that would have more ef you could write the legislation that the public plan will pay lower rates for the private insurance payment, you did say that they could pay the rates under medicaid, where medicaid + 5%, or medicaid + 10% son or your choice. if one simas cent -- require the providers to participate in order to continue participating in medicare, this also brings to bear the market, of the government having tens of millions of users of health care on average. if you bring this connection, you could pay a lower rate and still attract numerous providers to lower the cost. but there is no mystery to that. .

lower prices. there are ways to -- one could set rates that are below private rates without linking to medicare. one could say here is the rate of this plan. take-it-or-leave-it. we think a significant number of providers would take that but providers would take that but not as many providers as would take it if it were cling to medicare. the more you try to reduce the prices you pay to providers, the more providers you would lose and one. is medicaid. it has providers who except it but have -- has providers that will not accept limitations and that is the trade-off you face. you lower the prices. that is the sort of letter that one would need to give to a public plan to have a be a substantial savings and cost relative to other insurers. >> if i could follow up on your

question regarding the employer mandate and the issue about why does a seemingly small penalty of relative to the cost of health insurance seemed to help encourage employers to continue offering coverage and people to stay in that coverage. one way to think about it is the difference between paying the penalty and paying for insurance is when you pay for insurance, you get the insurance in return. there is something of value for money. if you pay the penalty that is from the firm's perspective, money wasted. that is one reason it has an effect. the concern is you are offering the subsidies in this insurance exchange that some workers could get. why what the employer not just say i'm going to stop offering coverage and my employees can get the subsidies in the exchange? one thing that affects the comparison is the offer employer

coverage, there is a subsidy that comes from the tax subsidy under current law. people get insurance through their employer did not have to count that as taxable compensation. that is a subsidy of 30%. the factors into the calculus for the employer as well. for an employer -- when an employer makes a decision to offer or not offer it has to do that for all its employees. in general, firms have a mix of workers. some are lower or higher income. the higher income workers would not be getting subsidies in this insurance exchange so would not be attractive for them if the employer dropped coverage. nevertheless, we do in our modeling as you pointed out, we show a net #, annett to affect in our tables for simplicity, but there are some flows behind

that. some people gain coverage and some decide to offer coverage as a result and in particular because of the insurance mandat we think this will lead some workers to say, we want you to offer coverage that you did not offer before. in some cases, four firms, this would probably be more true for smaller firms with lower wage workers who could get subsidized coverage through the insurance exchange. they might well decide that they are better off paying the penalty and not offering coverage so their workers could get the subsidies in the exchange. we do have -- that is the offsetting the effect of flows. a few million people who we project would have coverage not having it as a result of the proposal. >> could i follow on something he said?

>> i want to maintain some order otherwise it will get chaotic. >> you said that about the tax subsidy to employers and employees for the health benefit. if we were to tax health benefits, that would therefore -- of this is a question, that would cause more employers to drop coverage and go into the exchange? >> it depends on how you do it. if you eliminated the tax exclusion altogether, that would remove the subsidy from that side of the ledger as the employers and employees decide what to do. if you count the exclusion that would have a more limited effect because that would only affect some workers and some firms. it becomes a question of for the employer, is the employer taking

the interest of their workers as a whole into account, would it be beneficial? would enough employees get a subsidy to move the way in this exchange? we do project a modest loss of employer coverage in the million or 2 million range. this is relative to an employer based system that is covering 150 million people in our projection. the number can seem large and the percent of employers that are responding, it may be relatively small. >> there is a big difference between the employer exclusion and the employee exclusion in terms of taxable benefits? they are both excluded now. if you maintain the employer exclusion, but tax the employee, and you give a tax credit in effect of that, you will have $185,000 of income

before you have negative tax benefit on you. there is a difference between the employer exclusion and the employee. it needs to be clear for this discussion. >> depends -- if you could replace it with a deduction. that is right. >> i will defer to others who have questions. i appreciate the good work cbo has been doing in trying to inform us on these issues. . . you stated it would cost about 500 billion over 10 years. is that correct? >> yes, sir. >> that number, along with the

