with providers, with groups that had special interest and commitment and experience addressing hiv. and all of that fed into the national strategy. .. have done most recently is

based on the data to dramatically shift out and for what we provide, as someone said in this rumor earlier in the conference we have never been where we are before. we have never known quite so well how we can make the most difference in caring for people and reducing disparity and decrease in incidents of hiv. we have begun providing jurisdictions based on where the need is greatest and within jurisdictions for the people at highest risk and within that population programs that work best so it is a partnership with communities to say we will work together toward a common name of driving incidents down by at least 25% over these five years

and for that we know that mutual accountability and creativity is essentials. >> the issue of disparity is one that occupies every country. i know in brazil you have some real challenges because of your under serve indigenous population in the amazon basin. you could talk about how you are reaching the least served and tell us about the ways you have engaged with your indigenous population in other parts of the strategy. >> it is a good point when we talk about disparity. you see countries where we say there is no money many times the distribution is very bad and at least in relation to brazil we

have been a very rich country with a lot of disparity and they decided to help that just was able to take almost sixty million people out of extreme poverty, the focus of what we're going to do and otherwise the importance is the same. and the frontier of the amazon. in conjunction with the government, and to get to the help that they need and that brings us to another subject and

interested -- and the point of intersection and no hepatitis in the amazon that can be wiped out with the vaccinations we have and these things are going to get there but involving the citizens side mentioned before the brazilian government has a lot of participation in all respects. i mentioned national health but the department of hiv aids, the main council that helps with the policy is a 36 member council with 12 from the stimulus society elected by them, and participate with us. spreading the mission we produce wheat produce also other things.

we produce -- distribute almost eight million throughout the country and produce condoms. i mention with my friends every time i put my hands in my pocket at least three condoms from the amazon come to my mind -- not my mind, my hands. i brought them to you here. >> this is a new way to think green. >> it is made from rubber plants from the amazon and indigenous people and produce 1 hundred million of those. about seven hundred million altogether. year but 1 hundred million -- trying to boost production. we need condom use -- away of doing it too. they have to have them every time they have relation with

someone else. that would be the best prevention method we could have. we have a means of bringing together the conference and the international aids conference. save the rain forest. use brazilian condoms. >> very good. >> you talk a lot about human rights and health care. i wonder if i could turn to benedict and asked about the challenges you face. how does swaziland address men having sex with men and address issues of women's empowerment in a traditional society? >> the issue of human rights is forecast -- the government with

hiv and respect their rights. the issue just came up and most of the time an issue of stigma so it did not come up back today. a joint challenge in time to find out where they are. it is something i feel as a country we need -- every moment -- a district and so on so we need to popularize this area. >> are there legal constraints in swaziland relating to homosexuality? closer to south africa where it is embodied in national law and

competition? >> you know, culture which is in the country so is very difficult for people to come out -- knocked in the constitution but we check down low so it is very difficult for most people to come up and disclose this area. it is a huge challenge. there is no way it is not condemned by political -- individual so people are not often up -- able to help coming up and difficult and business to

our -- challenge but we have seen quite a number. >> what about women's right? >> a lot of them empowerment on issues of gender and women able to vote in other aspects but quite a lot of empowerment but still with our culture -- issues of heritage and human-rights, through the civil society, women's rights respected and preserving a country without a constitution. sins we have a constitution or bill of rights in the

constitution and freedom before we hit -- passed away and the plaza and it has been a challenge, forced -- i encourage you -- in the aspect but we have a new constitution and to extend their rights. and the issue of human rights and still needed. and the culture is not something you can change.

[talking over each other] >> talking about everybody's equal. what we have everywhere, respect prosecution or enter the country like happens in many places. it is a -- we have a lot of violence. and do something about that. what to do about it? one is to take them to the judges. what we have been doing for some time is trying to -- accomplishing that to have health and education at the same time. talking about violence and sexuality and change the way

children see the country. people think they can be violent against different ways of facing life. it is hard work. get to the constitution and think everyone has the same right. much more difficult that violence can increase the vulnerability as we see everywhere. >> in the united states marginalized and criminalize to with high risk of hiv infection, how does cdc approach address groups that are particularly hard to reach? >> we can reach specific groups through specific programs. in jails we have rapid testing

programs but it is crucial we can't work with organizations that are embedded and emanating from the community. our biggest challenge in this country is the increase in risky behavior of young men who have sex with men. most of our infections are in young men who have sex with men and 60% and to serve this population, go where they are going and it is challenging because even programs that have been very successful at reaching people now with the internet facing the possibility of very rapid and fluid sexual encounters that are difficult to try to get condoms involved and involve consentual and sometimes non consentual sex but involve drug and alcohol in ways people

may regret in days following the these are real challenges and working with communities to make sure we are systematically identifying leaders and offering service and prevention and making condoms universally available and testing is universally available land increasing treatment to drive down the burden of illness and risk of infection, these are crucially important areas. we are seeing some real signs of hope in different parts of blood u.s. where we're seeing big decreases in new infections the more effectively we can reach people on treatment but we have much farther to go. >> benedict, tom mentioned the internet. traditional society but also recognize technology is changing

the face of africa with mobile phones and internet. can you tell me whether your program has started to make use in social networking and mobile technology and the internet for prevention and care programs. >> taking away something -- and -- [inaudible] >> we are using the internet or mobile phones on the care improvement programs and using the social network prevention. what we have now is the

follow-up, watching treatment, to come and another program, to come back and mollusk -- [inaudible] >> it helps to make it follow up. that is something in the country but for prevention we have a strong problem. we have something special for most people who use the internet. and from the other countries what we can do which is affected by hiv. >> both of you, how do you see

these new technologies? what opportunities do they offer for your programs that are just emerging? >> we have been using and thinking of everything to reach people. it is interesting because if you were to survey what people know about hiv aids and how to be protected 95% don't know what to do. one thing we could use that much more is to tell people that hiv aids is serious here because the same is happening in the united states. people don't know what happened 20 years ago. the time is here to have aids free generation. how are we going to accomplish that? one thing we can do and have been trying to do is trying to

get three different situations. with civil society i mentioned before, having them together and opening grants this year. the government opened the $7 million grant to work within the different areas. almost four times what hillary clinton mentioned the other day. $2 million this year for the waxmans. when you get someone in your office instead of just asking for cholesterol or triglyceride and telling them to get slimmer give them a test. let me help because people will start thinking that but the last thing is the most important.

if we know that, we have providers to ask -- different from the united states we don't believe in empowerment. never seen anywhere people giving power to someone else. talking about emancipation. people knowing that they have rights and with rights in their hands they can ask for what they really deserve. we have been doing that in many ways of confronting a difficult situation. i cannot forget to remember again three days from today against hepatitis, international meeting. >> in terms of using the new media and not quite so new media. >> we have some opportunities some of which have been

explored. treatment reminders through the cellphone, at the same time in many places web sites that facilitate encounters present the new challenge and aspect that present a challenge in terms of partner notification, in terms of safe sex and there is a role here for trying to figure out what works away that is respectful of people and takes advantage of the new technology. what do we do to give you a specific example? somebody says test positive and to have a partner i have a casual partner, all i know is e-mail address. should someone send that person an e-mail?

should someone say you are at risk? is there a duty to warn? a right to warn? a risk to the individual? these are issues we dealt with in the non virtual world but now that we have the exponential increase in the efficiency of context by internets we need to deal with it. this is a challenge in the u.s. because what people are doing to connect with each other in an safeway's and safeway's is quicker in public health and prevention services we have been able to do on internet, facebook and instant messageing.

>> i saw a facial expression and i know from the standpoint of human rights many of these issues come in to play. your reactions. >> very difficult situation. if you have a way of telling people they have risk, it should be for all. hiv aids, the consensual -- rol is to make sure everyone knows that by having sex without protection there a risk and by doing so we have to open up a way of raising them to us.

[talking over each other] [inaudible] >> change the subject a little. i am going to ask about sustainability. benedict, let me come to you in terms of this. the flip side of information is misinformation and misinformation is rampant starting on the internet as you saw in your neighboring country for many years, things that are not true about aids and act on them but also communities. how do you deal with misinformation in a society just emerging from a traditional society? >> the information is a challenge. we use our electors, and traditional lecture where in the

program we look to the community and like using the community really understand. our mechanism, issues of condom usage we heard the challenge one time, somebody put their condom in water. put it on top in the vanity and then certain information, is balance. difficult information because people live more for misinformation to give their information or issues of condom usage. and -- discuss the issue.

national radio, and it is enacted to the program and the program that -- as well as print media. very affective to engage society and fight our way with this information. and it is an issue so it is critical given the information, the traditional leader. to understand what you are trying to bring and pump information to their communities. community -- [inaudible] --

parsing information. we almost know each other. we talk to each other almost every day to make information from one area to another. in the country to use our lecture and not to exchange one but use it. and like a traditional -- this information is falling. >> your show started to raise the issue of financial sustainability, with the global economic situation increasingly facing whether they have the honor funds or funded by their own taxpayers. secretary kathleen cbs announced --sebeloius announced the plan

is being cleared so those with access to drugs whether they have their own resources or not. how do you see this process evolving given that we are not reducing at this point the number of hiv-positive people? >> a few trends are important. the first is to work hard in every country to be more e efficient because health care is expensive. if we can provide the same quality of care to more people for the same money we can do more good with our resources. a key priority is to increase efficiency. we have been able to work with countries drive down unit costs friedman substantially and we could make further progress as we transition services to local providers and local providers

work with lower-cost and maintain quality. first issue has to do with efficiency. second is functioning of the health care system. this is really important and in the u.s. to have the affordable care act which will make it possible for people to get a routine test through any insurer without co-pay and make it people with hiv to get health insurance without discrimination against them so it is important increasing access and equity and care. at the same time it is crucial that we insure the health care system is accountable for outcomes and an area where we are eager to learn from other places around the world that are doing a better job. on average only 28% of americans are on effective treatment.

and people who don't know their problems, and very small number of people don't want any treatment. that is entirely their right. most people by all accounts should be on treatment are not effectively treated and that failure to use existing resources, failure to hold ourselves and our health system accountable for good outcomes and the result of that is going to be hospitalizations that are avoidable and infections that are avoidable and tragic deaths that are avoidable. the sustainability challenge -- >> remind you can follow live coverage of the aids conference on line at 3:15 and c-span.org. we will have live coverage of bill clinton's comment that 4:25 on c-span2. we will take you live to capitol hill where the alliance for

health reform and commonwealth fund posts a discussion on health insurance exchanges. the exchanges which take effect in the country in 2014 as part of the 2010 health care law seek to provide consumers and small business a market place to purchase private health insurance. discussions just getting started. live coverage here on c-span2. >> the idea is to offer consumers and small businesses transparent market where they are going to be able to shop among affordable coverage options and it will be a place where the exchange can help determine the individual's allegedly for various subsidies available under the law. they are scheduled to be operational in time to start taking -- sorry -- i am not used to these morning programs.

in time to start actually covering people in january of 2014. a lot of moving parts need to be put in place for that happen. it has been almost 2-1/2 years since the law was enacted the law states were reluctant to invest a lot of time and resources into establishing these exchanges given continuing controversy over the law's marriage even its constitutionality. as you will hear there's a lot of work to be done and consumers are going to use these market places to choose the insurance that is right for them and we are hoping to gauge that progress this morning. the progress that both federal and state governments are making on setting up these exchanges and look at the major challenges facing everybody involved in setting them up and operating the exchanges. we are pleased to have as a partner in of the commonwealth

fund which has done and commission the lot of analytical work on exchanges has an important component of high-performance health system. i want you to nose in your packets a brand new paper by sara rosenbaum and her colleagues on the first generation of state exchange laws as a good example and we are more pleased to have as co moderator and active participant in today's discussion sara collins, economist by training and vice president for affordable health insurance. sara? >> thank you. thank you to the panelists for joining us today. the state exchanges -- wait a second. are really new private insurance market places. they are the centerpiece truly of the affordable care act's coverage provisions.

