should serve us best in health care. no transparent information. no incentive to build technology. no incentives for quality. no incentives for coverage. therefore, little inclination to do things better. as a result, you and i, if you're like me, would attend meetings like this once a year where we would talk about the problems, talk about the progress we needed to make. and then we would come back the next year and have the same exact conversation. or pretty close to it. i can go on, but i think the point i'm trying to make is that the old normal was bad for patients. it was bad for our health. it was bad for hospitals. bad for physicians. but it was also bad for our economy. bad for medical trend. bad for our country.

now, one law isn't going to fix that in an instant. but today, when we count 20 million americans, who are living in a new normal, now have access to coverage for the first time because of the aca, it represents an opportunity for us to move away from the dysfunction of the past. so i want you to look at it this way. cutting an insured rate near in half doesn't just represent a set of numbers. or even an impact on people's lives. it also represents our country's ability to set off on a path of progress. where we can finally move away from the fits and starts to a place where we can improve and improve and improve. but that's not the work of the law. what do we need do next.

first the basics. covering more people. the most obvious way is to expand medicaid everywhere. millions of people health outcomes, state budgets and health care physicians will all immediately improve around the country. we know this. even premiums on the exchanges declined by 7% in states where medicaid has been expanded. second, we need to reach millions of people this open enrollment period who are chronically uninsured. most of whom don't realize that coverage is affordable now, thanks to the tax credits available to them. open enrollment began tuesday, and it is one thing is very clear. the demand for coverage is real. 150,000 people applied for coverage the very first day.

third, we're going to need to teach people how to adapt to live in this new normal. it doesn't happen automatically. so we're beginning the process in community after community across america of reconnecting consumers to the health care system. all of us, though, are going to need to adapt to this new normal. to the consumer who is used to making trips to the e.r. when things get too bad to deal with, it is learning the preventative care resources available. for a health plan, it is adapting the past business model designed around underwriting to one designed around care and network management. for the hospital, it is learning how to make money by emptying beds, not filling them. to continue to succeed in the new normal, we can't just take the old rules into the new world without making adjustments.

fourth, find the places where tweaks and adjustments will help the aca work better. we are in the early stages of a very new set of rules, and we are just now beginning to see the data on how care patterns, cost and opportunities are emerging. now, if medicare is any guide, a series of policy decisions are typically going to be necessary to improve the law and make it work the way we want it to. so things like risk adjustment, state based labors, the impact of third party provider payments, i would ask you to put politics aside. there will come a time for adjustments, whether at the state or federal level, and all the things should be considered in order to get them right, and i think our jobs are to make sure we look at what's happening so we can get it right. fifth, and i think perhaps most

importantly, addressing the real factors, the real factors that are driving up the cost of health care. very few people outside this room know what actually goes into their premium. what factors cause them to increase. how rates are set. to the average person, what we all call unit prices, hospital stay, cost of their prescription, it feels too high. but the relationship to the premium isn't clear. so transparency into cost in a world where more people are paying their own premium is very important. now, hospital profits in many cases are double or more than double what they were before the aca. as hospitals charge commercial rates to formerly uninsured people. drug costs are growing at record

levels, and more issues, like the cost of untreated chronic disease, diabetes, or the overall tax on the system of a fee for service system, when care isn't coordinated or when bad quality is delivered. so while people may not equate the cost and inefficiencies to the premiums they pay each month, we need to make those connections clear, and so we understand this is where the real work needs to happen. one thing that is clear is we're either going to move forward and capitalize on the gains made, or we're going to retreat back to a mode of saying, what's not perfect must be killed. along with it, the gains that we've made for millions of americans in the health care system. for the crowd who believes that we should go back to the old normal, i would just bet that very few of them have ever been in the position where they've had to declare bankruptcy because they've had cancer in their family. or have had to tell their

daughter she couldn't play on the volleyball team because mommy doesn't have health insurance right now. these are stories we hear everyday. people we intersect with, who finally say that they can sleep at night because they know they have coverage, there is no way they do not want us to continue working hard to figure out how to make things work better and better. so at this point, what determines the success of health reform isn't big ideas, but it is actual implementation. it is how we execute. it is how we measure. how we learn. how we adjust. our jobs as i see it, and where we need you, is to use data and science to expand what works. to look at what needs to improve. provide options and to steer us

to the right answers. i want to close with the types of opportunities we should be focused on to move forward. first, let me start with the devastating impact of chronic disease. diabetes. one in four people, 65 or older, more than 11 million seniors have diabetes. let me throw numbers at you now, you'll like that. but diabetes related care costs the medicare program and as a result, taxpayers, $42 billion annually. much of that money is spent on prescription drugs, insulin and other costs, let alone complications from heart disease, blindness and other illnesses. when someone develops diabetes, they cost taxpayers 86% more to take care of every year. okay, so what if instead of

treating illness, we could focus on preventing it. yesterday, we made a very exciting announcement. the expansion of a test to offer diabetes prevention services to medicare beneficiaries, all of them, beginning january 2018. now, prevention based system is something that couldn't possibly have been conceived of at the i don't know -- onset of medicare. but how do we get there? how do we move our system to a prevention based system? the aca actually created the ability through the cms innovation center to observe what people in the field tell us works, and conduct small tests, if they work, expand them further. now, for a model to expand the cms office of the actuary needs to certify a model not only improves care, but saves money and could do so at scale.