600 billion that impact on the deficit from the rest of the bill would push to 21 and 1 cents trillion dollars? >> yes, but i want to emphasize the other part of the letter. the cost of medicaid expansion depends on just what one does in that expansion. when one starts to expansion, how eligibility is judged, a number of features, who is covered, a number of features that are relevant. that is why we say in a broad range. there can be a tremendous difference, depending on how the expansion is specified. >> that was looking at some specific suggestions? >> we looked at, for this letter, we did back of the envelope calculations. we looked at alternatives for other committees over time. we have seen numbers that are a good deal smaller than that and a good deal bigger than 500

billion. it depends on eligibility, when you start it, etc. and a lot of variables going to the answer. >> just to follow up on one of the questions i asked before. in the government-run plan where it does not have any substantial effect on the cost for enrollment projections, you said it could have a small effect for more competition. if we put in some other provisions for competition, that could make a big difference in the government-run plan? is that correct? let's depends what the provisions are. yes, we think competition is important. the way they would be structured in the legislation would strengthen competition. that by taking off the table some of the factors that insurers now use when they compete, about trying to avoid

the worst risks, not to cover the cost of patients with conditions, by taking those things off the table and then by structuring the insurance market so there is an apple to apple comparison, of comparable plans presented in an equal way, that would strengthen competition. we think that would bring down the cost a little bit for all the insurance plans. >> very briefly, an important feature of the proposal is the subsidy is a fixed amount, so you don't get more of a subsidy if you buy more expensive health plan. that would encourage people to join lower-cost health plans and plans to try to be more aggressive in controlling costs. we see an effect there as well. >> i'm more in favor of increasing competition than doing price-fixing. >> one quick question. what is the difference between

the june 15 number and the july 1 number? i've read the letter. if you could describe what did we do differently here to get this different number? >> there are a number of changes. the three largest ones we highlighted in our letter were first that the subsidies available in insurance exchanges would be somewhat less generous. no subsidies for individuals and families above 4% of poverty, as the was in initial legislation. and people blow that would be somewhat smaller subsidies. -- below that. second was the penalty, equity assessment, at a for employers that don't allow for insurance coverage for their workers and pay larger share of premiums. the third factor was that a new

draft ltd. and opportunity for employees that are offered insurance from their firms to receive subsidies because what employers offered was unaffordable. that far wall kept more people in insurance. you can see the difference in the net number of people changing from employer sponsored insurance. that saves you money. those three changes were the most important ones in the $400 billion reduction. >> any questions? you have any questions? >> thank you. thank you for coming. i know you are probably not getting much sleep these days with all these rapid-fire questions. i think i heard you right. you said that unless the congress "empowers" the public

auction does not do much for competition. >> it does not change the cost very much, no. it had little affect in some insurance market sector highly concentrated. that matters a little bit. >> what it does is change the cost of insurance to the consumer? >> again, not a very much. >> and not very much. >> a little effect. >> we mean a whole variety of things the government might jays -- choose to do, such as setting provider payments, which would give it a competitive a vintage or lower the cost and such a way to give it a competitive edge. >> that is right. what i want to go back to medicate. -- >> i want to go back to medicaid. you wrote a letter to senator

gregg --there is an increased cost of the number of people who will be added to medicaid. is that just the federal cost or is that the federal and state cost? >> that is the federal cost. generally speaking, the federal cost is 62%? >> the average is 57%. the government pays 57% of the average cost. >> the tables we tried to do generally have the federal government paying all of the cost for the newly eligible people at least for a while. i think when we look at had been paying all the new costs for the whole 1year budget window. we did one that started in 2013. and then have the federal government paying all the costs. we look the one as are the medicaid expansion in 2010.

-- look at one that had the medicaid expansion in 2010. >> so, the $500 billion includes the assumption that at some time the federal cost is lower because of shifting the cost to states? >> we highlighted in the letter that one of the key issues that could make the cost change was how much the burden would be for the state. >> i'm trying to understand, is the five and $100 billion simply the federal share of medicaid costs for 10 years? then you have anoth-- the 500 b. >> we did report the federal government cost. >> 500 billion over 10 years?