they will be at a central place where people will go for health insurance if they don't have affordable coverage to a job. people will gain access to and a ray of insurance options leif personal private plans, children's health-insurance, states may establish their own exchanges for h h s will set up exchanges. in order to establish exchanges states have to give themselves the legal authority to do so if for no on this map which is an interactive tool on the web site, 14 states and the district of columbia in darker blue on the map have signed legislation in place or executive order by their governors have established exchanges. the lighter blue on the map a mixture of states with histories of legislation in the last two years that were introduced or pass or active initiatives by their governors. the states in white decided not

to establish exchanges. in your packet is a new commonwealth fund brief by sara rosenbaum with provisions of the state exchange laws as right now a key finding of the research is much of the details are yet to be worked out by the exchanges themselves all of them have been created as public accountable entities with policy and market shaping power. many states that don't have legislation have federal grants to design their exchanges. 34 states and district of columbia have received $830 million in grants. in 2014 when the federal and state exchanges are operational people without an offer of employer coverage or public insurance coverage will have a choice of private so-called

qualified health plans sold through the exchanges that will offer comprehensive set of benefits known as essential health benefits package. people with incomes between 100 people still and 400% of poverty which is 23,005 to 92,000 for family of four eligible for tax credits that will cap their premium costs as a share of their incomes. in the wake of the supreme court decision the congressional budget office estimates that 29 to thirty million people will become newly covered under the law by 2020. this is three million fewer than estimated in prior estimates in march. about eleven million people will be newly covered through medicaid. this is down from seventeen million in prior estimates. about twenty-five million people are estimating coverage of the exchanges. this is three million more than estimated previously before the supreme court decision. what is behind the change in

estimates? supreme court decision, medicaid expansion in the law such that states are permitted but not required to expand their medicaid programs to adults earning 133% of the poverty level. the decision leaves intact substantial federal financing for the expansion 100% in three years and facing 90% by 2020. in states that participate in the expansion people learning 100 to 132% of policy are eligible for medicaid. people in states that don't expand eligible for the premium tax credits in that income range but those plans are more expensive to enrollees so the cbo estimates lower take out than there would be in medicaid expansion. under the law people with incomes under 100% are not generally eligible for the tax credits. was assumed everyone in that income range would be covered through the medicaid expansion.

nationally nearly half of adults, fifteen million people with incomes under 100% of poverty are uninsured. numbers are higher in some states that they won't move forward. about 1.9 million people in that income range in texas. in a rising at the latest estimate cbo makes assumptions about incentives facing states and deciding whether to anticipate and the numbers of people newly eligible gaining coverage but a huge amount of uncertainty clearly about what the final outcome will be. the panel today will take up some of the key implementation issues for the exchanges particularly in the wake of the supreme court decision given open enrollment begins in october of 2013. what are the next steps for state and federal government to meet the deadline and what are the implications of the decision particularly as regards to coverage of lower-income

families and federal and state policy options for participation in the medicaid expansion and with that are will turn this back over to ed. >> thank you, sara. just a couple quick logistical items in your packets. there is a lot of good background information including biographical information of all of our speakers. there are copies of the power point presentations we had on hand in time to reproduce and we will have krista drobac's presentation on our web site allhealth.org as sins we get back. everything is listed on one page material sheet with a lot of background material. we didn't put in your hands in hard copy but none the less useful in this discussion. there is a web cast available on monday through the good offices

of kaiser family foundation on there website or the alliances. we will have a transcript on our web site in about a week. we invite you to use the green question cards at the appropriate time and a blue evaluation form we would desperately like you to fill out and give us some feedback and suggestions on not only how to make programs better but what to do programs on. we could use your input on that important question. so let's get to the program without further delay. we are going to start with a great panel. we will start with two -- tim jost who teaches health law at washington university law school. he wrote the most prominent case both used in teaching case law across the country. he is a consumer representative on the national association of insurance commissioners and

veteran of a number of commonwealth alliance panels and we are glad to welcome you back. >> thank you very much. when the affordable care act was passed 28 months ago many wondered why its most important reforms were delayed almost four months. today in little over a year before the exchanges will start signing up their first and will ease its team's 2014 is coming far too soon. h h s, irs and the labor department release hundreds of pages of regulations and guidance sins march of 2010 when it was signed into law. most were issued on time and implemented without serious problems although the pace of implementation has slowed recently. on january 1st, 2014, most of the remaining reforms are supposed to go into effect. first american health benefits exchange must be in place in every state including small

business exchange. the ac a underwriting reforms which brian will talk about must be in defect. the risk adjustment reinsurance and risk corridor programs must be up and running. the individual and employer responsibility programs must be in place. premium tax credits and cost sharing reduction payments must be available to assist middle income americans purchase health insurance and finally medicaid must be expanded to all individuals below age 65 with incomes below 138% of the poverty level in those states that choose to participate. most important among these reforms are the exchanges, the gateway to other reforms. they ac a asks states to establish exchanges but a law also the possibility of federal exchanges for states that do not decide to proceed with establishing their own exchanges and in particular in states that

are determined on january 1st, 2013, to be unlikely to have an exchange in place by january 1st, 2014. the final rule on exchanges sets for a somewhat more complicated framework. first it recognizes pure state exchanges vote even these states exchanges concede certain functions to the federal government. they are a part exchange in which the state agrees to carry out management or consumer assistance function or both and leaves other functions to the federal government. there are federally facilitated exchanges but even in these states take on certain functions. states must notify h h s by november 16th of this year eight business days after the election which of these options they prefer to pursue. but the exchange rules recognize even further flexibility. states exchanges can be conditionally approved in 2013

if they are likely but not certain to be operational by 2014. a state that begins with federally facilitated exchange can transition to a full state exchange over a 12 month period or vice versa. exchange establishment funding will be available to the end of 2014 for lagging states and spent to three years thereafter. 2014 is the target date for the reforms many -- the exchanges must be under way before that date. they must go before enrollment in october of 2013. they must have certified qualified health plans but for that in turn insurers must design and price fair exchange plans and file forms and rates with state regulators before q h p certification. if you work backwards from october of 2013 you get almost

to the present. obviously states and insurers need more information and i suggest you look at the gray handout rather than trying to read the slide because there's a lot of information here which you won't the award now but hopefully can use later. h h s issued final rules on the individual and sharp exchange and qualified health plans and qualified employers. the three our program medicaid eligibility under the a c a and as of last week to support essential health benefits and recognition of q h the accreditation programs. the irs had final rules on premium tax credits although they can make significant gaps and for those who don't know every time a new rule comes out 5 blog about it on the health of tears blog. if you don't want to readi blogf tears blog. if you don't want to read a 300 page regulation serve-special

health benefits and actuarial value and exchange medicaid i t systems and frequently asked questions. hhs provided additional grants. on some issues like essential health benefit guidance will not suffice and further regulatory action is necessary. on other topics such as federal the facilitated exchange hhs has no legal obligation to proceed through regulation and may simply proceed through guidance. number of 2014 requirements of the ac a -- aca ourself executing. no rule is necessary to implement them. these among others include prohibition on annual limits post 2014, preexisting condition exclusions and, guaranteed renewable wooley and prohibition

against discrimination on health status. rules will be needed that are not issued including requirements for quality reporting by plans, limits on rating factors that can be considered in the individual and small group market, guaranteed availability, basic health plan and individual employer responsibility provisions. i am trusting mike will give us an update on these later in the program. the agencies have signaled their intent to delay implementation on these provisions such as the exchange quality provisions of that water and we may perhaps have a little breathing space left before some of these provisions like the employer and individual responsibility provisions need to be in place. on the other hand some issues such as risk pooling or underwriting requirements we need decisions very soon. making major policy decisions in the highly charged political

atmosphere that will exist between now and the election will be difficult but some decisions cannot wait if we are going to get to the january 1st, 2014, date. states that have not taken executive or legislative action to establish exchange have probably missed the boat for creating state exchange. time will be tight for creating a partnership exchanges. i would expect at this point we will end up with a federally facilitated exchange initially in most states. on the other hand if president obama is reelected i expect federally facilitated exchanges will be up and running and capable of fulfilling basic exchange functions and i expect most states will transition to state exchange with partnerships status being potential way station. there will certainly be. es along the way as there are and implementation of most major changes. i remain hopeful in the near future the promise of extending

health insurance coverage to millions of middle-income americans will in fact be fulfilled. sir >> next we turn to brian webb, manager of health policy legislation for the national association insurance commissioners. brian has served as health policy adviser to former house ways and means committee chairman bill thomas and senior position in the federation of american hospitals at blue cross blue shield association. wide background. we're pleased to welcome you back to the program. >> thank you very much. before i get too far along one question we get is the why question. why do we have to have these exchanges up and running by 2014? can't we just put that offer year or so?

can't we just string it out a while? the problem is the rest of the law. the exchange is not operating in a vacuum. the reality is the individual mandate will go into effect. that will start january 1st, 2014. people have to have coverage and qualified coverage in order to meet that mandate. elbow's lower-income persons, there are subsidies available but in the individual market the only way to get the subsidy is to purchase through the exchange so you have to have an exchange up and running selling products prior to january 1st, 2014. they suggested october of 2013. selling qualified product so people can have those products in their hands as of january 1st, 2014, so they can meet requirements of the law. there is not a lot of leeway

unless somebody wants to go back and change the law. do i have hands? unless they can do that people will get caught in a bind. we need the exchange up and running and if states don't do it the feds will have to. that is not an optional lot of people want. we love the government, right? they do a fantastic job but this is a task that will be massive for the federal government. speaking to the national association of insurance commissioners we hope states will play a major role in getting these up and running and making sure everybody gets protection. there is a lot of work to do. you can see this but it is on your paper. we have gone through many things that you see 2014. exchange is not the only thing that will happen. states have to do a lot of work to try to get ready for 2014. not just exchanges. much of it has to do with market reforms. i know exchanges are the big

beautiful building out there that everyone wants to say isn't that wonderful and will change everything. the reality is the thing that will change insurance are market reforms especially individual markets. for the first time in most states people will get coverage even with a preexisting condition and get coverage immediately and won't be rated based on their health status and won't be put into a small little book of business but will have to be shared across the entire book of business. these are major reforms that will impact rates and will impact access to coverage in every state. these are important reforms and we have to get ready for these outside the exchange as well. if states do not get ready for this they lose the ability to regulate. some states will say i am not doing anything. they may get their wish and not be able to do anything in their marketplaces.

there is language in the legislation that says nothing in this title shall preempt any state law that does not prevent the application of revisionist title. what that means is if you have a state was preventing the application of the federal law it is pre-empted. if you sit there and say i won't do the guarantee issue in the individual market. i won't do the rating reform. i will approve plans or don't have the benefit package. i will approve plans that have annual limits. i will approve plans that have lifetime limits. the reality is your laws in your state will be pre-empted and it will be of the federal government and we will approve all rates and forms in your state. the state will be relegated to the position they had with medicare advantage where they do licensing insolvency and that is it. whose choice is that? that is the state police but that is the reality.