so with diabetes prevention, we begin testing a model where participants identified at high risk of developing diabetes were provided strategies to increase their physical activity, control their weight and decrease their risk of developing type 2 diabetes. the results were consistent with what other studies have shown. participation led to approximately 5% reduction in weight and saved medicare an estimated $2,600 per person enrolled in the program, over just 15-month period. so for us to manage the cost of the medicare program over the long-term, and this is vital, for us to manage the cost, prevention will have to be part of the new normal. other models are around the corner, including testing, the prevention of stroke, heart disease. now, one lesson that we've learned in health care is the

old addage is one person's cost are another person's revenues, right. if we go at prevention and go to the reduced burden, what we are we've learned is diabetes prevention program has been widely supported, drug manufactures publicly oppose these efforts. so my plea to you is let's be fact based, data driven, but let's focus on the needs we have in common. making things better for patients. second, in this new normal, it is interacting with the clinical community in a new way to be engaged and aligned in delivering patient centered care. this means paying more for what works, and creating an array of accountability models to fit the practice of medicine. we've committed that by 2018, more than 50% of medicare will be paid for through these types of models. but it also means reducing the

burden so physicians can get back to practicing medicine, and not filling out paperwork or typing on a keyboard. we must pay physicians to talk to and to listen to patients, not just to prescribe. yesterday, we announced significant steps to improve payment for primary care, care coordination and behavioral health. recognizing the role of the patient in the system. the individual and family needs will have to be placed at the center of the care system. this is really what drives cms. the care and well-being of 140 million americans and medicare, medicaid, children's health insurance, the marketplace programs, the millions of more who will need these programs some day. most of the people in these programs are on fixed or modest incomes, who are truly diverse,

and more mobile and more disconnected from our fragmented health care system than ever before. they're also more sensitive to the cost of care than ever before. who are they? medicare patients leaving a hospital with five prescriptions to fill, but unsure how to pay for them. we know keeping them at home is going to depend on the quality of the transition they make to their own doctor, and to fulfilling their prescription medication. second, their doctors, their daughters and sons, who have to make the difficult decisions on how to care for their parents who are losing their independence and need more assistance as they age. they want to understand the options for both home and institutional care, and how quality, staffing, cultural commitment will keep their parents healthy as long as possible. the parents with children with disabiliti disabilities, 40% of the

medicare program as you may know is spent on people who are living with disabilities. these are oftentimes people require 24 hour care, and spend their lives watching and managing every dollar and interviewing every home care worker. their marketplace consumers who have coverage for the first time, and are finally able to address symptoms they've long ignored. now, their families have become the weather vein in many respects for costs, as they feel it in the monthly premium every time something in the system drives up cost. all these of course, are just to help us understand that they are an array of us, millions of us with a wide diversity of health care circumstances, but each of us are looking for the same thing from the health care system. we want to intersect with people who understand us, and will provide reliable quality care. we want to understand what comes next, in the care process so we can get home and have as productive and healthy lives as

possible. increasingly, we do worry about having access to care that we can afford. so what becomes clear from understanding consumers better is that for millions of us who work in the health care system, all of us affordable and coordinated care is now part of every's job. in closing, as i think about my next 78 days, we've n have enor opportunities, but only if we work for them. we can't expect to do things the same way and make progress, and we have to take the opportunities we have for progress. unlike many periods over the last 20 years, our opportunity for progress now is richer than ever. we should be excited, not intimidated when we see challenges. i want to thank you for the role you've played as a nation, and we're excited about the progress

we're going to make together. i think i have time for some questions. thanks. [ applause ] >> very interesting. one thing i did not hear and i was wondering if you had a comment on, to what extent to you believe the costs can be kept controlled with malpractice reform to -- which would lower the costs to providers so they could charge less and still make their revenue, as well as to eliminate what we call the cost of defensive medicine? yeah, so did everyone hear the question? yeah, i think that's part of the equation. i don't think -- look, i mean, my own view is there is not one -- everyone has their pet idea. there is no one silver bullet. there are a series of things that we can do to make progress. i think that's one of them.

i wouldn't overestimate the impact of that, the studies i've seen. that has some impact on cost, but not as much as we all might think. but i think there is some thought to that. >> good morning, mr. slavitt, i'm david shea, state actuary for the state of virginia. many experts are starting to question whether the aca marketplace is sustainable in light of concerns with regard to insurer participation, affordability of coverage, changes in enrollment and so forth. how do you respond to questions about sustainability, and what is cms doing to address those concerns? >> thanks for the question.

so look, i think the first thing we have to do is step back and acknowledge that for the first time ever in our country, we are insuring people with no questions asked, without regard to their health, and you know, we ask companies to do that without any data really, or very little in the way of understanding what that would cost. so, you know, i think what's happened is that in the first couple of years, many folks, you know, don't necessarily real fault of their own, just priced too low. and so i think -- in some expanded i think too fast. so think you're seeing in the fourth period, you're seeing some folks adjust, and certainly, in many markets, the price is moving up certainly higher than they've been before. i would point out that in the third year, currently, 2016, overall premiums of the marketplace are about 18% below

the original estimates. so we've been tracking below, i think we'll see greater increases this coming year, and i think we'll be more balanced to i think spot on to where they thought we should be. some of it is makeup, but it is a new business for companies. what's most encouraging is to see a large number of companies who have really understand it as a new business, aren't treating it like the old individual market, or the medicare market or some other market, but are really adapting product designs, network designs, and the best companies are expanding in a very -- in a kind of, as they view this retail world. now there are things we're doing, which is another part of your question, as we look at the data, to make sure that elements of things that were driving costs unnecessarily, like third party payments and other things, the risk pool, are managed better. i think we've taken steps and we can obviously continue to take

those. and i finally, i would say, you know, probably the open question remains the same one that occurred before the aca. which is that there are some markets in this country where they're just not enough competition. particularly rural parts of the country, that's always been the case. and i think this is getting more -- i think the aca is exposing that reality and there a real question. we've selected a model that is private sector driven, and i think the real question is whether or not we need something that feels a little more like medicare, where there is a private sector option and medicare advantage as well as a fee for service option. i think that's part of the debate we will very to look at in those rural communities. >> thank you for speaking with us today. >> sure. >> audry halvorson, health care delivery committee. it seems the key to mitigating the impending medicare and

medicare programs and preserve the country's health care safety net is to dramatically slow the historical growth of health care costs. this was number five in your list of key success factors for health care reform. you mentioned some of the steps that cms is starting to take to lead this change. but what is going to be necessary fo from the private sector to support this? and can these things be accomplished under current law, or what changes would need to be made in law? >> yeah, so if you talk to physician in a community where we have developed alternative payment models, leakike a medic home model, they want medicare/medicaid and the commercial payers, all to use the same approach. the same system. learn a half dozen different ways of being measured, and then have to add to their administrative cost. they don't have to use six