>> correct. there's a broad range of possibilities. one should not think that is associated with the standard 57%. most of the expansions in medicaid that we have seen from different committees, the ones we used in estimating the number, had the federal government paying a larger share than the usual 57%. in some cases, 100% of the cost for some amount of time. >> do you have the ability to estimate what the cost will be to states over the next 10 years in the specific proposal and medicaid? >> we can. >> have you done it? >> we have been asked to do that by senator gregg and others to estimate a particular medicaid expansion on your

legislation as it now stands. we have not had the opportunity to do it yet. the full estimates involve a great deal of time. we have not had a chance. recognizing the schedule you are on, we tried to do some back of the envelope calculations to give you the magnitude. >> you have already been asked by senator gregg and you have not yet been able to do what a particular expansion of medicaid would cost the state's. >> what a particular expansion would cost the federal government, the state board is tricky. if there's a certain percentage set at 100% or 57% or whatever, then we calculate the remaining piece of that. but states have a lot of options as to how they respond to change in medicaid rules. what they end up doing turned out to be more complicated. we had a meeting yesterday where

we've wrestled with that. -- to get at is that one of the ways to reduce the cost to the federal government in this bill is to shift some of the burden to employers. this is through the employer mandate. one thing that nothing is sufficiently understood is how much -- that is not sufficiently in should is how much this will cost the government if we expand medicaid, whether or not we think it is a good program, which i do not. 10% of it is wasted. $32 billion a year cbo has said will solve problems. if i were governor of tennessee, what would i be looking at in 2015 if this bill were to be passed? what i'm hearing is that while it is not written into the bill is that there are assumptions

and the finance committee, and you are relying on these, that there will be a shifting of cost to the state at some time. that is the talk. it is all not -- it is not all written down and down. that is the talk. >> there are plans that we have seen. some examples of we have done, with the government does not pay 100%. there some examples where they do pay 100%. it is not impossible to hit $500 billion. it is possible to hit that with the federal government paying the full 100%, as long as one takes the other variables. >> two more questions. did the $500 billion include any increase in payments to providers? >> no. >> it did not. my final comment would be

this, the talk i heard, the assumption that were being made, was that a possible scenario of the combined bill would be dead two changes would be made to medicate. one would be, and now i do -- like you to comment on this, the medicaid would be expanded to 150% of the federal poverty level. that would be one requirement. the second would be the payment for providers -- there would be doctors to serve the 60 million people who might be added to medicaid. payment for providers will be increased to 110% of medicaid. i called the governors and their own state medicaid office and asked if that were shifted back to us, our share of it, which tennessee is about 40%, what would that cost us?

the increase to $150 million, the state share of that, would be about $600 million. the increase in the cost in payments to providers if we cater 40% would be another $600 million. it -- that is equivalent of a belts -- of about a 10% new state income tax. in other words, these days do not have that money. -- the state do not have that money. i'm trying to figure out whether we are slipping. i want to make sure we go in with our eyes wide open. we are going to expand medicare, there needs to be no possibility that the state would have to pick up any of it or that we say up front with reputable information about what it would cost in oklahoma and tennessee in connecticut if this

shifted gradually back to the state by 2015. center greg's letter and ask questions that will produce those answers. allied to frame a letter to you that would. -- i would like to frame a letter to you that would. >> the finance committee and budget committee are raising probably a whole series of questions that would reflect various formulations of the 100% federal pickups, 57%, somewhere in between, probably tried to get a range numbers what the implications would be. we did not do that because it is beyond the jurisdiction of this committee. we are relying what the committees, with their cells. they are asking for the cbo to score what we have jurisdiction over. we stayed away from that clear question, which is clearly the jurisdiction of the finance committee. it is a good question. but that is a fair point.

the fact of the matter is, and the whole concept of the bill depends on a large expansion of medicaid. that is one way to do, although i do not support it. that is going to be the end result. i would like for us to come up was and then that connecticut would nether -- if those seven the conn never four, we ought to know that before it had sought a bill that assumes we can expand it. >> the burden on state is an important issue. we will try to provide whatever information we can about the effects of that. >> do i need to supplement the letter in order for you to do this or is that letter sufficient? >> you have asked me now. together with the letter -- >> thank you. >> out by my colleagues to be respectful for each other in regards to time. >> my understanding is if you

want to accomplish the extent of coverage that we are trying to accomplish in this bill or are headed toward, we want to do it through having subsidies available to more people and have medicaid available to fewer people so that you said in some of medicaid coverage going to 150%, it was a bad 100% -- it would stop at 100 and. the subsidies was started 100% of the federal poverty level. my impression is that is significantly more expensive to the federal government, because the subsidies are going to cost much more than the federal government's payments under medicaid. i just wanted to get your reaction on that. i know that part of that explanation may be that medicaid does not pay that.

