as you track the taxpayer's dollars, it doesn't actually fund any religious program unlike the last and other cases in which this court considered taxpayer standing for religion. their complaint is not that the government is spending money that the taxpayers, money extracted and spent of the taxpayers. their complaint is that someone else's money is not being extrablghted and spent enough, and the relevant language says for taxpayer standing to occur, it's his tax money extract the and spent, and here, that's not occurring. with respect to the other arguments without fact, but with causization, our point is this. it's speculative whether or not that chain of events you spelled out would happen. as this court said, for example, when a tax credit is given

sometimes it reduces the amount 6 money the government has to spend. it doesn't increase it, and so that's a difference in the district outlay at issue in -- >> then is it constitutional if we get a new system? here's what the system will be. the taxpayers who are religious will be able to check a box, and the check they send to the ira, it's a possible system, what happens is that that check is cashed by an official and the cash is given to the local priest to say prayers for the individual who contributed the money. in your view, there's no one who could challenge that? >> two things about that. first is that that is not all that different, justice breyer, than what we have today. >> the difference is, of course, in the one case it's a deduction, and in this case, you're paying at 100% with money that would otherwise go into the

coffin. i realize that, but this is a government thing. there's no one who could challenge that? >> i don't think any taxpayer could challenge that. i'm not sure if the government is specifying which religious organizations are eligible for the check bock, but if the government is doing something that's under inclusive and giving tax credits to one organization, that's a texas monthly problem. >> going back into history, it could have been the case that the as long as they were fair to every religion, the first congress could have funded prayers throughout the nation in churches for anyone to go and pray and that would not have violated the establishment, or if it had, nobody could have challenged it. >> no, justice breyer. two things on that. first, we're talking about standing and not merit. wants to standing --

respect to standing, if they funded religious prayer, i think under organizations have standing not as a taxpayer because this court has been very careful to say there's an extremely narrow perception, but other organizations would have texas monthly standing. >> you know, does anyone have standing in your view to challenge this scheme? >> the way this scheme is set up, the answer is no, and i think that cords -- accords with this court in this area. >> if we leave off the fine points that you were discussing, isn't the underlying premise that the establishment's cause would be uninforcible unless we recognize taxpayer standing?

>> i don't see that justice ginsberg. that's a very narrow conception when money is taken out of their pocket and spent by the government on religion, and i don't think that's happening here. >> class is gone? there is no, nothing more because it just happens that nobody had thought of this system at the time of flask? >> i don't think it's gone at all when there's outlays to spend on religion. >> there doesn't need to be because all you have to do to get around it is create what we have here. >> i think that can get around it in some circumstances, and those who were underincluded, but at the end of the day, that's the result for every other clause in the constitution. taxpayer standing is the most narrow of perceptions.

>> there is a plaintiff. we have a bill of rights, and most provisions have plaintiffs who are hurting, free speech is suppressed, but this one doesn't have. it's in the constitution like all the others, and i thought to be candid that that's what the problem was and that's what the court was responding to. ..

court was without authority to decide any of those cases but somehow nobody on the court recognized that fact nor did they recognize that fact, they participated i believe in each of those cases. >> first as i do think it is like all things in which the court had taxpayers standing case after tax payer standing case and then when it was keyed up and presented to the court as a question about article 3 of standing they said no we shouldn't grant in those cases so my answer is yes. i do think that the decision reiterated some of the fundamental principles and the limits and i think the court is the plurality made quite clear they will go no further than the fact and the grand standing here you have to go tremendously to a

direct government outlay of funds taking money out of someone's pocket. >> i just want to make sure i heard your answer. you said the answer is yes, and other words, you agree with but justice kagan's criticisms and said yes, she's right, those cases were wrongly decided. >> the results would have been the same, it just would have been outstanding on the merits. mueller for example upheld the programs. so the bottomline decision would have been the same, but the way in which the court got there there would have been no -- >> but you would have said there would have been no standing in those cases. >> no taxpayer standing. now, there may be other forms of standing, texas monthly standing, that could have been alleged to challenge those

