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"Health Care: A Bolt of Civic Hope," by Matthew Miller (October 2000)
In an anti-political time the politics of remedy is still possible. Two congressmen, one liberal, one conservative, both versed in the relevant complexities, agree on the bones of a plan to insure the 44 million Americans without health insurance.

Discuss this feature in the Politics & Society conference of Post & Riposte.

WEB-ONLY SIDEBAR | October 2000

Health Care:
A Conversation With
Jim McDermott and Jim McCrery

Following is the transcript of Matthew Miller's conversation with Representatives Jim McDermott (D-Wash.) and Jim McCrery (R-La.) on March 29, 2000. The conversation took place in McDermott's office in Washington, D.C.

Matthew Miller: I really appreciate your doing this. The idea is to use the input from the original interviews with you guys, plus I've talked with a dozen of your House and Senate colleagues, Bill Thomas, Pete Stark, Dick Armey, Bill Frist, and Ben Cardin, plus a bunch of the other folks who are interested in health care. And then with groups like the insurers and the hospitals and the doctors, trying to touch base with all the different groups who have some different kinds of proposals or discussion out there with a hope that there's a way to seek some kind of pragmatic way through which both parties might come together after the election, however the dust clears, assuming there's gonna be some close division of power one way or another, in a push toward universal coverage. The idea would be to have this discussion between you two as colleagues and peers who are very deeply involved in the health-care issue, who come from different viewpoints that evolved over the years, to use this conversation to show how there are some areas that seem to represent common ground, and where the differences are that would have to be resolved, and to talk about it pragmatically as to whether there's a chance politically for something like this stuff to move forward after the election. To start, I was thinking I could play back to you, from all the input from these groups and based on our initial conversations, a sort of conceptual sketch of an idea that might be a point of departure for a proposal that could be considered. Is that something I might share?

McDermott: Your nickel. So whatever you want to do you do.

Miller: The basic thing that I kept hearing back talking to all these folks would be some kind of tax subsidy that would be refundable in some way, generous enough to buy a decent Chevy from among competing private health plans, so you'd have to talk about what that Chevy meant, access to some kind of insurance pool to assure that there would be affordable group rates, phased in, perhaps. Bill Bradley and Stu Butler from Heritage talk about a kind of parallel system that forms. It doesn't disrupt or threaten the current employer-provided system, but it might over time mean that there'd be some migration from private payrolls toward government, and I realize there are big issues within all of this. An eventual individual mandate, be it short term or long term. And then there's obviously a bunch of issues that come up within that. As you know, this is incredibly complex, but that's the sort of area where I've heard some emerging potential consensus. Is that fair? Is it possible to talk about under what circumstances this might be something that's doable?

McDermott: It might be a way to start, sure. Because Jim said … we were standing over there, he said could we come to some common ground, and the question was, he said, well, I've come, I think I've got some common ground with Pete Stark. So maybe they could start with that and...

McCrery: Now your first name is Matt?

Miller: Matt, right.

McCrery: Well, Matt touched on several elements of what I think is common ground between me and Pete [interruption].

Miller: If you could talk loud enough for the...

McCrery: I'll try.

Miller: I know. I just want to capture...

McCrery: I'm not a loud talker by nature.

Miller: No, I understand. I apologize.

McCrery: I have been known to raise my voice, but I try not to.

McDermott: I really have to prod him to get him to do that.

McCrery: Pete Stark and I have not talked at great length, let me say that before I indict him for what he might consider to be an indictment by saying that he's in agreement with me on some of these elements. But Pete and I agree that health care ought to be universal in the sense that nobody is left out, that everybody has access to some basic level, at least, of health care. And how he would define the basic level and how I would define the basic level may be different, but we both agree that everybody in the United States ought to have access to some level of health care.

McDermott: Does that mean when you say that, are you talking about it as though today people do not have access to basic health care?

McCrery: I think...

McDermott: Or some level above that, what is available...

