[Public Papers of the Presidents of the United States: William J. Clinton (1994, Book I)]
[May 9, 1994]
[Pages 866-874]
[From the U.S. Government Publishing Office www.gpo.gov]



[[Page 866]]


Remarks and a Question-and-Answer Session With the Association for a 
Better New York in New York City
May 9, 1994

    Thank you very much. Lou, you are certainly richer than I am, but 
that ain't saying much. [Laughter] If only the people who weren't were 
compelled to stay here and the rest of you could leave, we could hold 
this meeting in a closet. [Laughter]
    I am delighted to be here. And I thank Senator Moynihan for coming 
with me, and I'm glad to see the Members of Congress who are here. I see 
Representative Maloney and Congressman Schumer, but I have been told 
that Congressmen Nadler, Towns, King, and Serrano are here. They may not 
be, but that's what I've been told. If they're not, don't be 
embarrassed. They've heard this speech before. [Laughter] Charles Rangel 
is on our official delegation, along with the Vice President and Mrs. 
Gore and the First Lady, to the Inauguration of Nelson Mandela. So 
that's why he's not here. And I think that my national economic adviser, 
Bob Rubin, and my Deputy Chief of Staff, Harold Ickes, are also here. I 
thank them for coming with me. I never like to come to New York alone. 
[Laughter]
    Let me say--Lou Rudin has already mentioned this, but unless you had 
been there, you cannot imagine what an astonishing thing it was that the 
House of Representatives passed that ban on assault weapons. And if it 
hadn't been for Charles Schumer lighting that little candle in the 
darkness when everybody else said it was dead, it was over, there was no 
chance, we would never have made it. It was an astonishing thing.
    It just shows you that democracy can work, that systems can change, 
that things can change. But you have to work at it, and you have to be 
willing to fight those battles that don't always end in a landslide. We 
won by two votes on this one. That's twice the margin we had on the 
economic plan last year. [Laughter] But when these things come up, it's 
important to take the position, stake it out, and try to change. And 
there are a lot of wonderful stories; I wish we had time to tell them 
all today.
    I'd also like to say I'm glad to be back before this organization. 
About 8 years ago, I spoke to ABNY when I was the Governor of Arkansas 
and I was organizing a group of southern Governors to support the 
continuing deductibility for State and local income taxes. Remember 
that? And you had something to do with me coming here.
    I remember--I liked that better then, because I was--at home we call 
that preaching to the saved; everybody agreed with what I was saying. 
They thought, what is this crazy guy from a little State doing up here 
taking a position that may be against his own economic interest? I 
thought it was the right thing to do then in the interest of federalism; 
I still believe it was the right thing to do. But I remember well that 
fine day that I had the first opportunity to see this remarkable 
organization.
    Today I want to say a few words about the health care debate in 
which the Congress is involved and in which many of your Members will 
play a pivotal role, none more than Senator Moynihan because he's the 
chairman of the Senate Finance Committee. But I'd like to put it in the 
context of all the other things that are going on.
    We're at one of those rare moments in history in which, while we 
clearly have serious responsibilities around the world, ones that we 
have to meet in new and different and innovative ways, we also have an 
opportunity to look at ourselves very clearly and to try to strengthen 
ourselves from the grassroots as we move toward the next century; one 
that I think will be an exciting world of more open trade borders and 
constantly changing economies; one that will, to be sure, still be full 
of danger and disappointment but one that can give the American people 
an astonishing amount of opportunity if we do what it takes to play a 
leading role and to give all of our people a chance to live up to their 
full potential.
    We can only do that, in my judgment, if we find ways of facing our 
problems and building our bridges to the rest of the world by being 
faithful to our traditional values and adapting them to the world toward 
which we are going, by giving our citizens the freedom they need to make 
the most of the opportunities they'll find, and demanding that all of us 
take respon-