i did want to know what is the trade-off is. >> an important difference between medicaid and insurance to me by 3 exchange is the payments that are made to providers. the other crucial issue is how jenner's the package is in the exchange. -- generous the package is in the exchange. medicaid has extremely low cost sharing. the value of medicaid is in the order 98% or 99%. in exchange depends on how you structure different legislation. the federal government would be paying subsidies that would not take the value up to 98%. it will be a little lower. that provides some offsetting savings in the exchange. more is paid to providers, but generosity of the support for

the package is less. there is also the case that it can be state federal issues. states could be paying something amok -- and medicaid be now. there are a number of features that are at work. moving from medicaid and into an exchange tends to raise the cost to the federal government. >> thank you. >> one clarification on this subject. when you talked to doug about the 10-year window that to projected for senator gregg's request, is that window 10 actual years after implementation of the bill or is that year 2009-2019, with only have a score for 6.5 years? >> what we mean is the 10-year budget window from 2010-2020. >> it was not acted into 2013, the date you gave, you only have

seven years of cost figured in at 5 under billion dollars? >> that is right. in the letter we rode several weeks ago, we emphasize that one complication in trying to extrapolate budgetary effects of the first 10 counter years, is exactly these plans are generally based in -- phased in. >> i just want everyone to note that this action not 10 years wars of cost. gateway of administrative costs an option is mr. theost -- are disfigured inde those figured i? >> no, in the cost of the gateways are not included for the community plan.

>> we are not all the esti ultimately get them there. >> i know you have registered. part of the new component of scoring, we now have an employer mandate that for any company with 25 or more employees, the it full-time or part-time, if they did not offer health insurance as a benefit for full- time employees, they would be fined $750 a year and four part- time, it would be $350 a year. you also have an additional component of an individual mandate that would be a fine on the individual of $100 a year.

with those two editions, and now the medicaid expansion it not formally part of the plan, in the claim that this covers 97% of the american people be made or do we fall short of the 97%? >> we think you are not quite get to 97% of the population. without the medicaid expansion, you are well short of that. we have about 90% of 89% of the elderly population covered without the medicaid expansion. their other subsidies for people below 50% of poverty. >> the finest in the chart laid out, in 2015@@@@'á

you had projected there would be 35 million uninsured. in 2019 there would be 37 million uninsured, an increase of 2 million. excuse me, that is for the june 15 proposal. >> our analysis that we sent you on july 2, we show the number of uninsured people staying in around 33 million for the 2015 through 2019 timeframe. as compared with a number that would be from 51 million up to 54 million in the baseline estimate without any policy change. >> the addition of an employer mandate, the addition of an individual mandate, both of them, that only increased the

insured population by 2 million people. we went from 35 million up to 33 million uninsured. >> i think it's important to say about the employer payments is that they are resigned to keep -- designed to keep people in employer sponsored insurance rather than moving to an exchange. >> i know we have to go to other members. let me ask this. had he modeled what the employer mandate does. have you modeled what the employer mandate does to job growth? >> we are working on it shortly, hopefully. the analysis of the effects of health-care reform on labor markets should not be specific to this legislation. i'll be more general discussion. it would discuss the debt

affects -- the effects of employer mandates to make certain payments. the short answer to your question is that we at cbo believe that over time that the burden that employers face for individual employees is passed into their -- gets taken out of their wages, essentially. this is whether by voluntary choice or by government mandate. the fact that it turns up in wages is why we and others do not think there will be very large employment effects. people with very low wages come close to minimum wage, a mandate of higher payments -- there will be effectively and increase in minimum wage. that can cause job losses that are small relative to the economy, but important to those people.