that is why states have to start getting ready and you have many options. that is the market place. we have to start getting ready for the central health benefits. the federal government has said we will allow the state to choose from a list of possible options. you heard this many times. a large or small group the three largest federal employee plans, three largest state employee plans, you choose. we need propose regulations or anything but states should be working on that. we know what the first quarter of the year looked like and we have until sept. thirtieth, 2012 for the state to choose what the benchmark plan is inside and outside the exchange. that has become a soft deadline but the insurance companies are nervous about this being a soft deadline because they need to know what products they need to sell. they need to know what these products are. states have an opportunity to

step in and be part of the process of choosing the benchmark. what has to be offered. we have to start being prepared to do this concept of actuarial value. we don't do this loss if any. we have to look at these plans and see if the cost sharing structure they have for the essential benefits need -- meet these bronze, sober or catastrophic limits. states have to be prepared to do that. the federal government -- the state government doesn't do it will be up to the federal government so states approved plans that don't meet standards than the fed will have to step in so states have to be prepared for that and also have a choice whether they want to run the insurance program. three your program. billions of dollars nationwide are going to be shifted from the individual small group large groups of injured marketplace down to the individual market. the state has to choose do i want to be part of making the decision about who an individual

market gets that windfall. who is going to decide? of the state doesn't do that the feds will. if the state and only if the state is doing the state exchange and the state can do the risk adjustment. otherwise we will be using the federal risk adjustment program. risk corridors is a federal program we don't like to talk about. it is kind of interesting. when it comes to exchanges states have options. as states we are always pushing for flexibility. we are getting that through these regulations and we got this in this law. states have choices. there are minimum standards that states have a lot of flexibility. a state can say i need a federal exchange and don't want to do this. the federal government is choosing how it runs. initially they said we will let everybody in. any qualified health plans they can come in and sell. no guarantee in the future that is the way it is going to be. we don't know what the future is

going to do or how is going to operate or choose people. network adequacy rules and marketing rules, if they are running it they have the opportunity, that is a question. do you want the federal government to make those decisions at the exchange? state can do medicaid eligibility and giving the rest of the federal government. i would warn if state says -- we are hopeful states will help the fed's telling them who is licensed, who is solvent, who is qualified health plan actually approving plans that can be sold on the exchange. we have to have coordination. they recognize that and we recognize that. we can do partnership where the government is for the exchange deciding who qualified health plans are.

their certifying them, looking at rates and forms and make sure they have benefits and we are going to do that and tell the federal government these are approved. we will check the network adequately and the marketing and do all of that. that is an option where the state is a solid part with the federal government with more say in how these plans are regulated and finally a state can do a state exchange with total control of how these run if we meet minimum standards in the federal law. what i didn't put on here is the state at the same time deciding how the exchange is going to work and how the i -- out side market is going to work. states have to be very careful. for example individual markets guarantee issue. in the exchange it will have an open enrollment period. certain time during the year when everybody and go in and purchase guaranteed issue through the exchange. what if the outside market

doesn't have open enrollment period? what is going to happen to the outside market? who is going to sell where they get everybody sick whenever they come whereas the exchange is only a small window in which to purchase that? states have to think about that. if your status as i am not doing that? i am not -- you better look figure out side market to make sure the rules of the exchange don't severely injure your outside market and make sure you are getting that taken care of. deadlines we have until nov. sixteenth 2012 to get your application in. we will do a partner or state exchange. if you are silent you get to work. january of 2013, hhs will certify the state exchange as well as partnerships. this is how we will move forward for the year to get ready for october of 2013. additional opener roland period. between january and october that

will be a busy time for states as we sit there and try to get these plans certified and ready to go. january of 2014 coverage is effective. funds are available. very briefly on medicaid options they have added this. the supreme court's said more options on medicaid. you don't have to do the expansion but as was already discussed if you do that and don't do the expansion you are going to have a gap. 100% of poverty don't have coverage. states have to deal with that. figure how they will do that? you expand under the aca go 100% or not expand the you want to expand your old program or cover them that way? other options may be available. if you have any questions there are couple other people you can call on other than me. >> excellent. thanks very much. we can move the clicker along.

thanks very much. next up is krista drobac of the national governors' association where she directs the health division of nga center for best practices and she has held senior positions within hhs and at the illinois state department of health care and family service. welcome back. >> thank you. my apologies -- they will be available later. i hope i don't have to rush through these but they did put the big red clock in front of me and i'm standing between you and mike. this is a timely discussion because nga had its annual meeting two weeks ago with our governors and last thursday and friday we had 40 states in town for a discussion about post supreme court decisionmaking so lot of what i'm going to say

will reflect what we heard in the last few weeks. there's also a summary of our meeting with these 40 states on our web site. .. >> and how that is going to impact state spending. so that can't be underestimated. i know we're here mostly to talk about exchanges, but the -- in light of the supreme court decision, states are really focusing a lot on medicaid as well as the exchange, so i wanted to go through some of the

things that states are considering as they look at whether or not to expand medicaid. obviously, there are a lot of questions which mike is well aware of that in thinking about whether you expand, a lot of states are wondering, well, could we just go up to a hundred so that people between 100 and 133% of poverty have access to the exchange? can we expand over time? what happens to our funding if we do only do a partial expansion? will the future -- can we get the 100% match rate if we just went up to a hundred? what happens to the children's expansion and mandatory expansion of foster kids up to 26? there's some debate whether that is included in the supreme court decision or whether it was part of the old program. the last question, i think, is a really, really important one.

if we do expand up to 133% of poverty, can we go back down later? so if we run into significant budget challenges in the state, we're at the 90% match rate, we can't come up with the 10% state match, can we go back down? and, um, you know, the statute reads that all individuals up the 133%, so it's very difficult to figure out what might happen there given the way the statute reads. um, so right now states are trying to estimate the impact on the state budget of going up to 133. and i know this may not sound like a lot. when you're in the federal government, it sounds like we're being really generous, but states are cutting medicaid right now because they can't carry the budget implications now. so as they were very carefully considering what it really means to have an additional group of people on medicaid and the state paying 10%. so, um, i think a lot of state

officials right now are, um, trying to figure out what are the right assumptions in estimating the impact on medicaid. and there's a lot of numbers floating around out there. so they want to make sure they get it right. so they are, um, trying to figure out, for example, how many people can we expect that are already eligible and not enrolled that may enroll? because those people are not going to get the 100% match. so what's the budget impact of that? what are the costs of our current state-only programs? uncompensated car tools -- care pools, all of those things are paid for with state dollars that if those people become eligible for medicaid, they could actually reduce the cost to the state. so it's something to think about, you know, whoo might our savings be if we did the medicaid expansion? and then, of course, there's what are the implications of the dish payment reductions. now, the secretary in those statutes has authority to come up with a fair formula, but the

problem is there's going to be less money, so either way you look at it, there's going to be less dollars for uncompensated care through dish. what's going to be the provide reaction to that? obviously, you're still going to have uncompensated care and people going to the hospital, and if those hospitals get less dish funds, what is their reaction going to be? what is the cost to the state and the counties and privately-insured people if there continues to be uninsured people that go to the hospital as they do today? what are the administrative costs to the state to have new people on medicaid? and then if you look at the expansion population and the characteristics of the expansion population, are they going to be more expensive than current? so how much might we expect these folks to cost? there is difficult a disproportionate number of people in the expansion population that have mental illness and behavioral health challenges.

some, for some states that makes the decision clear. well, that means we must keep them on medicaid because the medicaid benefit package for mental illness is very good and rich, and if you have them in the exchange, well, the benefit packages for behavioral health aren't as great. so, and it also factors into whether you need to keep community mental health dollars in your state budget. and then finally this -- the states that have done medicaid expansion already have found that the people are definitely more costly than the current parents, but they're less costly than disabled enrollees, so they're somewhere in the middle. oh, and also you're looking at a new kind of churn. what happens if they go between medicaid and the exchange and the continuity of care, etc. well, now you've got people going between insurance and no insurance, so you've got, obviously, very different networks of care. um, so on the exchange, so you've got, you know, you've got

states trying to work through all those medicaid issues and exchange issues, and in deciding whether to go for a federal partnership or state-based exchange, um, states are thinking, well, could we start with a partnership and maybe move to a state-based exchange? in the partnership model, what's the sustainability model? how do we pay for it? if we're going to do consumer assistance and planned management, how we pay for the administrative costs on an ongoing basis. i guess the states, you know, the federal government may have a user fee in the exchange, but the state has to consider whether they would have a user fee, so they're trying to figure out what the costs of a partnership actually means. they're also wondering what's the state level of effort, so somebody's got to change their language so the two programs can talk to each other as they build an interchange. what is the memorandum of understanding with the federal government look like? obviously, many states can apply for grants to cover a lot of

these administrative costs up front, it's just the sustainability, the long term. many be states, as you may know, have advanced planning documents, so they've actually used the 09/10 much -- 90/10 match plan, and they've agreed to build an interface between the federal exchange or the state exchange and the medicaid program. so there's a lot of work to do on that interface. and then finally, do you make your own medicaid eligibility determinations, or do you accept the assessment from the federal exchange? do you have medicaid folks in your own departments making those eligibility determinations, and, obviously, that impacts administrative costs. okay, i have two minutes left, so i'm going to hurry up here. market questions. so if you, if you, um, want to drive between between 100-133% in the exchange to shift the

cost more to the federal side of the ledger, how do you do that? can you pay for their premiums? because, obviously, there aren't premiums medicaid like there are in the private market, and a lot of people may not pay those premiums at that income level, so could the states pay their premium, or could providers pay it, for example? so how do you make the impact on low income people less so they may choose the exchange? what happens to the marketplace if those folks go into the exchange? as i mentioned before, behavioral health is a dispro portion mate share of behavioral health needs and what about their benefit package in the private market. um, and then, of course, as brian already just talked about, what are the effects of the market reforms on insurance premiums and whether people would take up the u um, exchange at that income level. obviously, everybody is, um, well aware of the impact of the election. um, states have to declare ten days after the election, um, what their decision is related

to whether they'll have a partnership state or federal exchange. so there has to be some groundwork laid because in the blueprint for the exchange, states have to complete 42 activities to be a state exchange, and 19 activities to be a partnership exchange. so if you're going to attest that you're going to get some of that done, obviously, some of that work has to start now in considering what you might do. so that does make some, politically a little bit difficult as you're waiting for the election. and then finally i just want to mention the federal budget. um, you know, everybody is worried about the state budget, but many m governors are worried about the debate going on here in washington about deficit reduction. and if medicaid becomes part of a deficit reduction deal, what does that mean for the federal match rate for states? so it obviously goes into their consideration, you know, if we go up to 133, what happens if you decide that we don't get 90%

match anymore, that we go back to our regular fmap or some kind of blended rate, and we've got all these people on our rolls, and we can't afford them, and we can't go down in eligibility. so the federal budget has huge, is just a big factor for many governors in considering whether or not to expand medicaid. and i had one second left. [laughter] >> great job. terrific. thank you, krista. now we turn to mike hash who's the acting director of the center for information and consumer oversight, also the actual director of the hhs office of health reform. he's a veteran of the white house office of health reform, also of the respected health policy alternatives firm near d.c. he's a longtime senior staff member of the house energy and commerce committee and at one point the acting director of what is now cms. michael hash, thanks for being with us. and i should say because we had

to shift the time around, mike is going to have to leave long before the q&a is over, so we appreciate your carving out as much time as you could. >> thanks, ed. i'm delighted to be here and to join with the alliance and my colleagues here on the dais to talk to all of you about what we're doing to implement the affordable care act. as everyone in this room knows, we now know the supreme court has found the affordable care act to be fully constitutional, um, and that decision insures that all hard working middle class families will get the health care security that the law was designed to provide. from our perspective at hhs and more particularly it simply means that we can continue moving ahead with full steam to implement the law. today i want to talk to you briefly about where we are and the progress that we are seeing