[[Page 867]]

sibility for our common future by strengthening our families, our 
education system, and our system of work, and by rewarding the work of 
citizens by telling people that if they do what it takes to compete and 
win, they will have a chance to do just that.
    We can't allow our people to be helpless in the faces of the changes 
that are coming, a world in which the average 18-year-old will literally 
change work seven or eight times. Giving them the confidence and the 
capacity to embrace those changes is a big part of my job as President 
as we move toward the end of this century. We've fought hard for an 
economic strategy that will create a more stable and more prosperous 
America, beginning with an understanding that the private sector is the 
engine of wealth creation and job creation.
    Last year, the Congress passed, against enormous opposition and the 
threat of recurrent gridlock, the largest deficit reduction plan in 
history. We used honest numbers, and Congress and the President didn't 
argue over whether I had given them unrealistic budget assumptions. We 
proposed real cuts, and soon, we will cut our deficit in half.
    This year or next year, our deficit in America, as a percentage of 
our annual income will be smaller than any of the other major industrial 
countries in the world. That is a huge turnaround from the 1980's.
    If the Congress adopts the budget before it now, and it's passing at 
a record rate, 100 Federal programs will be eliminated, 200 others will 
be cut, and we will have 3 years of declining deficits for the first 
time since Harry S. Truman was President of the United States. That is 
one of the reasons, along with the enormous changes which have been made 
in the private sector in this country, that consumer confidence is up, 
investment is up, productivity is up, and inflation is down.
    Last week, we learned that last month our economy produced over a 
quarter of a million new jobs and has produced about a million in the 
first 4 months of this year. Over the last 15 months, the economy has 
produced about 3 million new jobs, nearly all of them in the private 
sector, again, a rather marked departure from the experience of the last 
few years when a very significant percentage of the jobs were created by 
Government.
    Now, we know that there are still a lot of problems. There are still 
a lot of people who want work, who don't have it. There are still a lot 
of sections of the country that are lagging behind. But we are moving in 
the right direction.
    Last year, the Congress also, working with me, gave us what most 
experts said was the most productive first year of the Presidency, 
either since Lyndon Johnson's first year or Eisenhower's first year, 
depending on how they count in Washington; I can never quite keep up 
with it. But anyway, we had a good year. We passed the Family and 
Medical Leave Act after 7 years of gridlock. We passed the Brady bill 
after 7 years of gridlock. And it is already beginning to save lives. It 
is beginning to have an impact.
    We dramatically expanded a provision of the Tax Code called the 
earned-income tax credit, which is designed to lower taxes for working 
people with children who hover right at or just above the poverty line. 
It is, in many ways, the biggest incentive we have for people to stay 
off welfare and stay at work, by saying that the tax system will not tax 
you into poverty, instead, it will reward your willingness to work.
    We have a lot to do in the area of education and training. But 
already this year the Congress has passed two of the three legs of our 
comprehensive education program: first, the Goals 2000 bill, which gives 
us national education standards written into the law of the United 
States for the first time in the history of the Republic, supported by 
grassroots reforms and all kinds of incentives to achieve them in our 
public schools; and the school-to-work legislation, which will begin to 
establish a network in America of education and training for people who 
do not wish to go on to 4-year colleges but must have some further 
training after they leave high school in order to be competitive in the 
global economy and get good jobs with growing incomes.
    Still to be done is changing the unemployment system into a 
reemployment system. Most of you who are employers pay an unemployment 
tax for a system that's been out of date for some time now, a system 
that assumes that when people lose their jobs they're just laid off 
temporarily and they'll be called back. So the unemployment taxes 
provide a pool of money to support people at a lower level than their 
wage but a sustainable level until they are called back. But the truth 
is most people are not called back to their old jobs today. And so we 
need to transform this system from an

[[Page 868]]