portals. my plea to private sector is if you think you can do it 5% better in a way that will annoy physicians, just don't. do it 5% worst, and do it the same way, so that physicians can actually follow along, and because they want to treat their entire patients panel the same. they don't want to treat he each one differently. so i think there is, you know, work we've started by creating what we call the core measure set, where the commercial payers of medicare, medicaid have now a common set of measurements, but there a lot more to do there to develop progress. i think second thing i would say is there a theory which says if you measure, measure, measure, measure you're somehow going to improve care. i would argue that it is a volley to determine the 34 and 62nd percentile. the reality is if you really get

close to it, what i believe is that if you measure less and provide more support, folk is on the things that really matter, you give physicians back 30 minutes in their day to spend with patients, we're going to do better. we're going to do better. i think we've overtipped a little bit in the direction of kind of overmeasurement as we've attempted to improvement health care system. i think the -- getting closer to the delivery system and aligning better around the needs of the clinical community so they can coordinate care is what it will need to make progress. >> i'm john shubert, a health actuary from chicago. i could say more today than i could yesterday. [ applause ] >> i would like to follow-up on your comments about what we've learned over the last few years and ask you to comment on efforts to attract more healthy

risks into the exchanges, and what is being done there to kind of help out that whole risk pool? >> that's a good question. that's an important question, i think. first of all, congratulations for the cubs. up until -- even when they got the final out, i still didn't believe it. i grew up in chicago, so. i thought something was going to happen. overturn the play or something. it still might. still might. a lot of talk about rigged these days, could be a rigged baseball game. you know, first of all, i think it is like in this room, i can actually answer the question with some seriousness. you know, i would be dcandid whn i hear about the risk pool, can't tell the difference of the a risk pool and a wading pool in the backyard. the reality is, i think there was an assumption that employers

were going to dump or move or give employees essentially money to go after the exchange and that would leven the pool with a lot more people, and so forth. so i think that is a valid observation. i think what we're doing now, though, specifically, so i would say i'm not sure that there is a tremendous amount of concern about are we attracting enough healthy people, but i would frame it this way. i would say there are still, you know, uninsured rate of 8 to 9%, and a large number of those folks are ineligible unfortunately because they're undocumented, another large chunk are part of the medicaid expansion, so not eligible. it leaves you with a core number of uninsured people that we really do need to reach. many of them are young. many of them, though, are

chronically uninsured for other reasons, immigrant communities, et cetera. the first thing is, the surprising fact we've learned is most of them are eligible for tax credits, but most of them don't know that they are. so getting that message out i think is really critical. second, i think it is a more sophisticated use of kind of digital outreach, and partnerships so we've announced an array of 17 partnerships with folks arranges from digital gaming companies, but to this new gig economy. one of the things aca does is allow people to work on their time. so uber and lyft and all those companies have become big partners. finally, i think making sure people understand not just the messaging around their tax credit availability, but penalties when they don't pay. so this year, we're definitely gaining on it. and i think each year, we'll gain more and more.

>> one more question. >> okay, donna novak, from no risk consulting, and third generation cubs fan. so life is good. talking about the aca risk pool, and unexpected high claims and the expansion of medicaid, what is cms doing to reduce the steering of medicaid, and in some cases, medicare, but i think what we're seeing a little more is medicaid, eligible individuals into the aca risk pool? >> so for those of you -- it is a great question. and for those of you who aren't familiar with the details behind the question, there are -- come to find out, there are health care providers who have been steering patients into

marketplace plans which reimburse hire, right, then medicare and medicaid plans. and how they're doing it is a really interesting question. and come to find out and examine, dialysis being the biggest example, using third party -- they've been paying people's premiums through other mechanisms to make that happen. that's something that we called attention to, as we understood the problem. it indeed is a problem. and we issued a request for information earlier this year. the responses are very illuminating and by the way public. so i would encourage you to read them and look at them. now, recently, i think there has been a little progress, in that some of the major dialysis facilities and some of the companies have been doing the funding have announced they're going to voluntarily suspend steering any medicaid patients

through third party premium assistance programs. i think that's a start. i think that's an acknowledgment that, nyou know, people are taking advantage of a system for their own gain. i think the thing we have to -- we have to set up all the kinds of processes or otherwise that you do for programs that have been established for 20, 30, 40 years, and we've got to set them up in the fourth, fifth year so we can make responsible policy decisions. if people in your profession can capture the data well and sheow it to us, we have plenty of tools to act. plenty of tools to act. but we want to act in a fact based manner. we don't want people who deserve care to not get it. we don't want to overcorrect. examples like that will continue to emerge. as they do, we need to be able to take action and work together

on them. [ applause ] have a great conference. follow me on twitter. and thanks for all the work you do. >> thank you so much. [ applause ] it is a pleasure to be here and my colleagues will verify the fact that i'm more nervous than average addressing actuaries, because it is one of the groups, although it is extremely important to the pgbc, i'm fairly confident that everybody or nearly everybody in the room knows more than i do. and that's a nervous task.

but i also know that everybody in the room or nearly everybody in the room is either already totally prepared for their retirement, or on track to be so. so i am, when i talk about retirement security, i am really talking to the choir. pbgc has had a long, close relationship with the academy, and we want to continue to build on that relationship, and value and benefit from your contributions to pbgc in the form of detailed, clear comments on proposals, proposed regulations. the issue brief that tom just mentioned on the multi employer system. there is lots of projects we

work closely with the academy. and your members are among us. and we appreciate that very much. i think we may have a collection of the best actuaries in the world, but maybe that's just me bragging. and in that regard, i want to thank the academy for honoring joan with the robert meyers public service award. she is truly a remarkable public servant, and served the pbgc as chief valuation actuary for nearly 20 years. she led our team of actuaries, and not only had to understand everything that you do in the private sector regarding pensions, but had to calculate the benefits under arisa.