in the establishment of the health insurance marketplaces, the affordable insurance exchanges. as i think several people on the panel have already said, at least at hhs our strong preference, our premise, in fact, is that we want each state to establish its own exchange because the state-based exchange provides states with the most amount of flexibility and involvement in running these new marketplaces. at the same time, we know that some states will need additional time and assistance before being able to run their own exchanges, or they may choose to work in partnership with us as has been pointed out in the context of a federally-facilitated exchange. we've seen what we think is really good progress around the country with the establishment of state-based exchanges. the process of building them. and we expect to see more now that the supreme court has provided a clear and final

decision. so i think, again, many of you o may know in this room 34 states and the district of columbia have received approximately $850 million in exchange establishment level i, level ii grants or cooperative agreements as we call them, and those funds, of course, are designed to provide the resources that are necessary to build the exchanges. a few weeks ago we announced additional opportunities for states to apply for exchange establishment grants. through the end, really, of calendar year 2014. these funds are clearly available for states to use beyond 2014 as they have to continue to work on their exchanges. this, we believe, will insure that states have the support and the time necessary to build the best exchanges that meet the needs of their residents. we also announced that these grant funds, these establishment

grant funds are available to fully fund exchange-related activities during the start-up year of an exchange. we are expecting to award additional sets of grants in the middle of next month u in the middle -- in the middle of august, and we'll offer further opportunities to apply for these grants in each subsequent quarter between now and the end of calendar year 2014. this past may as again you know, we published the exchange application or at least what we refer to as the blueprint that states are going to use in order to receive approval for their state-based exchanges. and we are in the process of getting comments on that blue print. we'll be finalizing it later this summer. our exchange blueprint is structured around, of course, the functions and activities that states need to perform in order to be certified as a state-based exchange or a state

partnership within a federally-facilitated exchange. the blueprint as i think kristin just noticed in her -- mentioned in her remarks is due 30 days before the beginning of a calendar year, but in the case of the paris year of 2014, we're asking the states to complete the blue print by november the 16th. and the other states that are still on their way to be a full state-based exchange can apply in subsequent years. now, here's some of the latest data at least that we have assembled about the progress among the states. first, as of the 24th of july, just a few days ago, 13 states have sent a declaration letter expressing their intent to establish a state-based exchange. we now have as i think i mentioned earlier 35 states including the district of columbia who have already received establishment grant

funding and, obviously, we're expecting there will be more as we move through that funding opportunity cycle. nineteen states have already established the authority that's necessary to operate an exchange whether that be state legislation or an executive order, and 17 states have hired or are in the process of hiring an executive director or its equivalent to actually manage the operations of a state-based exchange. with respect to the critical function of building the information technology infrastructure, about 42 states have completed an information technology analysis, so-called gap analysis, to see what they need to do. twenty-two of our states have, in fact, issued requests for proposals from vendors and contractors in order to start building the systems that are necessary to support the exchange functions.

now, let me say a couple of words about the federally-facilitated exchange. as, again, as i said at the outset, our strong preference is for states to establish a state-based exchange giving them the maximum amount of flexibility to tailor their exchanges to the needs of their own marketplaces. however, we realize that not all states will be ready to accomplish these exchange -- establish these exchanges by 2014, so we're on track to set up the federal ri-facilitated exchange in those states that aren't certified as of january 2013. the federally-facilitated exchange is on track, on time to go live october 2013 which i think many of you know is the beginning of the first open season associated with both the individual and small group markets. like states building their own exchanges, we are covering the major operational areas, the funks that the law requires ex-- the functions that the law

requires exchanges to perform, plan management, the eligibility and enrollment functions, the determination of advanced premium tax credits and cost-sharing reductions, the financial management responsibilities that exchanges have for the flow of funds such as the payments, of course, to the issuers of qualified health plans. our federally-facilitated exchange is being built in a very collaborative manner with the states. we're using industry standards for the exchange of data which is so critical to a seamless consumer experience which we're all striving to achieve. the first round of testing with the states and the insurance carriers, some of whom will be use thing the exchange, is curndly underway. it's being built so that it's easily accessible and scaleable so that we will be able the meet the needs in any number of states who require an ffe or a

partnership model with the, with the ffe. we're also building what we refer to as the federal data services hub. that's on track with a contract awarded earlier this year to establish that. you may know the data services hub is going to be a place where, a single place where the ffe and in every state-based exchange can use to securely validate the information supplied by applicants with the relevant federal agency partners that are called upon to help with that task. soon we are going to release the federally-facilitated exchange implementation schedule to states so that they can align their own work, um, with the schedule of our work on the ffe. and we're, of course, going to release additional guidance about how we are implementing the ffe and the partnership arrangement with respect to plan

management services and consumer assistance programs. um, so i think you can see that at least from our vantage point we certainly believe that we're making significant progress on the actual build both of state exchanges, a partnership arrangement under a federal ri-facilitated exchange and the federally-facilitated exchange itself. the design of all of this is moving forward, i think, on pace, and we are, we're doing everything we can to make sure that we're ready for 2014. we're pleased, as i said at the outset, with the progress that we see and with our colleagues in the states, with our colleagues at the, within the insurance industry and all of the stakeholders who are helping us create these new marketplaces where consumers can access quality, affordable health care coverage, and we want to assure everyone that we're going to be

ready, and we believe our state partners will be ready to make the promise of the affordable care act a reality for all americans. thank you for having me here, and i'd be delighted to participate with my colleagues with some questions that you may have. thanks, ed. >> thank you, mike. that's terrific. as mike said, we've got questions that you have that we'd like to put to the panel and perhaps an early emphasis on mr. hash because of his early departure. there are green cards in your packets, you can write the question, hold them up, and they'll be brought forward. there are microphones that you can use to voice your question in which case i would ask that you identify yourself and keep the question as short as you can so that we can get to as many as we can. i should have said this earlier, but we are summarizing today's briefing live on twitter using

the hashtag pound sign ahr exchanges. since you're here, feel free to share your thoughts in moments from the briefing. and as zack thompson has told me to say, we'll retweet the best of them which will likely make you rich and famous. [laughter] we have someone at the microphone, and let's start with that. >> bernadette fernandez, congressional research service. my question specifically is for brian, but actually before i get to that, there's a couple of things i wanted to add. you mentioned that maybe one of the motivations to get an exchange up and running is the market reforms, there's also a few other things you might want to remember. there's the termination of the pre-existing condition high risk pools that a were established so we can go back in the states before, but a third of the states don't have those high risk pools. there's the termination of the

tax credit. so, you know, there's a lot of moving pieces. and then just a final reminder that there's that provision in the law that basically said members and their personal staff have to get coverage that's established under the law. [laughter] so self-preservation, that might be -- >> this means you. [laughter] >> yeah. so the question to brian is about the, um, reinsurance program and the risk adjustment program. at the risk of getting wonky really fast, um, there's some concern that the language isn't really clear about what happened -- who establishes those programs and who, um, essentially is the oversight authority if a state decides not to establish an exchange and it becomes a federally-facilitated, excuse me, federally-facilitated exchange. now, i just might be spending too much time around lawyers, but there is some -- it's not

necessarily disagreement, we're just kind of unsure about the language. so i'm curious to hear your read on the provisions and kind of what you see applying in a federal exchange. situation. >> the way we're reading it is under a federal ri-facilitated exchange, it would be the federal government that would do the risk adjustment program. and thai established early some early constructs on how they're going to do it, but we're expecting this fall to have some more details exactly how they plan to operate a risk adjustment program. so it'd be their responsibility. now, whether they would contract with somebody, i don't know. but it would be their responsibility. in a federally-facilitated or partnership exchange which is an ffe. but in a state-based exchange it would be the option the of the state to within the requirements of the law do the risk adjustment program the way they want to do it. on reinsurance we see it as

they've given the state the option to operate that and give them some options about who, what kind of entities in the state could do it. but if they don't do it, then we see the federal government having to do it. so that's our reading. >> okay. sara? >> just, i'm just reading a couple questions for mike hash before he leaves. with enrollment beginning in october, 2013, can we expect guidance on central health benefits before that deadline, or does hhs believe that the bulletin provides enough certainty to move forward? i think it's october 2013, not this october. >> yes. we are, obviously, planning to issue and go through the rulemaking process for establishing essential health benefits. i think, again, we have already issued a bulletin last december in which we laid out our intentions with respect to how we would define with the states

the essential health benefit package. we have also put out some questions and answers to fully flush out some of those issues that came up in the context of the bulletin from last december. got a lot of comments on that bulletin, and we are using those comments as the basis for putting together the essential health benefit proposed rule which we expect to have out shortly. >> and just another question for mike, when will the details of the federal exchange be released? >> um, the federally-facilitated exchange. we put out, as be many of you may know, we put out a guy dance document in -- guidance document in may in which we described our intentions. we realize that not every operational detail was included in that guidance, so we are in the process of formulating additional guidance for later this summer related to the

federally-facilitated exchange. >> can i ask a question? >> please, go ahead, brian. >> no. >> while i've got you here, i'm just curious on that stuff that's coming out later, whether that include kind of the cost estimate? i'm getting that from a lot of states. they want to know how much the federal exchange is going to cost so they can compare it to how much it would cost for them to operate it. so i'm just curious and how you expect to fund it's going to be in there? >> i think the funding issue is really a budgetary issue, and i'm not sure that'll be in the guidance itself, but it's certainly something we have in the president's budget and is a part of our planning for the future. but the guidance that we're preparing now to elaborate on the may guidance with respect to -- is more detail about the operational aspects of the federally-facilitated exchange. >> yes, krista? >> i just want to add something, and correct me if i'm wrong here, but as far as i know the federal government can only assess the user fees inside the

exchange whereas a state has the option to do a more broad-based user fee or tax. so in the federal exchange it could be, um, you know, higher cost per user for the operations of the exchange. just want to mention that. >> do we have any notion of how much money we're talking about either on a per-population basis or overall? in either the federal or the federally-facilitated exchange or state exchanges? >> so it depends, too, on the size of the population that you expect to be in the exchange. if you're going to use user fees. >> right. >> but, you know, i've heard some smaller states use numbers between $5 and $8 but larger states using smaller numbers, so it, you know, totally depends. and if you look at utah, you know, that could be -- >> i completely agree on this. it varies widely depending on

the size and scope of the exchange operations. we clearly are going to be working closely with the states. we -- our expectation and desire is to leverage the resources that already exist and the capacity that brian's colleagues across the colleagues in departments of insurance already have in place to perform a number of the functions of certifying and reviewing qualified health plans. so, clearly, um, we're thinking some of the resources related to the activities of reviewing qualified health plans can, we can leverage the existing resources in states where they already have capacities to perform these kinds of functions. >> but we will charge you. [laughter] >> there's a factual question that's been raised, and it's a certain level of confusion if you don't know what the folks are talking about. the statute says the medicaid

expansion covers people up to 133% of the federal poverty line. severalover our speakers -- of our speakers have referred to 138% of the poverty line. would somebody, please, explain the difference? >> there's a five percentage point disregard of of income that's built into the statute. so you just have to add that on to the 133%, and you get to 138%. >> and this is part of the standardized income calculation that is also new to medicaid? >> rightment -- right. >> very good. um, here's one that has not been raised before so far as i can tell. can employees of a large employer agree in a collective bargaining agreement to enroll as a group or as individuals in a particular plan sold on an exchange?