unemployment system to one that begins immediately to retrain and 
replace people for new jobs in the economy.
    Finally, something that Senator Moynihan has worked on a long time, 
we have to complete the work of welfare reform. In the end we are going 
to have to end the system as we know it. We are going to have to say, 
we'll provide education and training, we'll have a fair Tax Code, we'll 
have health care coverage for your kids. Once we do all these things, 
the system itself should come to an end at some point, and people should 
be provided work opportunities which take precedence over welfare.
    One other thing I have to say, since we've all clapped for 
Congressman Schumer, is the crime bill has not passed yet. It's passed 
the House and it's passed the Senate, but they haven't agreed on a bill. 
And it is a very big deal for New York. The crime bill will have another 
100,000 police officers. You have already seen in this city the evidence 
that crime can go down if you have neighborhood policing with real 
connections to the community. This 100,000 police officers will help to 
do this. It provides more funds for States for punishment and for 
alternative forms of punishment and more funds for prevention. And now 
it will provide the assault weapons ban. But it has not passed yet. And 
it is very important that we keep up the pressure to get the two sides, 
the Senate and the House, together to make an agreement, get the bill 
out quickly, and pass it as quickly as possible so that we can begin to 
show the benefits to the American people on the streets where they live. 
All these things are now in progress.
    As proud as I am of all this, I have to tell you that it will not be 
enough to help us to deal with our present problems or seize our future 
opportunities, in my judgment, unless we deal with the health care 
situation in America, a crisis that has engulfed millions of people and 
stories that my wife and I have heard in letters and personal 
encounters, one that threatens the future stability of the Federal 
budget, one that threatens these fine teaching institutions you have 
here in New York and indeed the whole very fabric of our American 
community.
    I wish I could just share with you any number of the unbelievable 
numbers of letters that I have received from middle class America and 
sometimes upper middle class Americans who lost their health insurance 
or who have a child with diabetes or the mother had an early breast 
cancer or the father had an early stroke, and they've got a preexisting 
condition and they can never change jobs again, or the number of small 
businesses who tried so hard to cover their employees, but their 
premiums went up 35 percent and 40 percent a year.
    I can tell you this: This budget I sent to the Congress--to give you 
an idea of the budget implications of the health care crisis--the budget 
I sent to the Congress cuts defense quite a lot. I think it cuts it as 
much as it should, and I hope it won't be cut another dollar right now 
with the challenges we face in the Pacific and elsewhere. But defense 
has been brought down dramatically since 1987.
    This budget cuts overall discretionary domestic spending for the 
first time since 1969. We still spend money, more money on Head Start, 
on education programs, on women's health programs, on medical research, 
on education and training, and on new technology. Why? Because we 
eliminate 100 programs and cut 200 others. So we increase spending on 
the things we should, but overall domestic, discretionary spending is 
cut in the budget I sent to the Congress, for the first time since 1969. 
And still, if we adopt this budget in 1996 or '97, the deficit will 
start to go up again. Why? One reason only: Because health care costs in 
the Government's programs, Medicaid for poor people, Medicare for the 
elderly, are going up at 2 and 3 times the rate of inflation. So that, 
by the end of this decade, you will have pared down the defense system 
as much as it can possibly be pared down, you will have cut domestic 
spending, in many of our eyes, more than it should be cut, given the 
level of public investment we need in infrastructure and other things, 
and we will still have a rising deficit only because the only thing that 
will be going up in this budget is Medicare and Medicaid.
    And at the same time, we find more and more of our finest teaching 
hospitals having more and more budget problems because people are being 
forced by their employers into managed care networks, and they're 
pulling out of more expensive care. And more and more folks are showing 
up at the door without health care coverage, uncompensated. This system 
eventually is going to cost everybody.
    Now, the institutions of health care in this city, as Senator 
Moynihan never tires of telling me are the finest in the world. And New 
York-


[[Page 869]]

