the cost shifting. i've heard it is about $100 per family that goes to paying for the cost of indigent care. is that about right? >> i would have to check the numbers. it is certainly substantial. >> thank you. >> can you say a word about the cost of covering prenatal care and early child comprehensive care? >> i think that certainly goes to mr. kaplan's point. in terms of preventive care that has a good pay off, i feel very strongly with the evidence suggesting prenatal and child care is crucial. >> the medicaid program has a program epsdt. are you familiar with that? it is a comprehensive set of benefits. it is -- is it essential that that same set of benefits, which includes preventive screening

tests be available on all accounts? . . when we think about setting up a public auction, it will be able to put competitive pressure on private firms because there may

be more administrative costs. >> is there much difference between the two? >> i believe it is substantial. >> the 25%-45%, is that the magnitude that you understand? >> i have to check the numbers to make sure i am answering correctly. i am happy to give back to you on that. >> thank you. one of the things we are trying to do is to transform healthcare. we are also trying to make sure everyone has coverage. we are doing financial access at the same time. should we do them one at a time or at the same time? >> the president thinks we can do many things at once. i have complete confidence in the congress as well. these are all part of the president's call for a new foundation. they are all aimed at the same

thing which is making this a healthier and stronger economy. >> one of the questions that have been asked is how we pay for it. we are going to be making some decisions on taxes in the next few months. the state tax, what i call the bare minimum fair share tax. where would these be in the this list of priorities compared to universal health care? >> what the president has said it is that he thinks comprehensive health-care reform is crucial. he has given a list of ways to pay for it. about two-thirds of our suggested savings from medicare and medicaid. one-third coming from new tax revenues. he had a suggestion which is limiting the atomized reduction on high-income earners. -- limiting the atomizeitemized

deduction on high-income earners. >> should we pass the tax cuts first and then get around to health care? >> i think we should do extensive health care reform. we need to do it for health care and make sure that it does not increase the deficit in the crucial putin your budget window -- crucial 10-year budget window. >> thank you. >> thank you for being here today. i agree with the economic arguments. we got a medicaid waiver in tennessee to a form a managed health-care plan to cover most of the people in the state of tennessee. what happened was it was a very rich plan offering a lot of benefits.

small businesses and others may be perfectly logical decision to drop private health insurance and go into the government run plan. 45% of the people who are in the plan had a private health insurance but dropped it for the government auction. the problem with the government plan is this. when you talk to providers and hospitals and other providers, it paid 60% of the cost of providing the care. only 60% of the costs. medicare pays about 90% of the cost. so the government plans to not pay the cost of care. the uninsured pay somewhere in between, shifting more costs on to the private insurers. it is about $100-50 -- $100-$150

a month. what i fear in and a government auction is the very same thing will happen on the national stage. you will have a rich plan offered with all of these benefits, and you will have your cost shifted more to you more and more which is to drop the government auction. over time it will happen. in tennessee, what our democratic governor did is he cut the role in one state. -- in the state. [unintelligible] can respond to that? >> it shows how important it is to get the details correct. how one sets up the public plan that all of that is going to be important. one of the things that the tri committee does is it needs to be

on a level playing field. it must be paid for by premiums that are paid into the public plan. that is important. >> if what you just said happened, it we do that need a public plan. we would have another subsidized plan that will guarantee the you do not pay for the cost of the care. i went back to my own group -- my medical group at home. this astonish me. we had offered a high deductible health-insurance plan. we offered it to everyone in our group which is over 300 people. how many people do you think took that plan? 84%. the reason is because they could look at the $5,000 deductible. this is a plan that would be gone with this card plan.

there is no health savings account in this current legislation or any i have seen. what these employees found out is that if you do believe in wallace and prevention, this -- in a wellness and prevention, this is incentivize. 248 of the 300 or so it took up the plan. what do you think? >> i would like to do more research to see if that is a common experience. i am trying to see but plan is more popular with the help the and the affluent. one of the things is if you are bored about the employers dropping their coverage, that goes too much of our discussion of how important employers share the responsibility.