and why is that important? >> well, i would say if the state decides to expand to allow a large group to come into the exchange, then that could certainly be an option for them to agree to basically purchase on the exchange rather than have a self-insured or product outside the exchange. but that is the decision that needs to be made by the state. >> yeah. brian's right. there is a provision in the statute that defines the 'em l employer size for the small group market is up to 100 employees. a state may actually choose early on to limit it to 50 employees or less. and then later i think it's maybe 2017 -- >> correct. >> -- states can make a decision about whether they want to enlarge the eligibility of larger employers above 100 to actually come into the shop

exchange and shop for and provide coverage for their workers and families. >> there's been a lot of discussion about whether employers will drop medical insurance and expect that their employees will go into the exchange. but, of course, if an employer does that, then they face the penalty if their employees get health insurance through the exchange. but, of course, they would also lose the tax benefits there that are there now which are quite substantial as well as all of the other labor market reasons why employers offer health insurance. so unless you have very low-wage employees, it just doesn't make economic sense for employers to do that, but we'll see what that they do do. >> hi, i'm tom brady with health technologies, we're a technology firm, and earlier in this year you released a bulletin related to actuarial value and cost

sharing. i'm just curious, when you talked about regulations being released soon related to the exchanges and the federally-facilitated exchange if that's going to include cost-sharing details? >> it will. it will include details around the actuarial value determination for qualified health plans as well as the methodology for providing eligible individuals cost-sharing reductions that are provided for in the act as well. >> are that include the re-- will that include the reimbursement mechanisms for the health plans? >> yes, it will. >> okay. thank you. >> mike, i hate to keep putting you on the hot seat, but we'll have you go out in a blaze of glory then. [laughter] >> can you comment on whether the federal government will subsidize states that expand coverage i be up to less than 133% of poverty? >> actually, i can't comment on that, but my colleagues in the

medicaid part of cms, i'm sure, would be happy to talk with you about that. my purview doesn't extend to the medicaid program. [laughter] >> nga has a letter on our web site that we've sent to the secretary asking a very similar question. so we're all anxiously awaiting guidance on that. >> sara? i think we have -- >> yes, go ahead. >> sure. well, first, terrific panel. thank you guys for the discussion, super helpful. my name's frederick, i'm working with the advisory board. we work with about 3100 health systems in the country, so after the supreme court ruling tons and tons of interest from our members about the relative exchanges and the medicaid expansion. we've got lots of providers who are very anxious to find out if their state's going to be a

doughnut hole in coverage for a certain population, so super important. a question to you which is anecdote anecdotally throw the country -- throughout the country, they're reporting that the plan community, the insurance community in their states when they're discussing with them exchange products, the starting premise is that the payment rates for private coverage in the exchange must be set at ped caid payment levels -- medicaid payment levels. and i was wondering if you guys could comment on that. it seems like that's not a very accurate reading of the statute, and also to the extent possible really a comment if you could provide some guidance, i think the provider community could really benefit from that. >> my quick answer to that is i'm not aware of anything in the affordable care act, um, that imposes requirements on issuers of health insurance or qualified health plans and the providers that will actually deliver the benefits. that's a matter between the

health plan and the, and the providers, and i don't believe there are provisions in the affordable care act that actually speak to that. >> and, frederick, i think the cbo -- you should check the cbo assumptions, too, because i think that they assumed a higher rate in the commercial market. >> i pointed that out to people. great point, krista. [laughter] >> i'm sorry, ed, i have to leave. >> thanks, mike. >> can i ask one very last quick question of mike? >> yes. [laughter] >> he's going to be gone though. >> rodney -- [inaudible] a lot of you have asked about specific regulations that they are anxious to see you guys come out with. mr. jost earlier talked about some of the sections of the law that he thinks were self-executing and that you won't need to do regulations. can hhs provide guidance on which sections of the law they're not going to do regulations on so that we're not asking you for them anymore?

>> i think our -- my answer to that question is, um, i don't have a list of what's in, what's out. i think, clearly, we want to address all of the aspects of a affordable care act either as necessary through rulemaking or guidance of one kind or another. so to the extent that there are areas or aspects of the law that are not clear to you or anyone else, um, we should talk about it because we want to make it as simple and easy as possible for people to get answers to those kinds of questions. so, um, we're definitely receptive to sitting down and talking about any questions you have about how we're going to apply various provisions of the law. >> great. thanks very much. >> yep. thank you all. >> if -- thank you very much, mike. [applause] >> if i could respond quickly to the question about

self-executing provisions. as to some of those provisions already there have been rules proposed or guidance issued, so i didn't mean to imply that there would be no guidance or rules on those. however, there has been some discussion about what happens if we have a regime change at the end of the year, and i just wanted to make the point that until and unless the statute is repealed, some provisions of the law will go into effect regardless of who is running the administration. including final rules that have already been issued. so i think we'll have a very interesting situation if that happens. >> and, tim, there's a question here that kind of builds on that same premise. how will federal exchanges be implemented if congress fails to appropriate adequate funds for the purpose? >> i'm sorry, mike just left. [laughter] um, that's an interesting question. a lot of money within cms, and i

assume maybe some of that can slosh around, and, of course, there's already some money that has been appropriated, but that will be an interesting question. >> krista? >> so in the appropriations question i just want to distinguish between the administrative costs and the cost to actually build the exchange because the costs to build the federal exchange is appropriated in the affordable care act. so until january 1st of 2015 there's a lot of, essentially, an unlimited amount of money that could be put into building the federal exchange. the appropriations comes into play for funding staff at cms, so just want to make that distinction. >> it's a question for brian webb. can you elaborate on what states are doing with respect to regulating outside the exchange market? a lot of activity or not much at all? you mentioned open enrollment. are there other major areas of concern? >> there are a lot of areas of

concern, and right now the neic is developing model laws, model regulations. we've done white papers addressing issues such as adverse selection trying to, basically, educate people on that relationship between inside and outside what states need to do for the entire marketplace regardless of whether it's an exchange or not. so we hope to have by the end of the year the model laws that states would need to adopt early next year to put into place all the 2014 market reforms including that will be some guidance on some other items they may want to do in their marketplaces in order to avoid adverse selection and things like that. so that's been the place where we typically kind of develop those proposals, and those will be developed by the end of the year, so -- >> i'll just add to that, too, on your materials list there's a paper by kevin lucia and colleagues at georgetown where they looked at the

implementation by states of the earlier market reforms, the 2010 reforms such as bans on rescissions, bans on lifetime benefit limits, and the striking finding of the report is that nearly all states had moved forward to implement those, those rules into their own, um, either state laws or issuing regulations or subregulatory guidance. and i guess my question, um, for brian, too, is given that sort of significant compliance and action by states across the country, um, what that says about the 2014 reforms if states are going to move assert ily forward -- assertively guard in the next 18 months on those. >> we certainly hope so because there is that kind of hammer out there that if the state doesn't do something to enforce those reform, then the federal government will have to. and there is not a department of insurance in america that would want to say, no, we don't want

to regulate this. we did have -- now, i'm from california, i worked for governor wilson at the time that hipaa came down, and california was one of the two states along with missouri that said we're not doing hipaa. and cms san francisco had to enforce hipaa in california. but that was such a small area, such a small item compare today what we're doing now that the states, talking to the commissioners, they don't want a situation where they're not in control of their marketplaces and where what they're doing on review is kind of pushed aside. so we think they'll get there. >> there's a question here, actually, several questions on this topic and fortunately, we have anticipated it by putting materials related to this question in your packets. some legal scholars are making the argument that the aca does not provide for subsidies in a

federally-facilitated exchange as opposed to a state-run exchange. would anyone on the panel like to comment on this argument, and if you assume that the courts were to agree with that argument, are there any work-arounds that you can think of? >> i would like to respond to that argument. of. [laughter] i have responded to that argument at length on the health affairs blog and my comments are included in the materials. the problem here is that, um, at several points in the statute language was picked up from the senate finance committee bill in the final senate bill that talks about premium tax credits being available to enrollees of, in plans established, let's see, enrolled in plans through exchanges established by the states under section 1311. that language is also used in other places, for example, the medicaid maintenance provision

also applies until exchanges are established. so you have to take the bitter with the sweet on that one. but the argument is being made by some people that that means premium tax credits cannot be made available through the federal exchanges which are established under section 1321. if you first look at the legislative history of the bill, you can see that the congress never intended that the exchanges, the federal exchanges would operate any differently than the state exchanges. and if you look at the language of section 1321 itself, it's clear that a federal exchange effectively becomes a state exchange in states that elect not to establish a federal exchange, a state exchange and has all of the power and authority of a state exchange. also the health care and education reconciliation act which amended the affordable care act after the act was adopted and signed explicitly refers to premium tax credits being provided through the

federal exchange. so the language of the law could have been draft better. as we all know, nobody intended this bill to become the final law. it just happened that way because of the massachusetts senate election. but if you look at the legislative history, if you look at the structure of the act, if you look at the language of the statute and certainly if you look at the reconciliation act, it's clear that premium tax credits can be provided through federal as well as state exchanges. the other question, however, is what happens if somebody decides to sue and challenge that? the only plaintiffs that i can see out there that have standing to challenge it would be employers who would have to pay penalties because their employees received tax credits through federal exchanges. but the statute explicitly refers to the exaction that is placed on employers for if they

don't offer health insurance or adequate or affordable insurance and their employees go into the exchange. that's explicitly referred to as a tax, and all of us remember from the supreme court case that one of the big questions there was the tax anti-injunction act and whether that applied. it clearly would apply under the supreme court's reasoning to this provision which means that it would be 2015 probably before any employer would be able to even get into court to challenge premium tax credits being issued through federal exchanges. so i think it's, it's clear to me that in -- and this, by the way, was also the position that the cbo took in its report last week that premium tax credits would be available through both the state and federal exchanges, and that's the position it's always taken. and as one of my colleagues has said, congress people may not pay much attention to what other people are saying on the floor, but they do pay attention to what the cbo says.

so i think when you put all of that together, the argument is overwhelming that premium tax credits will be available legally through the federal, federally-facilitated exchanges. >> tim, if we can take advantage of your prof sore y'all expertise in one related question, there has been an assertion that because the supreme court has labeled the penalties as taxes that the law is unconstitutional because it didn't originate in the house, and the house by constitutional edict is required to be the originator of all tax legislation. how's that grab you? >> my recollection is that the bill did originate in the house. and that the language was substituted, the senate language was substituted into a house bill. but i could be wrong on that. but that's my recollection. and in any event, i don't think

the supreme court wants to do this all over again. [laughter] i think they made it clear that what they thought on this legislation. there are, of course, other questions out there like whether the ipap is constitutional or whether the ban on medicare to hospitals is constitutional. but on the basic question of the constitutionality of the statute, i think we've heard the final word from the supreme court. >> okay. sara? >> this is a question about, um, the differences in the shop exchange or the small business, small business exchanges and the individual exchanges. each state will operate two different exchange. they can merge those into one, so this question, um, are there -- can you speak about the differences in administration and enrollment when it comes to the shop exchanges compared to the state--run and the

federally-facilitated individual exchanges? >> well, there are significant differences if how people will be accessing coverage in the shop exchange because, obviously, in the individual you're coming as an individual or a family. you're accessing coverage for yourself. in the shop exchange, there's going to be some options available where you have an employer involved, the employer can come to the shop exchange and say, well, i'm going to allow all of my employees to choose from a particular level of coverage. so everybody can choose from the silver coverage or the bronze coverage or something to that effect. and then let 'em all choose. we believe most states also will allow employers to come in and just choose a plan. and all their employees would get that plan as an option to them. also, obviously, there's not the individual subsidies available. instead there are tax credits available to the employers that

are limited in time and amount, but there are those available rather than the individual. so it's really a different dynamic coming in. you're administering, you're not looking at each individual's income and coming in and trying to determine whether eligible for medicaid, whether eligible for subsidies. you are instead looking at them as a group coming in and how does that employer want to kind of access coverage through that exchange and let people make their choices? so it will be administered differently although i don't know of any states who are out there creating two different boards, one for shop and one for individual. not creating too different vendors. all that kind of back room stuff will probably be the same people. but as you access it will look differently, and they will ask you different questions, and it will be different administratively in how you get coverage and sign up. and maybe even different options in what carriers you have available and coverage options, too, as they are now. >> just to follow up, so a key

question that states are looking at in establishing their exchanges is whether to merge their individual and small group markets. >> right. >> most deciding just to wait and see and study the issue, and i wondered -- >> yeah. people looked at massachusetts. massachusetts did that. they combinedded their individual and small group market. but people have to remember they had already done a tremendous amount of reform in their individual market. so that wasn't a big shock to that system. in most state just the fact that we're putting all these new reforms in the individual market will be a tremendous shock. so then trying to combine that with this kind of group of unknown people, how healthy they are, we have no idea how effective the individual mandate is, how effective subsidies -- saying to the small group market we're now going to bring this gripe in together with you. most states are not going tood that. we'll let that play out, and then maybe in the future, we don't know, they may make the same decision as montana, they may not.