ers have set standards for expanding coverage and for returning 
insurance to what it was meant to be: a fair deal at a fair price. I 
know that Governor Cuomo, especially, has worked very hard at the State 
level to control costs by keeping people healthy, not just by treating 
them when they're sick. A lot of things have been done. But it is clear, 
I believe, to everyone who studies this problem that until we find a way 
to provide health care security for all of our people and to ask 
everyone to bear a fair share of personal responsibility for the cost of 
health care, we are not going to be able to deal adequately with the 
institutional problems that we face.
    What I have recommended is a system which is the most conservative 
change I think we can make, building on what we have: asking all 
employers who do not presently cover their employees or who have very 
limited coverage to pay a fair share of their employees' health care 
overage and asking the employees to pay some as well. I think that is a 
fair thing to do.
    I just left one of your distinguished retail operations here, a big 
food chain headed by Mr. Jack Futterman, who is here. He joined with 
Doug Dority, the president of the United Food and Commercial Workers, 
today to advocate our requirement, our proposed requirement, that all 
employers who don't cover their employees at least made some 
contribution to their employees' health care and that employees also 
make some contribution.
    If we don't do something to provide universal coverage, if we don't 
do something to have a system in which everyone has health security, 
you're going to see more and more and more of the present problems. 
Today in America, 100,000 employees a month lose their health care 
coverage for good. Today in America, millions of people, 81 million 
Americans to be exact, 81 million in a country of 255 million, live in a 
family where someone has had a preexisting condition. And what that 
often means is that the person either can't get health insurance or the 
person is locked into the job they're in because they can never change 
jobs. Because if you change jobs and go to another job, the new employer 
won't be able to cover you. This is going to become a bigger problem as 
big employers downsize and more and more new jobs are created by smaller 
employers. The structural changes in the American economy are going to 
accelerate this problem of providing affordable health insurance.
    So what are we going to do to change it? Many of the people who are 
opposed to this say, ``Well, you're going to break small business if you 
require them to pay anything.'' The truth is most small businesses pay 
something for health insurance, but their premiums, on average, are 35 
percent higher than larger business or Government. They're getting hurt 
by it.
    The truth is, if you have a chain of food stores, like the one I 
visited today, and they cover their employees, they're at a competitive 
disadvantage to people who don't. But many do it anyway. And it isn't 
just the 39 million Americans who don't have health insurance; it's all 
the other people who are at risk of losing theirs.
    If you think about it, very few people in American today have 
absolute security that they can never lose their health insurance, very 
few people. You have to either work for Government because you think 
Government will be there until the end of time and you think you'll 
always have that job, which may not be predictable because governments 
are downsizing, too, now, or you have to work for a company that is not 
only big and strong but one you're convinced will never downsize or at 
least won't downsize on you.
    So this is an issue that affects all Americans. If you believe that 
everyone should have access to health care coverage, as they do in every 
other advanced economy except ours, there are only a couple of options. 
You could do what the Canadians do and say, ``We'll have a private 
health care system, but it will be publicly financed.'' That's what we 
do with Medicare in America. We have a payroll tax and we pay for the 
health care of elderly people, and then they pay something for their 
health care depending on what they can afford to pay. It seems to me 
that that was the most dramatic change we could make, because that would 
actually just basically take all private health insurers out of the 
system, and it would remove the kind of incentives you have in a country 
like Germany, for example, where employers and employees have a vested 
interest in trying to continue to keep up the pressure to hold down 
health care cost increases.
    So I rejected that approach. If you're not going to do it that way 
through taxes, then people have to pay for it who don't have it now.

[[Page 870]]