programs, yes. >> but wasn't it -- and don't remember whether the government participated in the case when it came up under the tax injunction act. and there wasn't a word from the government about the lack of standing. >> the first foot motion the brief, justice ginsburg, acknowledged that the fact standing hadn't been pushed or pressed below. but i will acknowledge that, particularly in the week of hein, should another case arise the government will -- will acknowledge the standing defects and brief them as we are here. our point on a reimbursable the is not simply that -- that the cost of the program is speculative. it's also that the relief that the plaintiffs are seeking in this case want redress the problem. that is if you give everything the plaintiffs are asking for, the very same religious schools and the very same religious stos would continue to be funded. the very same religious stos would continue to be funded because they would leave their please -- and this is my answer to justice breyer -- the tax

deduction, the 501c3 tax deduction. so there would still be government revenue being spent in favor of these religious stos under their programs. would just be at the level of one third instead of 100%. i don't think that satisfies their problem. i don't think james madison's rahman strands would be satisfied if you were told you will not be taxed three bins will be taxed 1p. the principle is what matters. >> if i can reserve the balance of my time to read >> thank you, general. >> mr. chief justice, may i please the court. as a tuition tax credits does not violate the establishment clause because it is a natural law that results in scholarship programs of private choice. it's natural because like the tax deduction the court upheld

in mueller it's one of many tax savings devices including some 26 other credits that are available to arizona taxpayers on a neutral basis. >> ms. bickett, could you explain something to me -- i have been puzzling and puzzling over this scheme. can you tell me why arizona adopted this sort of scheme rather than the more typical tuition voucher in other words tuition voucher schemes steep the vulture with a scholarship or what have you this is so much more complicated than complex and unusual and just left me wondering why it was chosen or will the state thinks the advantages of our of it now. >> yes, justice kagan. one of the things that is true in arizona but was not true in ohio is that under the arizona constitution the direct aid to private schools is prohibited. the other thing about the tax

credit program is that it does encourage contribution not only from parents but from the community at large, and this them provides money for low-income students for, students with low-income -- >> does it show the extent to which the nation's people who do not have students? >> could you -- >> does the record show the extent to which there are these additional donations that you just referred to? >> your honor, of course it was at a motion to dismiss phase. but the record shows is that there's some reports that -- studies that have been done that show that there have been some children that have switched from public schools to private schools as a result of the program, that many of the scholarship programs are -- in fact, most of the scholarship programs provide scholarships

based on financial need. >> you haven't -- i don't think you answered his question. the question was, is their anything in the record that shows whether any of the money that's involved here comes not from parents, but rather from others who can contribute to the program? >> well, what the record shows is that there have been -- there is a large amount of contributions. there is $55 million. it doesn't -- we've arizona department of revenue reports that list the number of contributors and who contributes -- or not the individuals who contribute. ausley -- it doesn't specifically to line out who the contributors are, whether they are parents or whether they are not parents. >> well, i suppose if some of the contributions are considerable, like a million dollars, that couldn't be just a

parent, right? >> right. >> are their contributions of that size? >> again, the record doesn't show what the size of the contributions are. it shows the number of contributions and the total amount of contributions. >> you only get -- if you give a million dollars, you still only get a 500-dollar tax credit, right? >> that's correct, your honor. the programs are programs of private choice, because any aid that reaches religious schools does so after only after at least four levels of private decision making. arizona sets up the natural rules for the -- this tax credit, and after that, private individuals and organizations take over. anyone can form a school tuition organization, and the increase

in the number and diversity of school to wishing organizations over the 13 years that the tax credit has been in existence demonstrates in fact that this is free for anyone to participate in. >> something that worried me in zelman is this, and i might get doherty answer. probably arizonas been this summer and billions of dollars on public schools, doesn't it? i don't know the exact amount is. >> yes, your honor. >> let's take 40 or 40% of that and spend it through this program on religious schools. imagine that happens. at that point, people might get into considerable discussion about what qualifies, when it doesn't qualify, whether it is a valid school or is just teaching religion and what the rules and regulations are. how is arizona dealing with this problem by saying there are no regulations by saying that -- is there a system for dealing with

the legitimacy and the circumstances under which a particular religion schools qualify for this program? who decides and how? >> under the tax credit program, the schools have to be qualified private schools in order to participate in the tax credit. >> that must be a set of regulations and rules. >> criminally what it is, is that private schools in arizona satisfy the compulsory education law as long as the we have the requirement that public schools have in terms of providing qualitatively the subject matter that the public schools -- >> and those standards have nothing to do with this program? the our standards that any private school, religious or otherwise, must meet in order to satisfy the education requirements of arizona? >> that is correct, your honor. >> and when do they teach the religious part of their program? >> excuse me?