and was responsible for the single employer and multi im employer liabilities in the financial statements. that's no minor task. i understand she met that responsibility with grace and skill, and worked with every pbgc executive to meet the challenges that they faced. she is -- she exemplifies the public service that i have experienced at pbgc, and everywhere i go, i hear about the quality of service that the pbgc provides, and having, as tom explained earlier, i've worked in other agencies, and we didn't have any where near the customer satisfaction that i --

that is documented, and that i hear about all the time, that pbgc has, and i'm particularly proud of it. while i was going through the confirmation process of being director, many people asked me, many senators asked me, why would you want this job? and usually i thought they were asking it in jest. but every now and again, i would respond with a lighthearted answer, but one time, a very high level senator asked me, no, why would you want this job. and he actually followed it by saying, i'm not sure i want to vote for anybody who wants this job. and i didn't have a really great answer for that. i mean, most people in a job interview situation have canned

answers for questions like that. but once i understood his seriousness, i didn't have a great answer. but i can tell you one reason i wouldn't want the job is if i didn't have the quality of professionals that we've got. like joan at the pbgc. we're very proud of that tradition of service, and i can't tell you how irritated i get when i hear people bashing public servants. and it's not justified. the folks at pbgc are evidence of that fact. i've been director for a little bit over a year. just celebrated my one year anniversary. and so i'm no longer on a honeymoon. so people are starting to expect me to know answers. so i'm looking forward to

hearing your questions. we can't do this job without interaction with groups like you, and so i'm looking forward to hearing the questions you have, and attempting the answers. as many of you know, i am a great fan of tdefined benefits plan. in that role, i feel a little like the black knight at the bridge in the monte python movie, the "holy grail." i'm here to say that i'm not dead yet. and the damage to the defined benefit system is only a flesh wound. but i have to -- in all seriousness, i have to say that we're not blind to the economic

trends, and the risk management that cfos are undergoing on a daily basis, and the fact that they have competitive pressures on their company, and that there is a trend to try to de-risk or transfer the risk of the defined benefit plan, and/or to terminate it. and however, i do want to recognize that at no time in our history has a majority of americans been covered by a defined benefit pension plan. so a lot of times, people refer to the good old days, when everybody had a plan, and those good old days never existed. on the other side of the coin, there are still lots of employees who are actively accruing benefits in a defined benefit today. probably about 10 million of

them. and the employers of those 10 million folks often look to the defined benefit plan as a positive way to attract and retain a quality work force. and we can't turn our backs on those employers and those employees who have accrued those benefits. and i think that the defined benefit plan is still the best way to provide guaranteed lifetime income but you can't outspend and you can't outlive. a lot of folks have talked about leaving the defined benefit system, but a lot of folks are talking about it, but deciding to stay in. and we at pbgc would like to do whatever we can to help that

out. if you've heard me speak before, you've probably heard this reference before. but i'm going to keep repeating it until everybody i ever talked to has heard it. that is i urge you to go google twilight zone and shelter. and what you'll come up with is an episode of the twilight zone, which gives you an idea of where i come from. and what i grew up with. and it is a story about a family who is invited some friends over for dinner, and they're enjoying dinner, and it is a bit of a birthday celebration, and little johnny comes running in right about dessert time, and says that everyone should pay attention to the conelrad

station, i don't think it still exists, but the station that comes on when something bad is going to happen. and sure enough, come on and says there is a bomb coming, and everyone should seek their shelter. the host of the event has got a bombshell t bomb shelter. none of the guests have a bomb shelter. the rest of the show talks about what -- portrays what happens as the people with the bomb shelter are trying to keep the people without the bomb shelter out. they only have enough room and food and supplies for themselves. and by the end of the show, i don't mind giving away the end, but by the end, the people who don't have bomb shelter, and

right about that time, the tv comes on and says it is a false alarm. and the guys with the shelter come out of their shelter and say do we want to live in this society where some of the people have shelters and other people don't. and rod serling, who did twilight zone, he was interviewed a few weeks after that show came out. and it was one of the most popular, talked about episodes of the twilight zone. a you few weeks later, he was interviewed and he said he was building a bomb shelter. after he did that episode, he stopped bidding a bomb shelter. i think it is a good analogy for a society where some of americans, some of us are

prepared for retirement. and others are not. and we have to ask ourselves do we really want to live in a society where some people have enough for a dignified retirement, and others don't. and i don't think i have to talk too much about that in this room, because i think most of the people, especially the people of the pension folks are focused on getting people prepared for retirement. and but i do think it is a good metaphor for analyzing the importance of it. i don't, as is already been alluded to, i don't think i have to talk too much about the status of the -- our pension programs at pbgc. we have two programs. the single employer program and

multi employer program. both of them are in significant net deficit positions. but the multi employer program is in far more serious a condition. in june, we sent our projections report to congress, and that projection report indicated that the single employer program is likely, but definitely not certain, you all know what likely means, more like than not to improve and probably be in an even position within the coming ten years. however, and it is certainly not certain, and right now, it is in a $25 billion deficit. so if the walls caved in today, we would be $25 billion short in

paying the benefits that are promised under the plans. the multi employer system is in far more dire situation. it is only about one-third the size of the single employer system. 10 million folks versus a little over 30 million folks. but it is -- its deficit is more than double the deficit in the single employer system. and there -- it is more likely than not to be the pbgc multi employer system is more likely than not to be insolvent within ten years. and every time i say ten years in washington, those of you who are not from washington probably think ten years is a very short period of time. in washington, ten years is a

geologic era. five election cycles for the house and nearly two for the senate. more than two for the president. and congress is constantly dealing with tomorrow, or this evening. and when you tell them they have ten years to fix a problem, it is like telling them they have a longer vacation. it is -- they get a longer recess this year. however, i think most sensible folks who know anything about pensions and who know anything about economy in general, would recognize the fact that the longer you wait to fex a problem that's almost certain to happen, the harder it is to fix it. and if the problem costs money,