And there are two ways you could do that. You can continue the system we 
have now, where employers and employees share the burden and allow those 
employers who want to cover it all to do so. Or you could pass a law 
saying anybody that doesn't have coverage now will have to buy himself 
or herself, the employees, the so-called individual mandate.
    There are several problems with that. Number one, it becomes much 
more expensive in the subsidies you have to provide the low-wage 
workers, because employers who aren't providing anything don't have to 
do anything. Number two, it's like automobile liability insurance, it's 
harder to enforce, and often you don't find out people don't have 
coverage until they're sick and they need it. And number three, it would 
leave an enormous incentive, if widely applied throughout the society, 
for employers who are providing coverage to their employees now, to dump 
the coverage.
    So it seems to me again the responsible thing to do is to extend the 
system that we have now. Nine out of 10 Americans and 8 out of 10 people 
in New York with private health insurance have it through their 
workplace. Eight out of 10 Americans who don't have any insurance have 
someone in their family who works. Therefore, it seems to me the 
logical, the most prudent, and the easiest and most easily understood 
way to cover everybody is to extend these benefits in the workplace and 
to provide two things to small businesses and self-employed people. One 
is a system of discounts so they can afford to buy decent coverage. And 
two is a system in which they can become part of a buying pool so that 
small businesses and individuals can buy on the same favorable terms 
that big business and Government can. That is quite simply what we try 
to do.
    Now, we believe if we go to this sort of system and then provide for 
people to be in big buying groups where they can compete for health 
care, billions of dollars will be saved just by the end of the decade, 
that we will not continue to see costs go up at 2 and 3 times the rate 
of inflation, and that the savings will be broadly and fairly shared. 
Today, you know, medical inflation has gone down in the last year as it 
almost always does when we seriously considered reforming health care. 
But the benefits have flowed disproportionately to those who have access 
to big, managed care networks and not to those who do not.
    So I will say again, it seems to me that this is an issue, for human 
reasons, for economic reasons, for reasons of our ability to manage the 
Federal Government's budget, has to be addressed and ought to be 
addressed this year. This is a thing that is going against the whole 
thing we want to do in America, which is to promote labor mobility by 
freezing tens of millions of people in the jobs they're in because of 
the health care problems of their families.
    The system we have now clearly discriminates against small business, 
when small business is the energy behind most job growth in America. And 
the system clearly discriminates against you if you're responsible and 
you provide health care, because of the billions of dollars in cost-
shifting. The system is also causing serious problems now or in the 
future for the great academic health centers of our country, including 
those here in New York.
    For 60 years, Presidents and Congress have grappled with this 
problem. Richard Nixon proposed an employer requirement to cover health 
insurance in the early seventies, sponsored by Senator Packwood from 
Oregon, who is still in the Congress. We have debated this over and over 
and over again. What is the difference today? The difference today is, 
any number of medical associations have come out for what we're trying 
to do. Hundreds of small businesses have stood up against the relentless 
lobbying of the NFIB against the employer requirement, rooted in part in 
the fact that the NFIB has a lot of independent insurance agents who are 
obviously vested in the system we have now.
    We have a lot of big business, even retailers, who are now saying 
the time has come for all Americans to have health care security. It's 
the only way to control health care costs. It's the only way to have 
genuine competition. It is the only way to guarantee labor mobility. It 
is the only way to reward work over welfare.
    Just consider this--I'll say this in closing. Senator Moynihan's 
worked on this welfare issue all these years. Consider this: If you are 
a person on welfare and you are a person with a limited education and 
you take a job, chances are you'll get a job at a very modest wage, 
often in a company that doesn't have health insurance. Then you can 
begin working, drawing an income, and paying taxes to go to pay for the 
health care of people who didn't make the decision you did, instead, who 
stayed on welfare.

[[Page 871]]

    That is the system we have in America today: Go to work, lose your 
health care benefits; stay on welfare, keep them; go to work, pay taxes 
for the people who didn't make the decision you did. That is just one of 
the incongruities. The only way to fix it, ever, is to provide health 
care security for all of our people. Every other advanced country in the 
world does it, and we ought to do it now.
    Thank you very much.

[At this point, the President left the room briefly to meet with Vina 
Drennan, widow of Fire Capt. John Drennan, Jr., who died in the line of 
duty. After Lou Rudin, president, Association for a Better New York, 
invited participants to ask questions, the New York State comptroller 
asked the President how the health care plan would relieve State and 
local governments of the burden of Medicaid.]