McCrery: That's a good question and I don't think anybody knows the answer. Some would say that everybody in this country already has access to some level of health care. And I think that is probably true in the abstract. If everybody knew what was out there, where to go, they could probably get health care. In Louisiana you can go to any charity hospital and get health care. You can go to a rural health clinic and get health care, community center to get help. There are places for people to go to get health care. But, I would submit that there are people in America who don't know where those places, they don't even know they exist, and they may not have access to health care because of their ignorance of where those things are or what's out there. There are other people who don't have insurance and feel uncomfortable going to a charity hospital or to a free health clinic, so they are reluctant to go. So one might conclude that they don't have access the same as insured people do.

McDermott: The other, the reason I raised that issue was whether or not you consider it access to health care if you don't have adequate access to prevention. Because the difference, well, it seems to me if you have insurance you have some periodic way in which you're evaluated and somebody could say you ought to have this prevention or that prevention done, whereas if you're just operating in the free system when you have a problem, you never pick anything up until you've got a major problem.

McCrery: I think we're getting into particulars here which I don't know we need to at this point, but I disagree with that characterization of insurance. I think most people with insurance either don't have preventive benefits covered or don't take advantage of them. They only use the insurance when they get sick or when they need health care, they need acute attention. I don't think they take advantage of preventive benefits, even if they have them, and many insurance policies don't cover a whole lot of preventive care. I think the difference between insured and uninsured is the point I made about people who are uninsured not feeling comfortable going to the doctor even when they're sick, much less going to get a checkup because they have too much pride, they don't want to take welfare, or they don't know where to go, and so they just put it off. So I think insurance is a key to providing people access to health care. And we have now, as you all know, 45 million uninsured people and I'll quickly say that's not the same 45 million every year, people move in and out of that universe and when you boil it down there might be as few as 10 or 15 million, 10 or 12 million that are currently uninsured. But still, that's a pretty good chunk of folks that we can agree upon.

McDermott: It's rising every year by about 1.6 million.

McCrery: Is it the chronically uninsured?

McDermott: I don't know about the currently but the total number, 45 million.

McCrery: I don't know about the currently uninsured. I'm not saying how… Still, we have a group of people out there who are uninsured much of the time, and I think they are at a disadvantage in terms of having access to health care. And Pete and I, I think, agree that we ought to improve on that. We ought to give people freer, better, more comfortable access to health care. And although Pete has in the past been an advocate of single-payer to solve that problem, I think Pete is willing to explore other ways to solve that problem as evidenced by his effort with Dick Armey to create some tax credits. So I think Pete and I have some common ground on how to address A-that there is a problem and what that problem is, B- some possibilities for solving the problem.

Miller: So if we talked a little concretely about some kind of tax subsidy approach, are there areas you think both sides can come together on? I remember when I talked to you Congressman [McDermott], I remember saying, I understood what your ideal plan might be, but I also heard, I'd say what would it take for you, for example, to go with a kind of tax credit-y, Republican tax credit-y approach, and you had said to me then "enforceable individual mandate; defined benefit that was good enough, generous enough to make it work," something like that, is that...

McDermott: I actually had a bill also with Jim Rogan, which is a tax credit bill. And my view is that I'm not convinced it will work, but in order to get us off dead center because we're sort of at opposite poles, we've got to try something in the middle here and see if it'll work. If it doesn't work, then I think we'll come to me. I mean that's my belief. Someone else may say we'll do something else. But I think the tax credit is an idea that's floating around out there and I'm not sure what the effectiveness of it will be, but I'm so frustrated by having spent 30 years watching it get worse that I'm willing to try practically anything to get us moving. What's fascinating, what is troublesome to me is that we haven't even had hearings about this issue. We haven't even been able to lay it on the table and discuss it, the tax credit idea, which there's Pete and me on one side and Jim and others on the other side, and we don't even get that one on the table. That was the frustrating part to me is how would you get the consensus in the Congress to say we're gonna put this one on the table and figure out which one of the tax-credit bills makes the most sense. Because you got about five or six of them out there. I mean between all the people in the House who put it in, mine is for 30% [of a policy's costs] and Dick Armey's, I don't know what the one he and Pete have talked about, is it 100% or what, I don't know the specifics.

Miller: I think they got stuck in the weeds. When it tried to move from the op-ed [they did together] to legislation, it gets hard.