>> i mean, when does a private school -- normally the school's -- i mean, i'm not an expert, but what you have to do to be a school is a very complex thing coming and you have all kinds of requirements that each up quite a lot of the day, and i just wonder how the religion part fits in. has there turned out to be no problem? wendi -- to teach religion at 6 o'clock in the morning? does it matter if a person is qualified? how does the -- i once had a case on this in the first circuit and it came out to be surprisingly complex, and i just wondered how -- if they're turned out to be any problem at all in arizona in this case. >> justice breyer, the record doesn't reflect that and i'm not aware of any problem with private schools in arizona and certainly not that have participated in this tax credit program. suppose that an sto -- this is a hypothetical case -- discriminated on the basis of

race. no hispanic or no white or no black can receive our money. suppose there is no federal statute on it, no state statute prohibiting it. would there be a constitutional violation, a federal constitutional violation? >> if it was -- if it was a private institution -- >> it is a sto. >> and so that is a private organization. >> all right. there are no attributes of state action that would suffice to about a discriminated person to bring suit, a person who has been discriminated against? >> as long as there was not a federal law that applied to the organization -- >> the hypothetical is no federal statute, no state statute. it's a state action question is what i'm asking. >> unless the discrimination could be attributed to the state, the state's correction, dan -- >> don't you think a strong argument can be made that it can be attributed to the state?

the state has all sorts of rules about what an sto has to be. the state provides the mechanism through the credit for the funding. >> limits the funding. >> i assume there is a tax deduction for contributions to churches? >> yes, your honor. >> and many churches discriminate on the basis of religion, don't they? >> yes, they do. >> does that pose a constitutional problem, do you think? >> no, your honor. >> what about -- what about the answer to my question? well, your honor, because stos are 501 -- >> you are saying sto is sufficiently private so they can do it. >> the name of it was bob jones. it was a private school and it discriminate on the basis of race, and the question was whether they could have

tax-exempt status of the could bring donations to that. do you remember some of that case? >> yes, your honor. the court held that the department of revenue could preclude the university from having tax-exempt status because the violated public policy and therefore they were not entitled to 501(c)(3) status. and so too here, all of these organizations are 501(c)(3) organizations, so they would not be able to discriminate based on race. >> could i try justice kennedy's question in a slightly different way? i'm assuming that you would agree that if this was just a straight tuition voucher program, the state could not give tuition vouchers on the basis of religion, could not say, if you are a catholic you don't get the tuition vouchers.

but with the state has done here apparently is to set up a scheme that uses intermediaries that can make exactly that distinction, that can say, sorry, if you are a catholic you don't get scholarships out of our sto. and the question is why should the state be able to do that? if the state can't do it is self in providing tuition vouchers, why should the state be able to set up a system using intermediaries that exist for no other reason than to administer this program that can make those distinctions? >> your honor, the state is not making those decisions. it's private organizations. and anyone can set up a school tuition organization. school tuition organizations that support solely secular schools are in existence and there has been no problem sitting goes up. five of the top ten stos to provide scholarships to any school of their parents choosing