    The President. Well, they will do one thing for sure and another 
thing, maybe. And let me try to be explicit about that. There are--in 
New York, as nearly as I can tell--I've studied these figures over the 
last several years for your State; this year I think the Medicaid budget 
went up something like 15 percent. If our plan passes and Medicaid is 
folded into the health care system generally--that is, people on 
Medicaid will go into large purchasing groups, along with folks from 
small businesses and medium-sized businesses and others, and the working 
poor, many of whom get Medicaid supplements in this State and others--
that's quite a large part of your burden--will be paid for in a 
completely different way, that is, employers, employees in a Federal 
discount, then the rate of increase in Medicaid costs will be 
dramatically less than it is now. So over the next 4 or 5 years you will 
save quite a lot of money.
    In addition to that, the hospitals here who have large Medicaid 
burdens will be better off because the Medicaid population will be in 
with the whole population, and the reimbursement rate will be the same 
for everybody. So that will take a significant burden off the hospitals 
with high Medicaid costs here.
    Now, the other big issue in New York has been, is it fair for New 
York to have a 50-50 match when Mississippi gets an 80-20 match? Maybe 
New York should pay more than Mississippi because there are more wealthy 
people here. But there is also a huge poor population here. In other 
words, is it fair to have this match rate based overwhelmingly on the, 
essentially, the average income of a State, the per capita income? We 
have a commission that is meeting on that, which is supposed to make a 
report to us in, I think, 1995, next year, about how to change it. 
There's no question that the formula should be changed and that States 
like New York with high per capita incomes but huge numbers of poor 
people are not treated quite fairly under a formula that only deals with 
per capita income. And that's going to happen next year.
    But we reasoned, and I think properly so, that in order to pass a 
change in a formula like that, we needed to have an adequate study, we 
needed to have an alternative, and we needed not to mix it up in the 
whole question of providing health care coverage for all Americans, 
which we're having a hard enough time passing as it is.
    So we put in this system to review it, come back in '95 and deal 
with it. So I think that that will also happen. I think you will get 
some relief there. But just passing the bill will save you a ton of 
money on Medicaid over the next 5 years.

[A city councilman asked about provisions to help cities deal with the 
health care needs of illegal aliens.]

    The President. Well, as you know, presently, basically undocumented 
aliens often just become--their health care bills often become the 
burden for the States of the localities. What we propose to do is not to 
give undocumented aliens health care security cards, because if we did 
that we would basically be further rewarding people who get around our 
immigration laws, but to continue to handle them through the public 
health units that now do it, while providing a direct funding strain for 
the public health units to deal with the alien health care costs.
    There will be a big debate in the Congress, and one of the things 
Senator Moynihan and the others who have jurisdiction over this in the 
committees will have to hash through is exactly how much money should be 
in the fund for undocumented aliens to go to public health units in New 
York, in Florida, in California, New Jersey, the States with big 
burdens.
    But under our plan, at least, there is a special fund which 
recognizes that we are not doing enough to help the States deal with the 
burden of health care for undocumented aliens.

[[Page 872]]

    Q. Mr. President, my name is Joe Califano. Delighted to have you 
here, Mr. President.
    The President. Also, I should say for Joe, we also have 
comprehensive drug treatment as part of the package of benefits.
    Q. That's what I was about to ask you. New York City has one of the 
toughest substance abuse problems in the country, and what does your 
bill do for substance abuse?
    The President. I think, Joe, I should make two points. One is that 
our bill, as it's presently written--and this is, again, a big problem 
for the Congress to deal with, but we thought that one of the reasons 
our bill is somewhat longer than some of the other bills is that we deal 
with a lot of other things other folks don't. What's going to happen to 
the academic health care centers, what's going to happen to the 
undocumented aliens--all of those things that have been--we believe that 
there should be a package of benefits which includes primary and 
preventive benefits and which includes comprehensive alcohol and drug 
abuse treatment in the benefits. And we believe it will save this 
society a fortune over the long run. And one of the real hard decisions 
that Congress will have to make and that we will have to deal with is 
whether we should continue to be a nation that closes the barn door 
after the cow's out.
    You should know--and I didn't get into all this in my speech with 
you--but our bill is heavily weighted towards primary and preventive 
health care: mammographies for women whenever the doctor thinks it's 
appropriate and free from age 50 on--and just things like that, and 
comprehensive alcohol and drug abuse treatment benefits and any number 
of other primary preventive care treatment. So that's covered in the 
basic benefit package.
    In addition to that, in this year's budget there is a 12 percent 
increase in funds for drug education and treatment, even though we're 
cutting overall spending. And in the crime bill there is a huge increase 
for drug and alcohol abuse treatment for people who are incarcerated or 
who can avoid incarceration if one of the conditions of avoidance is 
being in a treatment program.
    Q. For those that don't know, Joe Califano was former Secretary of 
HEW a few years ago. Joe, thank you.
    The President. He's also the head of the Partnership for a Drug-Free 
America, which is why I knew the answer to the question before he asked 
it. [Laughter]

[A participant asked about health care quality and academic health care 
centers.]