as massachusetts, they may not. >> this questioner observes that tim jost had said that states that haven't yet taken executive or legislative action to create an exchange have probably missed the boat. and this person would like to set the over slshed under at 19 exchanges and ask what the panelists think about that. would you take the over/under? >> over. >> more than 19 will have them? krista, what do you think? [laughter] you have to admit -- >> i'm not a betting woman, sorry. [laughter] >> i think we're going to see a lot of different approaches taken, so if we're counting partnership exchanges, then probably over. if we're looking at strict state-run exchanges with no

federal involvement, maybe under. but it remains to be seen. but if a state waits until a lot of states the legislature's out of session, and if the executive doesn't have authority to do it by itself, you're not going to be able to vote in the spring of 2013 to establish an exchange and have one up and running. >> and to add to that i also think, too, as states are running their exchanges and they've gotten them underway whether that will have an encouraging effect on other states to jump in when it becomes more clear how these can run, um, what the different options for states are, um. as, again, in your packet you'll see just the bare outlines of what states have established, their exchanges are doing right now, and it's striking the amount of discretion they have allotted to their exchanges to

make key decisions about how they're going to run in the next two years. >> there were at one point a number of states talking about collaborating with each other and sharing some of the common functions in a way that would be able to realize some economies of scale. are those continuing, or are they growing? have they withered, or is there any result that might be helpful there? >> yes. those discussions are still happening. for sure. there's a lot of interest in, um, whether one state could conduct the back room operations of another state's exchange. >> okay. >> and there was an early innovator grant for a group of new england states working on technology together, so there may be different ways in the which states can work together. >> okay, yes, carl. >> carl polzer, american health care association. my question goes to consumers, like a year from now they're thinking about going to the

exchange, resources for counseling and education, so they're going to have to be making complex decisions about potential individual penalties if they're uninsured. the affordability of their employer-based coverage and the affordability of exchange coverage or if they're eligible for medicaid. and a lot of these folks especially in the parts of the market where it intersects with employer-based coverage where there's low-wage workers, they're not very literate with their health benefits. so do we have resources for that? seems to be a large, you know, need for that. >> um, yes. one of the objectives very soon here will be to start developing the education programs for navigators, for agents and brokers especially in small business. most of them use agents and brokers as their primary educator. because they need to know what they need to tell people, they need to know about the new medicaid rules because they're going to run -- there's a lot more of those.

they're going to need to know the subsidies, they'll need to know kind of the exchange versus outside the exchange, what option os are available. they'll need to know, frankly, why are rates going up or down based on the rating rule changes. so we are in that process. we have a meeting in atlanta coming up where we're going to start that process of developing education materials for them, for consumers, even the consumer of people within the departments so they can be well educated as we can. as we saw with massachusetts, it takes a lot of effort and, frankly, a lot of resources to get people the knowledge they need to make the right and good choices. so it's a point well taken, and people are working very hard on that. >> i would just follow up with maybe a question to tim just to elaborate on the exchanges are envisioned as a central place where people will go to and find out about their range of

insurance options available to them, whether tax credits, whether medicaid, whether the children's health insurance program. so the question is, a key implementation issue, is whether the state exchanges will be able to assess eligibility for both the premium tax credits and medicaid and eligibility through the medicaid program and how that process moves forward in a seamless fashion so that people are immediately enrolled in the affordability programs that they're eligible for. and tim has written a little bit about the rule on this from hhs, and there's some questions about whether the exchanges can enroll people who are eligible for the medicaid program. >> well, the way in which the rule is written the exchange will either at the state's option be allowed to enroll people, or they'll be able to do an assessment and then refer the individual to the state which will then do the enrollment. i think the presumption is that

since the eligibility is going to be based, well, in states that decide to expand on a percentage of federal poverty level and that's relationship to modified adjusted gross income that this is going to be a fairly straightforward determination, and if the exchange determines eligibility, that should pretty much decide it. but this is going to be a very different way of doing business than medicaid programs in many states have been accustomed to. and so it is going to be a new experience for everybody trying to do this handoff. the hope really is that you'll be able to do realtime determinations of eligibility for the premium tax credits for medicaid, that people will be able to go on to the web or go into wherever a navigator is

located and, you know, a half hour later come out enrolled in an insurance plan with their eligibility determined. whether that will take place all the time, probably not. there will be some complicated questions, but that's the goal, that's the hope and that's where we really need to get. >> and i've heard john kingsdale talk about the patient-friendly experience, the consumer-friendly experience that they were working to establish in the massachusetts connector which is, i guess, the only fairly elaborate exchange operating as opposed to just an informational function in utah. and i wonder if that would give you some optimism about the ability to provide that information in a useful way in a lot of other states.

>> yes. [laughter] >> i guess that came out awkwardly, i'm sorry. >> because there you don't have all of the, i mean, the federal -- well, the exchange will have more functionality than the massachusetts exchange does, but it is very impressive. i saw john mcdonough in a meeting like this a few months ago go through the whole enrollment process while the clock was running for a hypothetical person and, hopefully, that's the way it's going to work a lot of the time. >> and i guess a takeaway, too, from massachusetts is their coordination early on with mass health, medicaid and children's health insurance program, so there was a great deal of interaction, coordination with that in terms of how to enroll people based on the experience of mass health in that state. >> one thing, by the way, that i haven't heard too much about recently, but starting in september health plans are going to start -- and employers -- are going to start issuing the

summary of benefits and coverage that hhs issued a rule on earlier this year based on work that the neic did. and i think that's going to lay some very important groundwork for the exchanges because for the first time anybody who applies or enrolls in, is shopping for an insurancplan will be able to get a four-page -- although they interpreted that to mean double-sided -- so now an up to 8-page summary of all of the important features of the plan that will be exactly comparable plan to plan. so you're going to have something that works like the nutrition labels on food cans or mileage labels or efficiency labels on appliances. so consumers will actually be able to intelligently shop for health insurance. there have been surveys that show that people would rather go to the dentist and have a tooth pulled than shop for health insurance. but in any event, it's going to make it a much more

consumer-friendly experience, and that's going to happen a year before the exchanges open. so we're going to start having some, something of a glide path into the exchange experience. >> yes. >> first of all, thanks for putting this together. my name's james williams, and i do some work with rocky mountain health plans. and this is a question for brian, and this is around nondiscrimination protections in the exchanges. um, hhs puts some pretty landmark guidance and rulings coming out around protections on sexual orientation and gender identity in the individual and group exchanges, and i wonder how the exchanges particularly from a state insurance commissioner perspective is planning on handling any complaints or courageousness from insurers who actually aren't following those protections within their plans? >> that's not something we've discussed thus far. we can certainly do that. i mean, generally, the case is

any kind of complaint that would be a violation of state or federal law they would be taken very seriously, they would talk to the company. if there's a pattern of it, they would take action against them and would have authority under their license to fine them, etc. so a lot of things they can do to a company that's violating those laws. so, um, i'm sure all d.s would take that -- all d.s would take that very seriously. >> and do you see that as a question for the insurance commissioner or the office of civil rights? do you see where that lies from a jurisdictional perspective? >> well, it would be department of insurance under the contract of making sure they're complying with all the rules and regulations. obviously, if it fold z over into an actual civil rights issue, you can get your ags involved as well, and that often happens. >> with thanks. >> got a question that was actually raised in a newsletter

that i read a couple of days ago , um, asking what the panelists' thoughts are about the possibility of low income people relocating to states that do expand medicaid from states that don't. ..

in that state exchange or maintain their coverage. >> health insurance is different than a lot of insurance because it is so tied into your networks, and coverage where your ads so by moving across state lines, moving from kansas to missouri, and we go from d.c. to virginia or something like that but if i'm moving from my roaming to the connecticut i would change my insurance. and there is the ability to do that where you get a special moment to go in and change your coverage and choose coverage. is the important thing is all a guaranteed issue so people can

make the choices necessary so they won't have those gaps in coverage like they have now all too often. >> we have got just a few minutes left and i would ask you to pull out the evaluation form and fill it out while we are finishing and there is someone at the microphone. thank you sara. >> good morning. an article came up in the paper about a child being cast out of school and in fact suspended because he was -- he had diabetes and he had to get a certain shot or whatever in the person i was supposed to do it was out that day. will does insurance cover a situation where we can put more -- put the nurses back in our public schools? >> isn't up to the council? i guess it would be. >> there is funding in the bill

for school-based health care programs and that unfortunately is part of the legislation that i have not been following very closely. i don't know if anyone else here has been. i mean certainly people with diabetes are going to be among the very big beneficiaries of the bill because they are people who often find -- have a hard time finding affordable health insurance in the individual market of this point but how they address that particular problem i don't know off the top of my head. there is a provision in the bill for school-based clinics and i thought i saw some rules on that sometime back. >> and i expect that is one of the parts that is not fully appropriated in the act itself subject to annual appropriations but i could be wrong. >> we had a question here that is originally to be asked of

mike hash but actually comments about the premise of the question are just as aptly directed to our panelists here. the original question was what is hhs's plan for the federally assisted exchanges if states resist any cooperation with hhs on any functions, and the question is how likely is that in any state that we have folks with good relationships and good intelligence about what a whole lot of different states are planning. anybody planning to stonewall this? >> i will just give you the facts. there is a provision in the statute that essentially requires some cooperation but the penalty for not cooperating is your existing federal match, which could be argued now is --

so there is also a provision in the advanced planning documents that states at least 45 have entered into with hhs, around the 90/10 match for their eligibility system medicaid that there needs to be cooperation between the medicaid program and whatever exchange is interstate whether it's state or federal, so that is an agreement between the state and the federal government, really to that 90/10 money so i don't know if the strategy has been outlined that provision is out there. >> uncertainly at the state decides to stonewall and say we are not going to help facilitate exchanges and not give any information that leads them no alternative except to pass the companies to self-certify that their license show something, show something from the department is says they are solvent and then to have the

facility exchange reviewing their forms, feeling their rates and making sure, and that just puts the company in a tremendous bind. it's going to take a lot more time to get things up and running. you'll have a situation where the federal government will say well we think that rate is okay in meets the standards and the state may say no comment doesn't. we are not going to allow it in our state and this may cause real for problems that there is no communication and no consistency and all it is going to do us harm the companies, increase cost and it's going to hurt consumers too so they will be confused about what's available or not available. so people understand that ramification, so hopefully we won't have any of that. we will just say it's completely stonewall. >> yes, had a question about undocumented immigrants and some of the states that have thus far said that they're not going to participate in the medicaid expansion. what effect that is going to

happen some of the teaching hospitals that are really dependent on the dish payments and maintaining a high ranking, getting really good residence and all of that, if those governors are getting any pressure that you know of, to go ahead and -- and expansion. >> pressure? governors? every hospital association in the country which includes i believe almost every hospital in the country submitted an amicus brief in support of the medicaid expansions and i think they all understand that they are going to be in a very tight situation if the budget cuts, or excuse me, the medicare cuts go through, and particularly the cuts in the dish payments and their state decides not to participate in medicaid. medicaid doesn't pay all that well but it's better to have something than nothing. and i expect the governors are

hearing from their hospitals. >> thank you. >> specifically with respect to undocumented however the bill of course has not been -- yet. >> i know i have seen one estimate that the remaining uninsured population, that the aca has fully implemented, would include maybe 25% on documented so there are a lot of people who will not be covered, who are not undocumented immigrants. if that estimate was right, and we certainly have heard from public hospitals that the programs we have done about the potential implications, the phasing down of dish payments and one estimate is that texas already receives about $1 billion a year in those payments and with the 50 or 60% reduction over time that is certainly going to have an

impact on a lot of those hospitals. >> thank you so much. >> i didn't mean to take the last word. sara. [laughter] but we are just about at the end of our time. thank you for hanging in there. i will remind you there will be a webcast available on kaiser family foundation's web site on monday, if you turn on c-span over the weekend. you might see a rerun of the live coverage that we had today. i'll take this opportunity to thank the commonwealth fund for its co-sponsors support and the contribution of sara collins to the erudition of the panel and ask you to help me thank the panel for a really useful discussion. [applause] [inaudible conversations]