>> they did not drop coverage but allowed the government plan which did not play the providers but only two-thirds costs. i'd like to know how many people will lose theirs. i want to know is will you provide all of this other care comes in, who will provide it? we do not have enough nurses and doctors in america. we have more doctors retiring in the next 10 years. i am sorry my time is up. >> thank you. you have given me great confidence that we are on our way to doing something very reasonable. thank you for your leadership. i have a short question and then a larger discussion.

choice. we are assuming that employer coverage is something that every single employee likes. if you like your coverage, you get to keep it. how many people will feel trapped because they have to keep it? have you look at that and how you see this phasing in which everybody has a choice? >> i think this is an issue that we need to look at more. but the president has emphasized is the importance of the public plan. he wants to make sure that even in the areas where there may be only a few providers that you do have a choice. that is a principle that he thinks is important. >> i will move on to a broader question that a lot of us ask

ourselves up here. what exactly is the economic value for having private insurance. in the first place? >> competition is a good thing. that is something that leads to innovation. it tends to lead to cost containment. i think that would be one of the benefits that one could see from having a private system. >> real competition -- if we do not offer a robust public plant as one of our choices, while they're actually be competition in the system when we write it? >> we think -- depending on how narrow base changes, we know there are many markets where there is not robust competition

and there are one issue providers. >> do you have any hesitation in the federal government providing that a good plan? are you worried that insurance companies cannot compete? they seemed to be quite worried? >> i think it depends on how is designed. we are trying to address that and make sure the public plan is on a level playing field. that is important. >> is our role -- our primary role to offer the public a choice of a good public plan if they want at or is our role to be worried about what happens to the insurance companies? >> i think in general, your role is to come up with a comprehensive reform for health care. the trek committee bill is an

important step in coming up with a bill that encompasses so many of the principles the president said is important. expanding coverage and making the kind of meaningful reform that will slow the growth rate of costs is crucial. >> thank you very much. >> if they fail to obtain acceptable coverage, has your office or anybody in the administration done any projection as to the level a tax on individual that will make it effective as a penalty? how much of a punishment tax isn't going to take to make people sign onto this to get an

acceptable coverage that meets 100% of all the mandates? >> there are a range of estimates out there. one of the things the administration has been very cognizant of is how important things like auto enrollment can be for getting people to sign up for things. we think we can get a very long way by making information available and easily. i would have to do more research to know how much more shared responsibility it will take. >> in this bill, the punished through different taxes people until they sign on to the acceptable coverage. you have not done any projection on what is the acceptable punish tax? >> one of the things the congressional budget office will do is to figure out what has been proposed and if it is large enough to get a large number of

people -- >> there will have to be some punishment tax, some kind of inclination for people to sign on to this, those that do not want to. >> one of the decisions is that there are lots of different views in the bills coming through congress. to have a hardship waiver for a family that says they cannot do it for a particular reason, most of the bills have a clause like that. >> thank you. i will yield the balance of my time. >> thank you. a quick question, a plan is offered better than the federal plan. if we have tax employer benefits, i do not think the president has not ruled that out, and you can keep. you have.

most people who are satisfied with their health insurance are getting it from the employer who subsidizes it. will the tax benefit go up 30% -- with the business below are what they are offered in order to meet the benefit? if we will increase the cost of employer pays benefits by 38%, it will drop down to the credible minimum coverage, so people will lose the value of their benefit. i am from kentucky. we did health care reform in the 1990's. if people can't keep the plan they have, it disrupted the marketplace. i want to focus on taxing the benefits and if you think that will cause a certain behavior. >> one of the things you are getting at that the president has not supported is getting rid of the exclusion for employer

provided health insurance for some of the reasons you talk about and for the issuer -- issue of destruction. if you liked to have, you can keep it appeared he does not want to make changes that will cause major changes in providing health insurance. >> so he is not supporting a bill that will include something that will cause disruption? >> the president' thinks a bettr way to pay for this is limiting the atomized -- itemized reduction. that is what he supports. >> i yield back. >> thank you. >> thank you very much for taking your time to appear before the committee and to answer questions. i apologize to the members who did not get to speak with dr.