    The President. This is a rather complex issue, but I'd like to talk 
about it in a little bit of detail, because it's so terribly important 
to New York, if I might. The academic health centers today are mostly, 
by accident of history, located in large cities. They treat, as part of 
their ongoing teaching functions, huge numbers of poor people. They 
also, historically, have treated huge numbers of professionals and 
others who have wanted to come to them because of the high quality of 
their care.
    They are now getting it coming and going, for the following reasons: 
The more poverty concentrates in areas where academic health care 
centers are, the more people they have to treat who basically have no 
compensation for their care. So that hurts them financially. And then, 
as you just heard, the more people--more employers put their employees 
in managed care networks, the more likely those networks are then, the 
people making those choices, to choose the lowest cost health care 
option available, which may steer income, again, and opportunity away 
from the academic health care centers, ultimately undermining quality, 
ultimately undermining the ability of the United States to train, 
educate, and provide the finest doctors in the world, as well as ongoing 
medical research.
    This is a huge deal, much bigger than it would appear at the moment. 
It goes way beyond the number of patients who stream in and out of 
Sloan-Kettering every year because it has implications for the entire 
United States and the whole quality and fabric of our health care 
system.
    We seek to do two things in our bill which I think would help. One 
is, while I strongly support the whole concept of managed competition 
and managed care, I believe that we should leave more choices, and I 
think economically we can leave more choices with the employees or the 
patients, if you will. So under our plan, each health alliance would 
have to offer every employee at least three choices, although we think 
that employees--people will be offered more choices. Under the Federal 
employee health insurance plan, for example, which is a pretty good 
model, we have probably more than

[[Page 873]]

20 choices. But you would have a range of choices so that it wouldn't be 
the employer's decision alone. The employer's contribution would be 
constant, no matter what. The employer wouldn't have to pay more.
    But the employee would have the option, at least to enroll in a fee-
for-service medicine or enroll in a Sloan-Kettering plan, for example, 
even if it were a little more expensive, because you could get a wider 
range of doctors or higher quality or whatever. So we'd have more 
choices there.
    The second thing that we do is to try to provide for a direct fund 
to the academic health centers in recognition of the fact that you won't 
get the--there won't be a Medicare disproportion of share payment 
anymore because everybody will be covered. There's going to have to be a 
direct fund. And it's sort of like the question this gentlemen asked 
about undocumented aliens.
    There will be a big argument about how much money should be in the 
fund, but plainly the United States has been supporting academic health 
care centers directly through medical education subsidies but indirectly 
through this undocumented--this Medicaid disproportion of share payment. 
And the time has come for us as a people, I think, to directly support 
the academic health care centers.
    And what I would just say to you, sir, I met with all your 
counterparts in the Boston area not very long ago, and I told them the 
same thing. We need to go into the Congress, work this out, figure out 
what the financial requirements are, and do it.
    The American people pay 40 percent more of their income for health 
care than any other people on Earth. A lot of it is due to the 
inefficiencies of the system. A part, a small part, is due to the 
excellence with which we educate doctors. And I think every American is 
willing to pay it, and we ought to pay it directly. And so I think if we 
do it right, this health care bill will make your existence more secure 
in the years ahead.
    And the one thing I think you would agree with, if we don't do 
anything your condition will grow more perilous. So we have to do 
something, and the right thing to do is to have a direct support 
mechanism for the academic health care centers.

[A participant asked about people's fear of having to give up a familiar 
doctor for one chosen by an insurance company.]