fixing it the day before it runs out of money is going to be a lot more difficult than fixing it ten years before it runs out of money. in fact, one of the reasons it is in a deficit situation is because premiums have been so low for so long. and the congress passed the multi employer pension reform act in 2014, mepra, and i think many congressmen think they took care of the problem. they only added about two years to the solvency of the multi employer program. pbgc doesn't have the assets or the incoming previomiums to paye financial assistance at the current level of guaranteed

benefits. the current level in the multi employer system doesn't light a candle to the guarantees in the single employer system. a guaranteed -- the guaranteed level on the multisystem is not easy to recite. but in summary, for a 30 year employee, somebody in the program for 30 years, their guaranteed benefit is a little under $13,000 a year. and that's not much of a guarantee. and if you're in a plan for 20 years, or 10 years, the guaranteed level is much lower than that. those guaranteed levels will go down close to zero. not completely to zero, if the trust fund of the multi employer system goes to zero. that's likely to happen as i said within ten years.

more like than not. there is about 1,400 multi employer plans covering 10 million people, as i mentioned. and so when i talk about the in solvency of the multi employer program, i don't want to talk dire straights for everybody, because most of the people in the multi employer system are in plans that are not likely to run out of money. they're not likely to rely on the pbgc for the guarantee. most of the folks, 85 to 90% of them are in plans that are more likely than not to stay solvent. but still, the ones that are going to be in plans that will be insolvent that will be relying on the pbgc are 1 million to 1.5 million, and

that's not a population that americans normally want to turn their back on. and those folks are all over the country. and that -- those are just the number of participants and we're also talking about their families and their communities if their funds run short. and the effect of such an in solvency has been ilstrateted to reduce benefits, but down to some amount higher than the pbgc guaranteed level, and it was something that many folks, many congressmen, many senators and participants had a big problem

with. so if pgbc becomes plans are r pbgc for guarantee levels it's going to be a lot worse. also important to note thousands of employers participate in multi-employer plans and contribute to multiple significant costs. this is a concern for businesses not just employees. the pbgc is the administration has a proposal to address pbgc's issues with multi-employer plans and it focuses mostly on increasi

increasing premium that's are played by the multi-employer plans to the pbgc. for several administrations. as far back as i've worked. i've worked for three administrations at the treasury and all three have proposed that the pbgc be permitted to set its own premiums. and most insurance companies set their own premiums. every now and then i talk to people who find out that the pbgc doesn't set its premiums and they're shocked. they often say, how can you guarantee a statutoory level of benefits when you can't set the preerms. that's a good question. however no congress has yet decided to give up its right to set premium s to the pbgc or its

board and having worked on capitol hill i understand it's not likely that that will ever happen. congress doesn't often give up the powers that it has. and it's unfortunate that the administration has to ask for premium increases that look like a tax increase. and a lot of employers and plans view premiums as just taxes. and a lot of people, a lot of congressmen have hard time voting for increased premiums. the administration's budget would increase premiums by $15 billion over ten years. that would virtually eliminate the probabilities that the

pbgc's multi-employer program became insolvent within 20 years. and the structure of the premium would have to be changed. a flat increase for everyone would be totally inappropriate. it would have to involve a variable premium. it would have to involve some form of exit premium. it would have to involve some form of pbgc discretion or relieve for plan that's were unable to afford an increased premium otherwise you could just make the matter worse. if you leviedet premiums in a way that didn't make the plan worse you wouldn't have to levy as many premiums to make pbgc solvent. we're committed to working with congress. and we will look forward to

doing that in the coming year or two. pensions as i know from experience are a bipartisan issue. most congressmen are dedicated to strengthening retirement security. i don't think there's any congressmen certainly wouldn't say it in public that they'd like to see the pbgc go under. multi-employer programs are not well understood on capitol hill and often times when we talk about multi-employer program plans to folks on the hill their eyes glaze over. nobody wants the multi-employer system to become insolvent because of an action. in september, the senate finance committee held a mark up that would have -- that would relieve

pressures on a significant multi-employer program pllan un workers and it passed with bipartisan support in both houses, it's a priority to the administration and we're very optimistic that it will get passed in the lame duck session. i've been asked to not refer to the lame duck session as such and, well, pretend i didn't say that. i heard of someone who went to their halloween party as a lame duck. they had a crutch and a cast. dressed like a duck. the house of representatives and the education workforce held a

hearing on a new proposal to allow a different type of multi-employer program plalan. there's definitely room for creative ideas. we're working closely with staffs of both houses to analyze new ideas in the multi-employer world. and however we need to make sure that any new idea doesn't put existing legacy plans at further risk of insolvency. and so, that's a lens that we're go to look at, look at any new proposal through. the problems facing multi-employer plans are complex and they deserve adequate time for full consideration and an open process involving all interested parties.

the single employer system is as i mentioned is much more -- much less likely to run out of money. and much less likely to become insolvent. one of the reasons is because of the recent increased in the premiums. some of them increased for reasons other than, this is my editorial content here, other than pension policy. and having been on the hill i understand and i think most people in washington understand that because of the pbgc is on budget that an increase in premiums is an increase in

revenue and although those preermiums come to the pbgc the are scored as revenue increases that can justify spending somewhere else. and so conceptually we pave highways and build missiles with pension premiums. not really, only conceptually. and that's just the way scoring works on the hill. and another way of looking at revenue through a mirror, sort of, funding relief is also a revenue-raiser. if you allow employers to put less money into their pension plans then the economists say

they will have more profits or will give employees more money. and that means higher taxes. so pension relieve, funding relief, is revenue that can be used to pave highways and build missiles. and people like to pave highways. and so there's been at least two highway bills that have been funded by funding relief and premium increases. it's difficult to take that off the table. it's difficult for congressmen to say okay we're not going to do that any more. however i do believe congress has gotten the message and the administration has definitely got the message that additional single employer premiums are not

necessary and in fact unwise at this point. i suspect that's going to be the case for a long time, or hope it is. so i think -- i think the fear of future premium increases on the single-employer side is unwarranted right now. the option to shore up the defined benefit system is not going to be easy all of them involve pain, it's going to be premium increases, benefit cuts, higher contributions by employers or some kind of revenue from the government, none of those are thing that's congress likes to vote for. so we need -- we need to work

with congress and figure out a way to shore up the -- the programs with the least amount of pain. and i'd welcome to hear your suggestions and the issue brief that you issued is a great resource for us. it outlines the issues very well. thank you very much. i think we have some time. i think i've promoted some controversy or questions in your mind and i hope someone will come forward with some questions. [ applause ] >> good morning.