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[inaudible conversations] we will have more live coverage this afternoon with remarks from former president bill clinton who is addressing the weeklong international aids conference here in washington. live coverage starts at 4:25 eastern here on c-span2. earlier this morning at the white house president obama signed into law a bill strengthening u.s. israeli military cooperation including missile defense and intelligence. last week congress passed the legislation with broad bipartisan support.

>> i just wanted to welcome these outstanding leaders to the oval office. i want in particular to acknowledge congressman howard berman and senator mark foster who have done outstanding work in shepherding through this bipartisan piece of legislation that underscores our unshakable ties with israel. as many of you know i have made it a top priority for my administration to deepen cooperation with israel across the whole spectrum of security issues, intelligence, military, technology and in many ways what this legislation does is bring together all the outstanding cooperation that we have seen really at an unprecedented level between our two countries that underscore our unshakable

commitment to israel's security. i am also very pleased that this week, we are going to be able to announce $70 million in additional spending, $70 billion come excuse, excuse me, in additional spending for iron dome. this is a program that has been critical in terms of providing security and safety for israeli families. it is a program that has been tested and has prevented missile strikes inside of israel. and gives testimony to the leadership of the folks sitting here that we are going to be able to login that funding to assure that program continues and that we are standing by our friends in israel when it comes to these kinds of attacks. let me just close by saying that the tragic events that we saw in bulgaria emphasize the degree to

which this continues to be a challenge, not just for israel but for the entire world, preventing terrorist attacks and making sure that the people of israel are not targeted. and i hope that, as i signed this bill, once again everybody understands how committed all of us are, republicans and democrats, as americans to our friends and making sure that israel is safe and secure and leon panetta, our secretary of defense, will be traveling to israel to further consult and find additional ways that we can ensure such cooperation at a time when frankly the region is experiencing heightened tensions. so with that, let me sign this bill and again i want to thank all but who -- better standing beside me for their outstanding leadership and outstanding work on this issue.

i will make sure i am using enough pens and that everybody gets one. there you go. good work. >> thank you mr. president. thank you so much. we look forward to it. [inaudible] >> thank you so much. thank you, guys. >> have a great weekend. >> president obama earlier today signing a bill reinforcing the commitment to security cooperation between the u.s. and israel. presidential challenger mitt romney is heading to israel next week as part of his three nation overseas campaign swing. he's in england this week meeting with some of the

country's top officials there. he will attend the opening ceremony of the land and olympics. at the brookings institution earlier this week campaign advisers for president obama and former governor romney took part in examination of the two candidates foreign-policy differences. they discuss the violence in syria, iran's the ear program, asia-pacific relations and national security leaks. this is just under an hour and a half. >> good afternoon ladies and gentlemen. welcome to the brookings institution. a special welcome to the other crowd in the other rooms. we are very glad to have the opportunity this afternoon to host a special conversation

about the foreign-policy approaches of president obama and governor romney, his presidential challenger. i am market indyk the director of the foreign-policy abrogating's. we have for a long time wanted to host both president obama and governor romney to give their foreign-policy speeches here at brookings, for reasons that will probably be clear to you, they both gave their foreign-policy speeches or at least their initial foreign-policy speeches at another venue, the veterans for foreign wars. i'm not sure why they preferred that venue to brookings but they did. in the last two days, they have both outlined parts of their foreign-policy and of course, as you probably all no know governor romney is embarking on

a foreign trip on friday which will take him to london and then to jerusalem and warsaw. and so, we thought it was a particularly appropriate time to have a conversation of the debate between representatives of the obama and romney campaign, and it's in that spirit that we are delighted to welcome both michele flournoy and rich williamson. michele is probably known to you because she served from the beginning of the obama administration through february of this year as the undersecretary of defense for policy, where she was the principle advisor to the secretary of defense in the formulation of national security and defense policy.

and in that capacity led the development of the defense strategic guidance. michele is well-known to us here at workings and has appeared many times, both when she was an administration spokesman for the senior defense department official and also in her previous capacity as the co-founder of the center for a new american security, a new think-tank that is doing excellent work in the field of developing national security defense policy. she has served in previous administrations as the principle deputy assistant secretary of defense for strategy and threat reduction and she is now chair of the national security advisory group of the obama/biden re-election

campaign. rich williamson, ambassador, is a nonresident senior fellow at the brookings institution, now on leave, to the campaign for governor romney. he founded the -- recently founded the salisbury strategies group in chicago. previously he had a number of distinguished responsibilities in both the reagan and george h. w. bush, and george w. bush administrations, first as special assistant to the president and deputy to the chief of staff, and in the white house as assistant to the president for intergovernmental affairs. his many diplomatic posts have included ambassador to the

united nations offices in geneva, system secretary of state for international organization affairs, and most recently, as president george w. bush's special envoy to sudan. he is also a longtime member and i think now vice chairman of the board of directors of the international republican institute. so, we are very glad to welcome both rich and michele to this podium. brookings prides itself on being a nonpartisan think-tank and it is in that context that we are hosting this event today. our moderator is a guest scholar at brookings and former chief diplomatic correspondent for cbs and nbc news, former anchor of the nbc "meet the press"

program, and also most recently of the haunting legacy. marvin kalb and it's my pleasure to hand over the podium to you, marvin, to conduct this. >> thank you very much, marvin. i assume that all of you are foreign-policy fans and you all realize that this is our moment in the sun for this 2012 presidential campaign. i don't know clearly how long it's going to last but let's take full advantages of it. like all of you i am sure, red both the speeches, the governor speech and the president's speech and what i'm going to do is just sort of run down major highlights and ask you questions about it. starting with iran, and every now and then when i think about iran and then i listen to the governor and the president, i ask myself, what is the real difference between the two, because they both want that iran

not have nuclear weapons and they're both sort of inpatient that's the president has gone on for this long. let's assume for a second, rich, fat governor obama -- governor obama, get that. [laughter] that governor romney is elected in november and a president romney takes office on january 20 of next year. would he in his impatience to get this process moving, cut off the negotiation and begin more seriously to consider a military option? >> while iran is an important issue and i have got to respond with a little bit of context. it was four years ago this month that in israel, senator obama gave an important speech about the middle east and identified iran as perhaps the most growing threat to international security in the middle east. we are more than three and a half years into the obama administration and irrefutably

iran is much closer today than they were three and a half years ago, so whatever the strategies are, they have failed. and governor romney has made it clear that the nuclear iran is an enormous threat to the u.s. security, to our friends in the region, and needs to be addressed. >> and essentially unacceptable, is that right? >> unacceptable. he wholeheartedly and yesterday he -- consistent with the security council resolution of zero enrichment, a suspension of enrichment. >> but that hasn't happened up to this point. >> do you know why? in our opinion as bismarck said, diplomacy without the threat of force is music without instruments. there is no credible threat or force. no one in tehran or in the

region feel the obama administration will use force. for example, they legitimately wanted to pursue a policy of engagement, which contributed to a muted response to the green revolution when the innocent iranians were being beaten and arbitrarily arrested and killed. ..

that message to tehran is okay, we can wait until they moved. they keep moving the red lines. >> that would be unacceptable to romney. >> that would be unacceptable. >> would be also be impatient to get the process moving and this they are moving, move towards other option. >> he is not taken it off the table. if the next message is depressed and it gave a at aipac. i've got israel's back. going to have use of force on the table. the next day, republicans including governor romney made reply or gave their position. the day after that, president upon the said those republicans are too militaristic. derek has been aware. which is undercut what they said

this inconsistent messages from the administration on iran. >> okay, we got the message. >> and hopefully tehran will. >> michele, what is it a rich set about a perception out there in the middle east. number one, do you believe there is a perception that the president not choosing to act militarily? and psychic, in light of what rich said, what does it do you think obama administration we elected what to do? >> okay, i don't share which is characterization. i'm sure that's really surprising to you, i'm the president characterization on this. this is a president who is careful about what he says and does what he says. you can track that is iraq policy, al qaeda policy. he was very careful when they chose the work he uses with regard to obama, that we must

prevent iran from gaining a nuclear weapon. a nuclear wind is unacceptable. >> he also said he doesn't blast. >> so that is the policy. i think the policy -- i strongly disagree that reject the notion that policy has failed. the truth is we went through a policy of engagement because first you have to give it a chance. secondly, the only way is the effort to pressure iran, so we went or a period of engagement and got a very disappointing response from iran and that set up the possibility to getting u.n. sanction against iran with russia on board and that set up for their actions for the e.u. to take steps, nations to stake tabs and today we have the most

serious sanctions ever put in place against any country in the face of the earth, including sanctioning the oil projects, central banks and so forth. some of those effects are still to be filed because some of the most recent round of sanctions just started in july. so that is still to be wholly felted tehran. at the same time, you had enough or to negotiations. everyone has been disappointed with the ukrainian response. the president has been cleared the military option remains on the table. he's never taken it off the table. having come from the pentagon, the planet on its robust, read the comments there as an option. you look at our posture from the region. it is very strong and well positioned. so the military option is real. the president's judgment is now a snack at the time because there is still a chance with further sanctions fighting for

tehran to change it counter. >> how long does the president, administration election week and give negotiations a chance? >> the key is we have to ensure iran is not able to enrich material to actually get a weapon in. i think that is what the intelligence community is watching very closely, their judgment is that we do still have time on the science of a breakout would be visible. they testified on the hill a year or more at a minimum. >> let us jump ahead to syria, which is another urgent issue here. we've got to do a lot of things. >> asked a question about iran later. >> is deicide reshape use chemical weapons in any way against its own people, can center national forest moving in, will be a bomb not

administration use american military power to stop it, will the upon not administration use american military power to stop it, will the upon not adinistration use american military power to stop it, will the upon not administration use american military power to stop it stand on that issue. that is going to be his decision obviously worn out going into hypothetical. it's on a repeated basis either inside syria and transfer to any elements like al qaeda with the unacceptable and the syrians involved would be held accountable for that. i also know that this has been a topic of extensive with neighboring allies whose neighbors in syria who say what would we do and how we plan and prepare that contingency be ready for it. i bet free confidence is taking the threat very seriously and we take the appropriate steps. >> that includes israel and that

discussion. >> ridge, governor romney said they support the syrian ruppel's spirit world way. what they played weapons to the rabble's spirit did they know who the rebels fire, if there's a possibility the weapons could end up in the hands of al qaeda? >> governor romney has been clear and has had a different approach from the president to syria. now, into the 17 months, 17,000 people have been killed. the rhetoric has just decided that the action, looks pretty high low from what happened in syria. over a year ago, governor romney said we should be using our resources to work with the opposition to try to identify moderates come out dvorkin as for some of the things we've done in other spots.