-- >> but the plaintiffs contend, the plaintiffs contend and this is a motion to dismiss, so we have to accept their contentions as settled, that there are stos that make these distinctions that clearly would be impermissible if the state administered the program. there are not pre-existing a charitable organizations. there are not preexisting schools. they are entities that are set up solely for the purpose of administering this program, and yet the state is saying it can make distinctions that the state itself cannot. senator harkin if i might correct you, to which an organization that pre-existing the tax credit and certainly the private schools that participated in the most part did exist before the school to which organization. with the program allows private organizations to do it allows

parents to get together with private schools and in for school tuition organizations that than -- >> you said there was a sto before this program. but it didn't get the benefit of the money from taxpayers. that would have gone -- the money went to -- to arizona, not to the sto before this scheme was corrected. fifth for speed limit of gotten a federal tax deduction and state tax deduction instead of a state credit. but the difference is not a significant difference between a tax credit and tax deduction in terms of constitutional body. the difference but the tax deduction is that the value

depends on the brackett of the taxpayer where is the tax credit -- it's equal for all taxpayers that a tax is. and this court has never made a distinction between tax credits on the one hand or tax exemptions on tax deduction. under respondents theory, any money that the government doesn't take in would then be the equivalent of state money and that would then undermine 501(c)(3) corporations and all kinds of charitable organizations. when you need to look at in -- when arizona decided to give a tax credit for this it was thinking this a worthy public purpose to not take in certain money that -- that the state would normally be entitled to if they give contributions to that purpose. so, it's not a question -- and that -- that type of purpose has

been upheld by this court in walz, and hernandez. and there again, there is not a basis for distinguishing here between what arizona is doing and other 501(c)(3) organizations that have for years been able to enjoy the benefits of tax savings, tax benefits, and help give scholarships to religious organizations. >> thank you, counsel mr. bender what. >> thank you, mr. chief justice. and it may please the court i would like to start with

mr. katyal's seat said that if we don't win this case you don't get any relief because the money would go into religious education as it does now. that shows he does not understand our planet. our claim is not that money is going -- that state money is going to religious schools. our claim is that state money is being given to the beneficiaries of a state spending program on the basis of religion. it's a claim about discrimination in the distribution of these state funds. >> but there is a discrimination, i get it. the school that seems to get the most money on the list doesn't appear to be a religious school at all. it's not even discrimination between religion and modern religion. if you think that that is an invalid, which i don't, but it doesn't favor religion at all. >> i didn't say it favored or disfavored religion. that's why --

>> then what's your problem under the establishment clause? >> the problem is that government benefits in a government benefit program cannot constitutionally be given to the beneficiaries of the program on that basis of their religion. if a parent comes to one of these -- >> you can't have a government program that gives out money indiscriminately in certain organizations that say provide hospital services, and it would be unconstitutional live that included organizations that were religious organizations, as well as organizations that were not. the would be unconstitutional? >> let me try to clarify. >> so you must positively disfavor religion? >> no, you must not. u.s. to give the money to the beneficiary is without taking the beneficiaries religion into account. suppose the government set up -- >> how does this take the beneficiaries religion into account when the program works perfectly in exactly the same way if it's a nonreligious school? they don't care whether it's a

religious school or not. >> because the stos are giving out government funds. the stos are on the government's behalf disturbing tax revenues. suppose that -- >> no, no. >> i'm jogging -- i don't think that was -- i hope that wasn't my question. it's how was it discriminating on the basis of religion at the stos, the government money, it doesn't care whether it goes to a religious school or not. it's treated the same? >> the sto, the state doesn't care if it is a religious sto or secular sto. >> that doesn't matter. if the state's grantee cares, that's unconstitutional. islamic it is all that when you have the decision was made by a private entity, with a to use the money to go to a religious school or nonreligious school that that doesn't violate the constitution because the decision is not made by the state, it's made by the private

recipient. >> i believe the court held the office in bowen, where the decision to use the money for their religious purposes was made by the guarantee. not by the government. the government program in bowen was completely religiously neutral. grantees were given funds to educate adolescents and sexuality. the court held -- and chief justice rehnquist wrote the opinion -- that, although the program was on constitutional on its face because -- it wasn't unconstitutional because religious organizations to participate as grantees. it would be unconstitutional of those organizations distributed the benefits of the program on the basis of religion. think about a head start program. suppose the government sets up 50 head start programs in a particular community. they are all run by private organizations, some religious, some not. >> i'm sorry, just to get back to the bowen for a moment. the entities that were distributing the funds could be private or religious?