thanks for being with us. i appreciate your commentary on the way the highway bills are funded by telling the employers to bring in less in their pension plans to lower the deductions, bring in revenue. the the premiums are a big topic and like you i get troubled where we are leaving individuals, which is a pool of money to figure out how long they're going to live and manage those resources. when i look at amendments to single-employer premiums i compare it to car insurance. the fixed rate premium is just a baseline. the -- a good driver is still going to pay something for insurance. variable rate premium is difference between good and poor drivers and we've seen both those premiums going up 400% to

450% between 2012 and scheduled 2019. i wonder from your perspective if congress missed the third piece which is the variable rate premium cap. and the cap has only gone up 25% and to me i say the cap is protecting the person who drives into a tree every weekend. and so therefore are we protecting -- >> i like that. >> -- are we protecting by not increase the variable rate premium cap are we protecting the most troubled of plans from paying their fair share of premiums? >> no i -- i -- i -- i don't know that i'm going to weigh in with a personal you as to where the cap should be, but i certainly agree with that sentencement. i don sentiment. i don't think congress ignored it but i do think they constantly have to walk the line of making, of whether or not

they make the problem worse. i think if i were a dictator and i'm not or if i'm a magician, i'm either, but working on the magic, if i could resign the pension system, i would certainly do it in a way that encourages people to fund up. because if everybody is well-funded you don't need much of an insurance system. and that's certainly true in the multi-employer system where there is no variable premium and much less incentive to fund up. i know the administration is focused more on -- premium designs that encourage people to fund up. if we view premiums as a tax,

and i think a lot of people do, we should tax stuff that's good. should not tax stuff that's good, and we should tax stuff that we don't want. and tax people leaving the system. tax under funding. tax things -- don't tax folks who are covering people and active plans and they're well-funded. maybe those guys should pay the bear minimum like you mentioned the in your analogy to car insurance but they shouldn't, if they're doing the right thing, they shouldn't have to pay the variable rate premium that someone who is running their car into a tree every weekend, i like that, i'm going to use it. >> thank you very much for some very interesting comments. one thought, most of the time

that we're hearing about anything of general revenue going in to support the pbgc the argument given that those who never had a defined benefit pension plan are being taxed to subsidize those who do. has there any thought been given to having participants who are covered by the pbgc such as in the multi-employer system be taxed for the guarantee and benefits they receive. because the benefit is really to the participant not the plan. if you are covered by multi-employer plan you pay $10 a month to the pbgc for the privilege of having your benefit guaranteed that would generate over $1 billion in revenue to the pbgc and would tax those people who are getting the benefit. >> revenue estimator on the spot, you're absolutely right. there is thought about a participant premium and it is

along the lines that you just expressed. not the amount, just the idea. but the reasoning is based on the reasons you just expressed. i don't think it would be appropriate if i said where i heard the idea but i hear it often an in high places, both from advocacy groups as well as folks on the hill. as i mentioned earlier, anything's going to involve some kind of pain. and that wouldn't be painless but it may be appropriate and if you're talking about shared pain, that may be a way to do it. i think everyone would regard that as was pointed out in your issue brief i think everyone would regard that as a benefit cut.

but it's $10 a month or something on that order that you mentioned is not a huge cut. like has been discussed in other context. and it may be appropriate, especially if the premium is based on the amount of benefit you get. there are some plans, like the coal miners where the benefits are not very high at all. and there are other plans where the benefits are pretty significant. and if a participant premium were based on the benefit that they're going to receive it might be more appropriate. there's also a discussion, i know this was a big discussion when i was on the hill as to how far you can raise premiums either on participants or employers with a plan without raising the guarantee level and

people might not be willing to pay much of a premium for a guarantee that only guarantees them $12,000 a year or $13,000 a year. but you're absolutely right, there are people on the hill and off the hill that are thinking about that very thing. and i wouldn't be surprised to see it reduced to legislative language maybe before the end of the year. yes? >> hi there. first of all, i just want to echo your comments that we have some really wonderful dedicated employees working at the agencies that are pretty devoted. >> at the irs, too. >> yes. i think particularly -- no, i'm just kidding. you know, and i do say that as a former employee, i do get a little disappointed with the lack of appreciation, so i appreciate you bringing that up. but my question is looking at not just the db system which

obviously i'm a big fan of but the entire u.s. retirement system is quite challenged and we're heading into unknown waters that are going to be pretty trouble as well, i want to know what we as the actuaries can help others on the hill to solve the problem into something that's going to actually work. >> i think -- i think you're actually already pretty involved. but i do think that the education efforts of people like the academy in the value of lifetime benefits, i think, especially among millenials i think there's an increased appreciation for retirement security.

and there's been recent research on that issue and millenials have expressed an interest and a willingness for less cash compensation in favor of more retirement security but i don't know that people understand that retirement security means more than just a pot of money when you retire. and it's very difficult for people to understand how much money is really necessary. there's a lot of people who retire with $200,000 and think that they're very wealthy and they're going to be fine. but they don't have a lifetime stream of income. and i think that, i'm experiencing this when dealing with parents, that when you hit a certain age, and i'm getting

closer it to it, where it's very difficult to manage that money. when i'm 85 i don't want to be thinking about where my money should be invested or how much i should be taking out of my defined contribution plan so i look forward to having some kind of annuity that will last the rest of my life. i think two lacks are a very promising area, they have taken off, i think you will see more activity in the q lack area, but i find even people at the pbgc don't have a real good -- young people at the pbgc don't have a real good understanding of what it means to have a lifetime income. there's a lot of people who say, you know, you cross-examine them and you say what if you have this pension but when you're 40 you're in a hurricane and your

roof blows off shouldn't you be able to get some of that pension, they're like yeah you should get that to take care of your roof. and it's hard to argue where that. i don't want to be too strong an arguer but that's what's happened to iris, the r in ira doesn't mean retirement, it means something thelse that has in it. the list of exceptions you can take your ira for is long and it's difficult for congress to turn them down, every year some new proposal of things you can draw your ira down for, or your 401(k). it's hard. when katrina wipes out new orleans it's hard to say you can't touch your ira or you will have to pay a penalty. so the list is long. i'm not sure how to get past that.