    Q. Mr. President, I just want to tell you that his father and his 
grandfather come from Texarkana. [Laughter]
    The President. Is that right? No wonder you asked such a good 
question. [Laughter] That's a good question. Give him a hand. He asked a 
good question--[applause].
    If the health care plan is not passed, more and more people will 
give up their doctor. And let me explain why. Most people who have 
health insurance, as I said, are insured through their place of work. 
The employers normally choose what health care plan covers the 
employees. More and more employers are choosing so-called managed care 
plans, where you make--basically you agree to pay a group of doctors and 
other medical professionals a flat rate, and they provide all the care 
they agree to provide during the course of a year.
    If you switch from a plan where all the employees just pick their 
doctor and their hospital to a managed care plan and if that managed 
care plan only permits the doctors, the hospitals, and the other medical 
providers to provide care who are enrolled in the plan, then obviously a 
lot of employees will have to be forced to change. That is happening 
today.
    Today, a little more than half of the American people who are 
insured at work are insured by plans that give them no choice. We're 
already at a little more than half. Now, the plan--so that's where we 
are now. And that trend is growing rapidly as employers try to control 
health care costs.
    Under our plan, at least every person would have access to three 
different types of plans: let's say a managed care plan, like the one we 
described, where you might have to give up your doctor but it would be 
lower cost; a professional organization where a few hundred doctors get 
together and offer health care; or continuing a fee for service 
medicine, continuing the old plan you've got, where you'd have to pay a 
little more, but at least your employer would still make the same 
contribution and you could pick your own doctor.
    So we're trying to do our best to get the benefits of managed care 
and the cost controls inherent in it, the market controls, and still 
give people some choices of their doctors. And as

[[Page 874]]

I said, the law requires three different types of plans, but if you look 
at not only the Federal health plan--California just had a small 
business buyers co-op that's a lot like what we're trying to set up, 
where they had 2,300 small businesses with 40,000 employees go in and 
buy insurance together. And everybody says this is a Government plan; 
we're just trying to do this for everybody. The State of California 
hired 13 people to run this plan. And they were able to lower the cost 
of all the businesses and employees involved and to offer them 15 
different choices by simply pooling them together. That's what I want to 
do.
    I want to try to get the benefits of competition but to leave the 
choice of physician up to the people themselves. And I think that this 
is the best way to do it. If we do it, it will encourage all these plans 
to let all doctors provide services who will do it at the right price. 
That's what I want to do.
    The fair thing to do is to say, okay, we'll provide these services, 
we'll manage this plan, we'll provide these services if you'll pay this 
amount. Then any doctor who's willing to do it for that price, in my 
judgment, ought to be able to do it.

[A participant asked about medical care for children in urban areas.]

    The President. Thank you. You raise an issue which I think is 
important to emphasize here, because it will be an issue in New York, 
and in a different way it's an issue where I come from.
    There are two different questions here. One is, have you covered 
people for the services they need at the time they need it? The second 
is, even if people have coverage, do they have access? For example, 
you've got a lot of people living in this city whose first language is 
not English who are citizens. If we pass this health care plan, how are 
they to know what their benefits are and how they access them? And how 
are we going to do that? That's a significant educational problem.
    In rural America, one of the things our bill does that I'm very 
proud of is provide significant incentives for National Health Service 
Corps doctors. We're going to increase by fivefold the number of those 
doctors going into rural areas and underserved inner-city areas to get 
health care out there to people where it exists.
    But I am convinced that a lot of our children who come from such 
difficult family circumstances are going to have to continue to get 
health care information and some basic health care services in the 
schools. That's why I've always been a strong supporter of the school-
based health clinics. I know that they've become emotionally charged 
around the whole issue of teen pregnancy, but quite apart from that--you 
know, when I was a kid, we got our ear tests, we got our shots, we got a 
lot of things in the schools that don't happen very often any more. So a 
lot of these services, if you want access to be there, in my judgment, 
are going to have to be provided either in or quite near schools if 
we're going to reach these children as we should.
    Thank you very much.

[At this point, the President was presented with a gift.]

    The President. I want to say one thing: As an ardent basketball fan, 
Lou made one minor error when he compared the victory of Schumer with 
the assault weapons with the victory of the Knicks over the Bulls. And 
it's very important for health care, so I'm going to leave you with 
this: The Knicks overcame a 15-point deficit and beat the Bulls with 
fabulous defense. Schumer passed the assault weapons ban by playing 
offense. We cannot pass health care unless we play offense, and that 
means people like you have to tell the Members of Congress it's okay for 
them to play offense and solve this problem.
    Thank you very much.

Note: The President spoke at 1:07 p.m. in the Trianon Ballroom at the 
New York Hilton.