>> seen as here, yeah. >> the entities and bowen were not identified. the recipients of the state funds were cut as year, they were not identified as religious or not? >> i don't understand. in bowen i think the court held -- indy 500 has applied part of bowen that if the guarantees were to give out their services on the basis of religion, that would violate the establishment clause. >> do we know that the schools here to that? there are some religious schools. do we know that these religious schools do not admit people except on a certain religion? >> well, i think we do know that and the complaint alleges that. but that's not the point. the point is not with the religious schools do. the point is what the stos do. the stos our government grantees. they are disturbing government funds. the constitution prohibits organizations to distribute government funds as part of a government spending program to do it on the basis of religion.

>> that's a great leap to say that its government funds that any money the government doesn't take from me because it gives me a deduction is government money. i mean, that's the first lead you make. >> this is money that the government takes from people. spry this money has never been in the government's core coffers. this government has declined to take this money. >> every tax credit to dollar is a dollar that has to be paid either to the government as income tax is due or to a sto. >> i will give you credit, mr. bender. in your review cities you are wrong on that point that you are told in your tent and sleeping, that there is -- that there is no standing and that there's -- no violation. but i must say, i have some difficulty that any money the government doesn't take from me is still the government's money. [laughter] let me ask you if you reach a certain age you can get -- a

card and go to certain restaurants and to get to 10% credit. i think it would be rather offensive for the cashier to say "and be careful how you spend my money." [laughter] but that's the whole point of your case. >> know it's not. with respect, justice kennedy, the money that's involved in this case is money that is generated by in position of the state's income tax, not by dimond in position of it. if there was no state income tax there would be no tax credit program. >> would you say the same thing about a tax deduction? >> what i say what about a tax deduction? >> that it's the government's money? >> no, i would not -- estimate because they are kind kind enough to give me a tax deduction -- because they are kind enough to give me the taxpayer a deduction for certain contributions? spin it because when a taxpayer makes a charitable deduction, the charitable deduction is made from the taxpayers' money.

at that time the taxpayer makes the deduction the taxpayer can do anything he wants with that money. that's not true of this tax credit. the time the tax credit is taken, the taxpayer owes the government lets say $5,000 of state income taxes. you've got to pay that $5,000. you can't keep it. it's not your money. you can't keep it. it's not that all of your money is the government's money it's that this $5,000 you owe the government as income tax is the government's money to buy a >> why isn't that true of the tax deduction also? and this is a very modest tax credit. the tax deduction that was a wealthy person would get by making a contribution to the college or university that has a religious affiliation is much more vulnerable valuable than this $500 credit. >> it doesn't turn whether it is more of all evil or not. it turns on whether the taxpayer makes the payment the taxpayer is paying the tax payers on money or money the taxpayer owes to the government. when you make a charitable contribution, you are using your own money.

that's not money you owe to the government. you don't know how much money you owe to the government until you figure out your taxes. disaccredited doesn't come into play until you figure out your taxes, and then it -- >> i simply don't understand that. somebody does know. it's december 31st. the figure out how much tax they are going to have to pay for that year. they can know exactly what their taxes will be and it will be x and if they make a deduction, then it will be x negative why. what is the difference? >> the difference is -- to meet the broad difference is that the tax deduction is given for charitable contributions. and i think that court would decide if it faced the question -- and don't think it's ever had to -- that it is constitutional for the government to support private charity. and if the government is going to support private charity by letting you deduct charitable conjure visions come it can't leave religious charities all of that program.

but finally the stuff smith calls. so if you believe that charitable deduction and the federal income tax is a constitutional plan for the government to do, to support private charity by picking up part of the tab -- that's true, when there is a deduction. then you have to give the deduction to people who contribute to religion. so, yes, there is a government support for the private charitable contribution, but it's a charitable contribution. the money in this case is not a charitable contribution. mr. katyal says that it's not the government's money. whose money is it? is it the taxpayers' money who gives the 1,000-dollar contribution? no. if you don't take my word for it, look at what the stos say on their website about this program. one of them says quite frankly hey, you can give charity with someone else's money; it's a miracle. another one says it won't cost you anything. you can get charity with other people's money. >>