our analysis and will address that. >> thank you. >> just a clarification. if you exclude the elderly, you get to than 90%. if you include the entire population, you are close to 97%. >> in order to get to the 97% for the non-elderly, have to do some kind of expansion below or provide a subsidy options. >> are you saying with medicaid expansion and the population as a whole -- >> of any closer to the 97%. -- then you get closer to the 97%. >> my point the medicaid expansions of part of this bill. >> not yet. >> that is a legitimate --

>> that is over 10-years. >> do you have a question? >> i was talking about biologics. your score does not include any savings from fallen biologics and fallen generics. is that right? it is not in the underlying bill, slicing did not score that. >> yes. >> it would certainly bring some significant savings, some kind of falling of biologics. >> you can reach significant savings third change in that way. we discuss that. >> in the length of the period, the shorter the more savings i assume? >> i think that is right.

the natural trade-off is that the exclusivity period is designed for -- during that time, companies that make the product had a monopoly and they will charge higher prices. that is the fundamental trade- off in setting patent lives and explosives today -- exclusivity times. >> do you take into account the ftc report that says a longer period of exclusivity actually means a longer period meaning 12-14 years versus the five we introduce initially and the president's seven years. 12 years acting means less innovation. -- actually means less innovation. you take into account that ftc,

the only non industry city out there, says that is not the case? >> i am not an expert here. i may be wrong in my judgment about that. we would certainly take into account what outsiders it. we had a meeting with a dozen people frothe ftc last week. we have an ongoing relationship with them. we take advantage of their expertise. i can check whether miy judgment is correct for people at cbo with more expertise have a different view than i have and we can get back to you. >> can respond to the committee about that? obviously, it is clear that the longer expanded the more money state. the longer expressivity, -- an

exclusivity mean the difference between 12 or 14. that means less innovation. if you think that was within the next 24-hours, we can make these determinations. >> yes, sure. >> within the next 24-hours. i would like to know the follow- up. i would like to get back to this employer mandate. thank you and your staff for the hard work you have done. i'm sure there have been countless hours put into this hours. we may not always agree, but we really appreciate your effort. on the employer mandate, i think we are in agreement that the primary generator of new jobs in america is small business. there are many of those small businesses, although not all of them, that the minimum wage for

the that is the nature of small business. according to this, $750 penalty for each employee and $350 for each part-time employees will be lost if there is no health insurance and provided to employees. i think we very badly need a steady as to what that does to employment -- study as to what that does to employment and small businesses. that is our hope. that is what we really rely on. i can say an employer that has 30 employees saying, i would lay off six people. i think this can have really significant impact. i suddenly hope there is some way that you could ascertain what that impact might be. can you? >> our analysis that we will

release shortly will confront the issue squarely. aiding the literature on the -- i believe the literature on the effect of minimum wage on unemployment is controversial but is consistent with the basic economic logic that higher minimum wage does cause some to implement laws. the effects are small, and our report will talk about the size of the change in the minimum wage that a health care mandate of different sorts might impose. we will review the literature and the evidence on that. >> my evidence is in total. i can tell you from talking to small business people all over my state, they are sure to get dicks -- they are scared to

death of this. most small businesses are on the margin are going under. today we see that all over america in the unemployment numbers. obviously, we misread the economy. i think this is a very important and vital issue. have you ever done a study as to the effect of the economic effect of we importation drugs? >> i think we have written about that. i am not familiar with it exactly. >> we have looked at that in the past. >> if you have, i would like to have that information. had you ever done a study, for example, of the effects of malpractice reform in california? it is an example of significant medical malpractice reform. heavy denny study on that? >> there is some discussion of that on our volume from december. >> do you remember your

conclusion? but our assessment -- >> our assessment of the literature is that changes in malpractice in the legal structure would not have a very large effect on the spending of medical practices. there can be some direct savings from a reduction in the size of the judgments that are rendered. more indirect effects are making doctors less offensive. it could be quite small. that may be because even with reform, doctors will still be reasonably defensive. looking at the evidence, the stores of changes that have been enacted in different states do not change the defensiveness very much. >> maybe you could call out into