but i do think the defined benefit plan does it. that's why i'm continuing to preach for defined benefit plans. i also know we got to have some other vehicle. coming up with the other vehicle, i was just listening to one just now, where you get a defined -- a plan that -- that the employer and the employee have some kind of a shared risk. we've talked a lot about derisking but it's really risk-transferring. and i think if we could transfer a little bit less risk to the employee and have some kind of a program where the employer and employee share the risk, i think that has a lot more promise than either employer all has all the risk or the employee has all the risk, about living their income. >> we're going to have time for one more question.

>> hi, i'm tim lire, thank you for being here. we've talked a lot about policies and premium in particular and you don't have ability to set your own premium so the question is, one, to what extent can you influence your own policy, including setting premiums and two should it be enhanced and should could it be given the complexities of capitol hill. >> well we mainly have a lot of input in setting the administration's budget and so we -- we -- we play a role in establishing the administration's budget with respect to pbgc issues and that includes premiums. however congress very rarely takes the presence budget and just enacts it, less than rarely.

so it's pretty remote and i think -- i think the biggest tool we have in setting premiums is the tools that we have to measure the risk. especially the pims model that we use to evaluate the risk that we're going to run out of money. and i think congress is getting more and more trust in that modeling system. they now rely on it, on our model, in evaluating proposals on the hill. and i think that's the biggest tool we have to helping congress

to realize the importance of premium setting. but i -- i keep coming back to the fact that congress sees premiums like a candy jar. it's difficult to take the candy jar away. as many parents know, having gone through halloween, it's hard to just say okay you've earned all this candy now i'm going to take it. so i don't have a lot of promise for for getting the power to set the premiums although every time people complain about where the premiums are i can say if we were setting them they wouldn't be where they are. of course i'm not telling you where they would be but they

wouldn't be where they are. okay. thank you. [ applause ] >> coming up thursday morning texas congressman gene green will talk about his bill to abolish the electorate college and charlie dent will discuss the trump candidate and leadership picks and on world aids day, global coordinator dr. deborah burks looks at policy

for funding for hiv and aids and where it stands today. watch live 7 a.m. eastern thursday morning, join the discussion.

for our complete american history tv schedule go to cspan.org. the theme for this year's holiday declarations at the white house is gifts for the holiday chosen by the first lady to highlight public service, education and health. here's a look.

learn more about the influence of america's presidential spouses from cspan's books "first ladies" a look at every presidential spouse in presidential history and it features interviews with 54 of the nation's first ladies and biographies from each of their lives.

as available wherever you buy books and in paperback. we're asking students to participate in this year's student cam video documentary competition by telling us what's the most urging issue for the next president to address in 2017. middle school and high school students grade 6 through 12 and can work alone or up to 3 to produce a 5 to 7 minutes documentary on the issue selected. grand prize of $5,000 will go to the student or team with the best overall entry. $100,000 in cash prizes be awarded and shared. 153 teachestudents and teachers.

next annual conference -- discussing diversity of people and this is an hour and 15 minutes. d. >> all right. hi. my name is catherine maher and i'm executive director of the wikimedia foundation the non-profit that hosts and supports wikimedia and other projects and proud to work with many global organizations and partners that support the community including many of you here today. i'm so excited to be here for the third annual conference in

the united states and first ever in north america. it's amazing to see how our community continues to grow and reach beyond our own borders every single day. it's my first time at a wiki conference in the united states and can't tell you how excited i'm here in beautiful, sunny san diego, it's my vote we do more events here. i want to thank the organizers putting together this event, there's more than 300 individuals 16 different affiliates and 30 different glam partner institutions and for those who are newer, ga it's galleries, libraries arc vivacious archives and institutions. so i'm beautiful to be here. yesterday we had a country crawl

across balboa park learning about her tige and cultural influences and learning and my personal favorites san diego's craft beers and here i was able to attend their annual fundraiser, this institution is more than 20 years in the making and only opened few years back. thanks to it's san diegoans to bring this remarkable institution to their community. when i heard about the theme of this conference i might have done a little bit of a dance. i was so excited to learn we will talk about inclusivity and community building and sharing knowledge. i believe it's at the heart of the promise of wikimedia and why it is so important to fulfilling

our vision. ? we are in our 15th year. start the 15 years ago as a small website a free encylopedia and today so much more nearly half billion using it from all over the world. we're on every continent. shout out to the women scientists happening earlier this year. we speak hundreds of languages and speak dozens of partners around the world. we are integrated into places and experiences all over in ways that we're probably not even aware of. we're so integral to the way

knowledge is shared fair to say we honestly have changed the world. but we're not perfect. our vision is a world in which every single all knowledge. we don't just promise inclusivity with that statement. for my belief, inclusivity is a necessity. the only way to really achieve our vision is to involve and welcome all people. we need the representation of your voices and our shared voices so that together we can create something greater than the sum of all of our parts. and right now, we know that we have further tog go to achieve that. never mind all the world's knowledge. wikipedia is not finished, in fact we've just barely gotten started. in english wikipedia, only 227,706 of the more than 1,383,736 biographies are about women. that's about 16%.