christina romer. i think some may want to submit questions to you. if you could respond to those in a timely fashion, we would appreciate it. >> thank you very much. >> i would be happy to. thank you. >> our second panel will be made up of several people. if these people would come forward please. i think we have places for you. one person is the research professor at georgetown university where she directs research on health insurance reform. she served at the u.s. apartment health and human services. she has a b.a. from oberlin

college. our next guest is a very distinguished. she serves as a board member of the commonwealth of authority. she holds a b.s. from the university of massachusetts, boston. in james is a member of an organization that was withheld and retirement benefits for fortune 500 companies. he went to george washington university. he retired in 2001 from one

particular organization. robert is from the heritage foundation. he is involved in a health insurance reform initiative in 2005. he received his degree from the university of arizona. our next guest was an operations manager. she is very experienced. our next guest directed the bureau of health professions. he has a ba from harvard university. welcome to all of you. thank you for your patience

today. you will be given five minutes to summarize your written statement. if there is something you want to comment during your presentation from what you heard from the previous panel, feel free to do that within that timeframe if you think it would be helpful to us. >> thank you. the afternoon to all of you. congratulations on a very good try committee -- tri-committee. your hard work and wisdom and practicality is evident in the proposal. i know we will get the job done. the proposal defines the minimum health benefit standards. it requires all americans to have that level of coverage.

it creates tax credits for small businesses and expand medicaid and creates new cost sharing subsidies to help other americans of modest means. it establishes strong market reform for a private insurance with important consumer protections. it will give consumers, and the victuals, and small employers assistance with enrollment -- consumers, individuals, small employers assistance with enrollment. those who buy coverage in the exchange will have the choice of a new public plan option. the recent national poll indicates that americans strongly favor such an option. it would address the failure of competition in health markets.

private health plans have discriminated against people when they are sick. you're hearing -- you held a hearing last week about a woman who had breast cancer testifying that her coverage had been revoked because her dermatologist noted a condition for acting. -- for acne. a public plan option would promote cost containment. for the first few years, the public an option would pay doctors and hospitals on a basic fee schedule. they will hold down costs and promote quality.

there will be opportunities to modify and improve this. in a written statement, i have several recommendations on this regard. i will briefly describe three of them now. with respect to the central benefit package, the bill creates a benefit standard which is a solid one. it does not create an out-of- pocket limit for care received outside of a plan. that is an important omission to correct. the bill does not reference the benchmark. many have talked about that plan which so many members of congress have coverage today as an appropriate benchmark of minimum coverage for all americans. it is not clear if it meets that standard, but it should. if it does not, the standard should be improved. if it raises the cost of the bill, if you will have to find

additional resources. we will generate more than $187 trillion in gdp and we will spend $33 trillion on medical care. investments in health-care reform guarantees adequate protection for individuals and families is worthwhile. will governing health insurance, new rules will not be meaningful unless there are resources for oversight and enforcement. after the enactment of hit but hithippa, -- hippa, [unintelligible] your final health reform bill must appropriate resources for the department of labor --

middle-income americans with income up to 40% of the poverty level would not have to pay more than 10% of their income toward premiums. some consumers including self- employed who have incomes above that level may force of affordability problems. this is likely for people who have to buy family coverage and for baby boomers who could face higher premiums because of age rating allowed under this bill. i hope the committee will consider setting a premium caps and no american has to spend more than 10% of their income on health insurance. >> >> i am testifying today.

i have court with a board that is a plumbing health care reform in massachusetts. your -- that is implementing health care reform in massachusetts. we have found three reasons. consumers can compare and buy an insurance plans in one place -- compare and find insurance plans in one place. as people move and to subsidize care or the employer market, they have a path they can go. we assess a minimum standard which will protect our market.

there is a way to keep costs down and allow for price competition in the private market. we've been effective in providing subsidized care for low-income families, which do not have a model of how to intervene in the private market. we could pull the costs for small employers and individual people in the market. it could save 40% for individuals who have to buy insurance on their own. there is unfair competition concerns. the public plan needs to pay rates according to medicare or higher. medicare does not pay is low for primary care. you'll have to look at that. that would level the playing field. people would be paying a certain amount and it would limit the amount shifting onto the private

insurance premiums. the benefits standards also need to be looked at. our standards have been critical to keeping the poor from dropping out of our insurance market and protect consumers from predatory insurance companies. we support the affordability scale. 60,000 of the people waved out of our individual mandate or wait out because they cannot afford it. your bill fixes that. we support shared responsibility. employers, individuals, and the government must all do their part to make this a sustainable and affordable system that covers everyone. the approach of shared responsibility has helped the massachusetts health care system. we have government support, individual