other states that have enacted medical malpractice reform, because i am told that they have significant reductions in health care costs because it reduces the practice of defensive medicine. perhaps we have different information. if the government insurance option has no enrollment in fact, then how does it keep insurance companies on this? >> our view is that a public plan would attract and relieve the issue that we pointed to in our letter to you -- we do not think it has a significant effect on the total number of covered people, but it would attract those that would otherwise be enrolled in other insurance plans. >> i thank you. i hope that we will look carefully at this issue of how much cost shifted to the state. i think we ought to realize that

we have states like california that are issuing out ious. if we are going to drastically increase their medicaid cost, i frankly do not know how my state can afford a significant increase in those costs. it will be important for us to know what those increases would be that will be transferred to the state. good week i'm sure it'll only ta couple of hours of questions to predict couple hours to answer those questions. thank you. >> thank you. thank you for your work. i know yet had a lot of pressure and a lot of work to do in a short amount of time. in your letter -- i am looking at the july 6 -- july 2 letter

-- the top of page two, the second sentence, you say "about 26 million individuals will obtain coverage with the new coverage." that is your conclusion based upon the review of the legislation to date. i guess i wanted to get a sense of the new estimates and conclusions verses the one for me couple of weeks -- the one from a few weeks earlier. do you know that number? >> that was one of the factors that led to the substantial reduction in the overall cost of the more recent proposal. fewer people would end up in the insurance exchanges in getting

subsidies for the various reasons that doug indicated. the subsidies@@@@xr0r the subsidies were made less expensive. it was more difficult to get into the program. some employers were less likely to offer coverage and not end up having those people in the exchange. arnellour analysis had 40 millin people ending up in the insurance exchange compared with 26 million. that was a substantial factor in bringing down the net cost of the proposal. >> i have one question. this is a hard one to answer. i know the limitations you have. one of the frustrations that we have as american people is that there are policy provisions or parts of our legislation,

finance committee legislation, which are not able to be scored for a variety of reasons. f you could just walk through some of that if you can. the reasons why you cannot score particular things or provisions in a lot of the literature and analysis -- there is indication that there are savings. i think it is important for the record to walk through why you cannot score, for example, helps i.t. i think we do try to score those provisions. not everybody is satisfied with that scoring. the evidence that we can draw on is quite limited. when we scored the health i.t. provisions, we included the effects not just of the direct financial transactions to encourage the adoption of i.t.,

but also the indirect effect on the number of medical tests order. we concluded that there would be fewer tests ordered and procedures done. you could see -- we incorporated the effects of that on future medicare spending. we also incorporated the effects of those changes on non-medicare patients. we looked at the effect on cash compensation. we incorporate behavioral responses. >> it is a specific estimate, though, because we do not know how much of the arrival of arrivali.t. -- rival of health i.t. would do.

it is hard to judge. the sort of thing is included. we do try 8 to bring all the evidence that we can on health care quality. it depends on what you are looking for. we do cost estimates and then we try to provide information larry king. we do not agree -- and for a nation where we can. we do not report on how healthy americans will be. that is beyond our scope. the system and the benefits that she may get some quality initiatives -- that is some of the benefits that he may get on quality initiatives. we do not report health. we do try to report on ways that would reverberate back into federal spending. >> one of the key factors is

having more information, i information.t. -- health, i.t. --may have to change the incentives that people face. just because someone has that to mean that they will use it in with a lower cost. sometimes a means of lowering your own income. that is a key factor. thank you. >> i have two votes. i will stay here to finish your question. we will take about a three minute break and come back. we will not try to keep you too long. i apologize. i know you are busy. >> we will try to stay. when the next committee asks me where their numbers are, i will refer them to year. >> i will take two hours figure them out.

>> following biologics, the patent protection and that at the exclusivity is not the same intellectual property protection. i cannot understand why we do not realize that it would take away the robust and exclusivity from companies, there will not be any products. it is that simple. that is why we have to balance that. we worked hard to get that to 12-years. they wanted a lot more than that. that is an important factor that i do not think your data has really done the job on. that is not meant to be a criticism. i think it is true. >> i do not know a lot about this area. we will have to check -- we have a large organization of people that know many things i do not. we will check with them.