in 2012, the oxford internet institute did an evaluation and found that more than half the articles on wikipedia were about places, events, and people that cover only about 2.5% of the world's land area. and only about 2.5% of the world's geotaged walk i media articles are about the continent of africa, despite the fact that that continent is home to 20% of the world's population. this is just the encyclopedia. we also know free knowledge takes many forms. it takes the form of images, of data, of original sources, language, and so many other forms of knowledge that are represented across the wikimedia projects. so we do need more inclusivity because we need more people to join us, because that is the way we will achieve our mission. we must open ourselves up to be the thing we have promised to ourselves. what does this inclusivity look like? it looks like the people in the

world around us. we know that. and how do we do it and how do we bring all those voices in? i believe that we do it with intention, by embracing the potential of what our movement can be. as i mentioned earlier, we started simple, as an idea with a website, an encyclopedia open for anyone to contribute freely. and this remarkable movement grew up around that idea. without any particular plan, we grew into a constellation of individuals, activities, and organizations. that simple idea that anyone should be able to freely share in knowledge proved to have a gravity of its own, pulling minds and institutions into its orbit. i referred to ourselves as a movement. i firmly believe we are. i also believe there is so much more we need to do to become what we want to be. i challenge us to embrace this movement, in its power,

complexity, its messiness, and ini in its potential. movements are things that affect social change. they align with their core values. so do we. we drive change towards greater openness, towards greater sharing. a richer commons more knowledge available -- more knowledge available to more people. at their best, movements are organized to take advantage of their power and they are also organized to directly confront where they have weaknesses. as we look around today we see a diversity of voices and more organizations and partners that join us today. as we've heard earlier today, we've gone from wondering how we relate to libraries to feeling as though libraries are our partners in this movement and this powerful mission that we have. while we left a pretty big mark on the world of free knowledge, we know we have so much further

to go, more people to reach, more change to make. in order to achieve what we want to achieve, i believe we have to do it with the intention of acknowledging our doubts, thinking about where we go and planning for how to get there, as a movement, as a deliberate, intentional thing. in many ways, we're already on our way. our communities are doing many of the great things to realize our great potential including building that inclusivity where all the world's voices can be represented. and i want to call out this incredible work today. you already heard a little bit about afro crowd. woo! [ applause ] >> absolutely. you deserve all of the applause. afro crowd aims to increase the number of people of african descent who act i feel partake in the wikipedia projects in free knowledge movements. they have made a significant contribution in closing the multicultural and gender gaps in knowledge on wikimedia and the wikimedia projects.

our colleagues in mexico, yes, woo! [ applause ] they're aimed at bringing women together to edit wikipedia articles related to women and their work. in fact men are not invited to these edit-a-thons. more than 200 women took part in 900 events last year, increasing the knowledge that is available on spanish wikipedia and other central american countries. when we have great exclusive ideas, we see that they spread. and finally, i want to recognize in wikimedia canada, the -- sorry, i'm sorry, my apologies, knowledge, culture, and language in wikimedia project.

it's the first nation of canada. the project aims to increase and improve information about knowledge, culture, and language of that community and great nation. these projects offer leading examples of how our communities are already working to fill the gaps and address our movement's challenges head on. we need to celebrate these efforts and our progress. i want to congratulate each of of these groups for what they have done as well as countless other organizations and individuals' initiatives for effecting real change and impact in filling these gaps and knowledge. and as i said, in the true wikimedia spirit, this is just the beginning. we have a lot more to do. we know there is more to be done. so how do we build for change as a movement? it's not easy. i'll say that. and there's probably going to be some trial and error involved. i think one of the first things we need to know is our intention. we have to be clear with

ourselves on how to welcome them, how to engage them and how to make space for them. this means that we need to commit to and abide by and hold up friendly spaces and codes of conduct in all of our communities, from in-person gatherings to our technical communities. it means clarifying our values so that they're not just about open and diverse but can help us make decisions about what culture we want to have as a community. open spaces and inclusions start with language. we have to think about how we communicate with others, the words that we use, and how things translate, not just in terms of language to language, but individual to individual, how we share and how we receive. and we need to practice inclusivity. we need to identify the people that we want to work with. we need to go talk to them. we need to listen to why they're not working with us yet. this is really important. it's not just about asking people to join us. we need to understand the

structural barriers, social, economic, or otherwise as to why they are not participating in our movement. we need to understand what their objections and challenges are. and then we need to actually reflect on them and think about how we might evolve in order to bring in more individuals and become a more welcoming and inclusive space. we need to encourage others to do this as well. for example, at the wikimedia foundation, part of having these conversations and truly listening was a really important moment in talking to our colleagues who are working to increase the participation of wikimedia editors in ghana. we learned why the ways we were doing things might alienate participants. it was through directly engaging with these challenges, where they felt as though we were being blockers and actually absorbing and making change that we were able to create a better working relationship and hopefully grow that community.

which gets me to the next thing. we actually need to invest in the diverse and inclusive communities we want to have. we have to resource it. these communities don't happen just because we want them to. they happen because we go out and make a commitment. at the wikimedia foundation we're investing in this explicitly. part of the wikimedia model at the foundation is around community grants. in the last two years the foundation set aside half a million dollars to fund resources for increasing gender diversity for our participants and in our content and to fund tools and initiatives that facilitate and support healthy community culture. we kind of used to do this thing where we sat around and talked about welcoming women and people of color and people from emerging communities. and now we actually have dedicated staff, liaison for our emerging communities and budget and resources to help these communities grow, because that's what it takes. it's not just about saying we want to do this. it's about actively committing and going out and doing it. and i'm not saying we're there

yet. but at least we're taking the first steps. we're working on how to address harassment in our projects and create a healthier community culture. we're developing trainings for our community members on how to identify and handle toxic behavior when they see it. our annual inspire grant making campaign is focused on resourcing ideas to address harassment in the wikimedia projects. we've launched a leadership development program to identify and train and support community members who can be the next generation of leaders across our movement. and we're investing in participation in regional conferences and emerging regions to spread the word about the resources that we have that will help communities grow. so we know we need more voices and we know we want a more inclusive community. so the big question next is where as a movement do we want to go to it? you knew you weren't going to get out of here without me bringing up strategy in some way. i want to make a request for all of us sitting here in this room.