the administration recently has been telling reporters in having stories about how five weeks ago we began to work with the opposition, which is great. but his 15 minutes played in a year after governor romney said we should be leaving. thank income he said we should be willing to arm the moderate opposition. we don't know that they are now because there's a vacuum that al qaeda and others have come in. >> did we know he chirico that they were? >> you don't know if you don't talk to them. they didn't send cohorts to come in like we did in other parts of the world. we are where we are. the point is leading me to engage in an issue like, one that is according to centcom commander, the biggest strategic low we could give to iran is a set aside leaves. it is strategically important to the soviet union to say nothing of the humanitarian crisis. again, the brad drake in libya

is shown to be hollow within the context of syria and should neighbors the area like turkey, jordan and israel. >> so the u.s. under president romney if he were president now providing american weapons is correct. you would be provided. >> he would be willing and support arming of moderate factions within the opposition. >> what about between american forces on the ground to look after the army of the rebels? >> you know, senator mccain and lindsey graham and others have called safe havens no-fly zones. governor romney has not done that. >> you agree to that? >> he has said that's not his position, but he feels we should have been and should be a arming the opposition, but importantly we shouldn't be leaving from

behind. we should have been in there, hutterites is trying to identify and work with the opposition. >> the administration has been working with the opposition for many, many months. not just the past five weeks when it came out in the news. but it's been working first and foremost providing humanitarian assistance and medical supplies. most importantly in my view, helping them gain greater cohesion, working with political opposition to develop a platform to develop a syria derive transition plan and this is crucial because you have to have a series of cases. how will change have been? the way change will happen in syria is if you get parts of the under circle around a side to begin to do fact? to do that they need the assurance they can be part of a future syria, that they could be part of a new steering

government. so it's very important to use that from a political opposition for them to really feel the things that minority rights would be protected and so forth. working political dimension that the most important piece and that's what this administration has been focused on from the get-go. >> lube onto his roof for a sec. i want to ask you, when the president went to cairo in june of 09 and delivered their very important speech to the arab world, is there any thought now that he made a mistake by not at that time going on to jerusalem, which after all is a 40 minute away from cairo? >> i think when you judge a president's commitment to israel, you have to look beyond the itinerary. the truth is, does anyone criticize ronald reagan and his commitment to israel? he never went to israel. does anyone criticize george w. bush? he didn't go to a second term.

what does this administration actually done for the state of israel. they have increased security assistance bubbles to historic levels. it's never been higher. we've added on top of that funding for this citizens against coming from gaza. we have stayed at baghdad, vetoing resolutions that were trying to condemn israel. >> excuse me, but why is there still the move, the feeling, the stories written that the relationship between president obama and prime minister netanyahu, for example, are so tense and strength? >> is a good question because there's a lot of plain politics and this is an issue where we've always had bipartisan consensus. i did bring one card of quotes because it's important to hear, what do israelis think about the apartment ministration in their

policy? this is from prime minister netanyahu. he said there's one thing that stands out clearly the middle east it is that israel and america stand together. that ehud barak said he's the obama administration gives backing to israel's security and wide all-encompassing and unprecedented tanner. then perez went to say never has the means of security then better matt today than under president obama. those are israelis talking about the relationship. >> point understood. >> the governor yesterday in a speech at the veterans of foreign affairs these president obama of treating in a shabby way and adding his voice to the u.n. chorus of i.d. card accusations, that's an insult against israel. no but would specifically a president romney do to advance the israeli-palestinian

negotiations? >> first, let me respond to some in the shell cover it because it's important to put contacts in your question. the very fact that michele pulled a three course in israeli shows the defense admits that the obama administration on the relationship. second -- second, when romney -- if you have other posts of other countries i'd be interested, but i think that says something. secondly, when our itineraries announced to the campaigns that this is just a gimmick going there, but obama will do it in a term. the obama administration is quite a dead as previous administration. it is not existed. dealing with chiron the vice

president of the united states within 90 minutes because he was having a temper tantrum. you don't treat any head of state outlay, let alone your friend. >> i'd like as not to go through the political language excessively. we do read the papers and understand that. my question has to do with romney as president. what specifically would he do, because come advanced to the palestinian to move forward. >> the first part of something you've made in the decades, something that ambassador has done and has worked in the clinton administration and afterwards. the united states can't want this worst of the parties. you have to have respectful dialogue, which is why governor romney will be meeting with

palestinian leaders. you don't go public on a negotiating position before you talk to one of the parties who you say is a friend. but it's a difficult problem. anyone who does, either as not spending the time you and others in the middle east have, or has a different agenda. it's very difficult. you have to continue to work for it and continue to try to work to manage that tense situation so there's less friction, less violence, less clashes. >> will governor romney, while he is in israel this week to the last of their knowledge be discussing with prime minister netanyahu the idea of a joint american israeli operation in syria are against iran? >> is a good reporter's question lawgiver response to someone who's been a government. the two principals have the discussion they have the multisided wants to go public.

>> okay, we'll go without. >> we've all read widely from personal experience that president obama is described as being extremely disturbed, concerned about the possible disintegration and he says what to do with these weapons? i'm wondering first of all if the description is accurate. and that will follow a. >> yes, the united states is and should be concerned with the fragility of the government governing situation in the state of pakistan. you know, you only have to look at what happened on the civilian side and some of the dynamics between the civilian side in military to be concerned about the lunch term future of pakistan and its democracy. >> is that the reason why it he thinks about the future of

afghanistan would like to retain a force of some 20,000 american troops in afghanistan, just in case something dreadful would have been in pakistan? >> with the president talks about a follow-on force of much smaller force in afghanistan post-transition from a post-2014, that force is really focused on continuing to train and work with the afghan military said they reach capacity in pursuing joint counterterrorism operations in the region. it is not a force directed at any afghanistan neighbors. >> i don't mean it as directed against. the force will be there in afghanistan in case the neighboring pakistan, the government disintegrates in the question of who controls nuclear weapons arises. >> that's not been rationale

thinking about the follow-on footprint in afghanistan. what i will say some good ministration, republican and democrat had been seized and can turned about the safety and security of pakistan. and they have worked on this issue in the situation has improved somewhat over the years. >> what you mean by work? >> i do want to save more than i can, but there've been cooperative efforts to improve the situation. the thing that worries a lot of people as some of the rhetoric coming out of pakistan and plans in terms of growing arsenal. and i will be development. governor romney now seems to accept the president's 2014 deadline, which jerry the primary season he did not. quoting a speech yesterday, he now seems open to that.

so why the change? >> position on 2014 was last fall. so what was there, but he's been critical of the president about political consideration impacts on the ground in he's been concerned that our military leadership has not been in support of the cia tractor. it is enormously difficult between the intelligence, it's a barely functioning state. they've got nuclear weapons extremely dangerous and there's no simple answer and the governor understands that. he has that with respect to tolerance in the western region of taliban forces. we look at conditionality firm for any, but that's pretty much what disposition has been on

pakistan. there's a lot of merit to it and allow governor romney understand. if you're going to give, continue to give the aid to pakistan which is well over a billion dollars a year, the tolerance of god allowing the taliban and other factions to work in the western mountains to kill americans >> well, i wouldn't use the word conditionality per se, but the discussion with pakistan after they took some steps to close

the ground lost communication for supplies and so forth as a sort of work our way back towards a more cooperative relationship with the united states in this administration has been clear about the areas of cooperation we need to see to be able to continue to move forward with assistance and support. starting first and foremost is counterterrorism and things related to the safety of our troops in afghanistan. >> moving on to russia and our relations. michele, governor romney seems very upset with president obama's reset policy to russia. the governors described russia i believe is the number one global flow of the united states. first of all, what do you think of the governor's criticism? >> it misses president obama's been clear if we want to have a cooperative relationship with russia and strategic interests

align. where we have differences with president bush to work through those. we will not sell another series of influence and none of that. the new start agreement, another step in arms control techniques the world safe her is a very positive develop and with broad interests in supporting the congress. cooperation to transit horses and supplies to russian territory to get to afghanistan, very important. very important political cooperation. russia agreed to stop supplying iran with some of the sophisticated weaponry. these kinds of cooperation site worried that if you took this

approach to this political post that you will lose a lot of american interests. >> both of you starting with rich, do you think that it was possible in russia, starting with putin, the arab spring lake popular uprising? >> it's been an authoritarian drift in russia during the last three and a half years. but he was at stanford and bush is too soft and didn't get enough where you are. they were willing to say was that free and fair election. he was an it past the further

squeezes society. a law that tries to outlaw independent political parties in the process. you have russia with all due respect, who has been a lifeline in those syria and in casa trent on iran. when i was president special envoy yesterday, there were things we couldn't get through the u.n. security council and sanctions because china got 6% of its oil. to put together a coalition of over 27 countries. but the sanctions and their bank and other things that they had to do for. you don't have to wait for russia to say you may do this and you've got russia across the missile defense deployment. he's got russia using oil and energy to intimidate. >> first thing is be honest. you talk about it. you know, for better or worse, whether robert mccarthy were

out this year i've dealt with lessons of the guys. and you are not doing good things. never surprises them. they know they're not. he knows what he's doing. so we have this politeness. one more thing i have to say because i want to just agree with michele's earlier comments. president obama says what he means and means what he says and did that with an open mic and that should concern us with respect to russia. >> we don't have conversations with our russian colleagues. they are very hard-hitting. we've raised human rights, concerns about democracy and reversals. they've impounded them both privately and publicly on syria. so there is no -- there's no clear charge of and so forth. so i think to be fair we should

characterize the records accurately. the question i have is what exactly would you do differently or more appeared bush's sacrifice? will she be willing to put on the table to take a different approach? beyond the rhetoric, what would you do differently? >> other senior staff would run a break and went in the press room and referred to mchale -- referred to the soviet union as an evil empire. people in this town, even in this administration we can do with them. we've spoken the truth, but she can't do that. so i built it at the first nuclear reduction in history with the imf treaty under ronald reagan. so first, speak the truth. the russian people trying to get more space for civil rights to serve the period the american people deserve you to stand up for that.

you don't empower them by saying russia has control over you pursuing your security interests, whether it's with iran or syria and i think you'd see changed behavior. what you've done is allow them to constantly test the limits. they've tested it and thought they could go further. >> okay, let's go on. leaks. the governor says the white house is looking classified information for political gain. >> so, there is no one who is more upset and disturbed about the leaks then president obama. he did not authorize them. they were not authorized. he is appointed to prosecutors to serve them. let's pursue the fact is wherever it leads to. no one is immune, nothing is at table. i want to know at the table. he also will hold accountable

and will pursue the investigations to their logical conclusion. he rolled accountable to prosecutors who is found to have leaked. i think that's very clear. if you look holistically, there is no administration that is more aggressive about pursuing leaks than this one. i think you can let back to some of the things that happened in the bush administration in terms of how difficult these things are to deal with. and yet, what you need is a clear, presidential direction that this will not stand. it is intolerable, unacceptable and to go after the people who might have been responsible. >> rich, your hands are a. >> i have to ask a question before you let loose. do you think that romney was equally disturbed when the bush to