>> this is a similar bill to hatch waxman, but it is different because of the nature of biologics. you need to look that much more carefully. i can guarantee you that these companies have to raise the money to develop their follow-up on biologics. it is going to cost $1 billion and take 15 years in many cases to get to hopefully successful drugs. it didn't have enough data as lucidity protection, and there does not going to do. people are not going to risk the dollars to do it. this is an area where we may save more money on health care than any other. all forms of stem cell research, in my opinion. the master of the public plan versus the option. your letter says it will not have a substantial effect on cost or enrollment. am i correct? >> yes. >> how much money with the

federal government spending to create and operate the government plan over the 10-year window? >> i do not know if i know the answer to that question. the plan is not receiving subsidies from the government. it is being run on a basis where it has to break even in its own finances. >> can make an estimate at all? >> i think it would basically incur the costs that a private insurance company would enter an operating the insurance plan. >> my question is if it makes sense to spend any money on an option that will not have any effect on enrollment. >> the statement of enrollment is the statement that the plan had a sick again effect on the total number of people but are injured. we think it would attract its bid again number of people would

be enrolled in other insurance companies. it is our judgment about whether that is desirable change. we think there would be a small effect of greater competition in concentrated insurance market. that would have a small beneficial effect. can you give us some estimate of what it will cost? i would like to have an estimate. >> we can look into that for you. >> i think it is important. let me just say this, you talked about the 15-20 million people who will remain uninsured. what is the typical income category of these individuals? would you consider them low- income? >> i think many of them would be. maybe 1/3 of them are eligible for medicaid. another 1/3 with the unauthorized immigrants.

>> what you mean by an authorized immigrants? what people who are in tour country on their own motivation but not in connection. >> people better in here illegally? >> tha is interesting. -- people that are here illegally? that is interesting. how do you encourage these individuals to take of coverage under this circumstance? how much money should we expect to spend encouraging them that what that is your decision. the more that you try to get from 95% to 99%, the more expensive it will be per person. they have party resisted the subsidies and mandates and so on. they will be increasingly hard

to get. >> one last comment. as a person who actually at one time in his service as an attorney did try medicalize -- medical liability cases, i can tell you that when it the things we told every doctor is that you better at the history completely filled up with every possible examination you can possibly make, if that is the only thing that'll save you in court. we all want necessary defensive medicine, but there is a whole smorgasbord of on defensive medicine. it amounts to a lot more than i think your analysis -- and not try to be critical, but i think you ought to reconsider the. doctors are terrified. these have been over valuations are not necessary. >> question is the extent to the

changes in malpractice law can reduce it. >> we do not have been in this bill. that is the problem. that is very difficult to come to a conclusion with regard to medical liability law. >> we have about two minute. >> have a lot more questions. >> you can call us. >> i personally appreciate the work you have them. you have tried your best to do this. it is a very difficult area. it is almost impossible to get right. at this one to parsley thank you for all the hard work and long hours that you are putting in. -- i just want to thank you you personally for all the hard work that you are putting in. >> i want to ask the remaining members to limit to about five minutes or so. i would really appreciate you staying a few extra minutes. there is a lot of interest. we will get back as quickly as the camp. i'll ask those members to come back right away and limit the

times a week nike the longer the mahan -- amid the times they speak so would not be any longer than we have to. we have done a lot of legislation. you are doing terrific job. we brought the number is down substantially from the june 15 number to the delight to numbers. that is great news. although we have a lot of work to do, we are heading in the right direction. we cannot have dennis about your analysis and advice and counsel. we ought to be grateful for what the congressional budget office has done to guide us through these waters. that is a valuable contribution. we are deeply appreciative of you and your staff. >> thank you. >> stand to recess for 30 minutes.

>> want more of this senate health committee markup of health care legislation at our website. also find a link to the congressional budget office report on the cost of the bill. that is that c-span.org. h[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2008] >> the senate health committee continues the work this morning at 10:00 eastern. we will bring you the proceedings live on c-span 3 and c-span.org. >> how is c-span funded? >> the u.s. government. >> private benefactors. >> a diggs gamez government raised. >> it is not public funding. >> i want to say, my tax dollars. >> how is it funded? 30 years ago america's cable

companies created c-span as a public service. a private-business initiative. no government mandate. no government money. . coming up shortly, the following guests in new we will talk with tim of the american prospect about the white house's proposed consumer protection agency.