McDermott: That's, I mean, at some point you got to sit down and say okay we're gonna try an experiment here, see if it'll work. And in my thinking with Jim Rogan, we decided not to go beyond 30% because we didn't want to get into a situation where we started eroding further employer-based insurance.

Miller: 30% meant you would subsidize what?

McDermott: You could subsidize 30% of the cost.

Miller: Of the premium?

McDermott: Yeah, refundable. And...

Miller: Is that enough to get [low income folks to buy a policy]

McDermott: No, I mean, see you would say no, and I don't...

McCrery: In my opinion it's not.

McDermott: Yeah, and what is the right number.

McCrery: 100%.

McDermott: 100%. Right. And my feeling is...

McCrery: I'd give 100% to the very low income; he would give 100% to everybody.

Miller: Well, but there's room to discuss that if it was just you two.

McDermott: Well, the problem, the reason we put 30% out there was because we didn't want, we didn't know, it's sort of Murphy's Law, if you put something out there you never know exactly how it's gonna work. I've had that experience too many times in my 30 years of doing this. So 30% seemed like a good place to start, but there is clearly, at some point, an employer's gonna say, well, you know, why should I be paying for your health insurance. Here's a little bit more salary, go buy your own, I'm out of this business.

McCrery: That's a good idea.

Miller: Why? I mean the idea is that might happen over the next 10 or 15 years. I remember from our talk, you thought it could happen much faster.

McCrery: It can before, you can make it.

McDermott: Yeah, if you take away the tax deductibility and so forth.

McCrery: Sure, it'll happen overnight. Now we can't do that overnight. As I've talked to you [Matt] about, we've got to put in place some infrastructure, some information infrastructure to help people choose among competing policies and so forth. But that can be done. We'd have to do all that first before you made the transition to an individual basis from the, I think, the employer-based system is antiquated, it's outlived its usefulness...

McDermott: It's a relic of.....

McCrery: Yeah, it is, no question about it. It was a historical accident and we ought to...

McDermott: ....price controls until 1946.

McCrery: We need to try to think of a better way to deliver some health insurance to everybody in this country. As far as I'm concerned that means an individual mandate with individual policies, not group policies, not all this Byzantine mess that we've got in the insurance market right now, that frankly insurance companies like.

McDermott: They can make money out of this. And the fundamental question, I mean between Jim and I, is probably, or at least this is what I think it is, is that we have a different view of what's the best way to solve the problem in the society. Is it the government or is it the individual? And if we put the weight on the individual then the government can help some people who need it and others we're not gonna help. And on my side it's I want to make sure everybody's got it. And that way we don't have to worry about the people who aren't gonna take care of themselves. Because one of the problems here, the individual mandate, for me...

McCrery: Jim is right, let me just interject real quickly because this is important, I think. Jim's not gonna get what he wants anytime soon. I or some right-wing person is not gonna get an unfettered market, which is the individuals fending for themselves. So if we want to solve the problem we gotta come up with something that's kind of a combination of government, individual, universal. And I think that's possible along the lines that I've suggested. And we haven't talked about that entirely, but if we don't do anything, if we just keep going like we're going, eventually I think we'll end up with single-payer, we'll end up with the government controlling just about everything in health care. That might take 40 years or 50 years to get there, but we're going that way now, I think. So I'm willing to accept a lot more government intervention in the market than I normally would to create a system that will have some vestige of the market left in it, because I think if we don't do that eventually we'll end up with total government control and I think that would be not the best system for this country.

Miller: You, in turn, would, if he's talking about universal coverage?

McDermott: I'm not willing to wait 40 years.

McCrery: I hope not.

McDermott: I've been waiting 30 years. I gave my first speech on single-payer health care in 1972. So it's not a new song that I'm singing here.

Miller: And that's when Democrats tried to cut a deal with Nixon.

McDermott: Right, oh yeah. But they wanted the perfect system... I'm sorry?

McCrery: Nixon was a squish.

Miller: A squish in what way?

McCrery: I can skip...

McDermott: I don't care. Why do you say Nixon was a squish?

McCrery: He was a squish on a lot of stuff.

McDermott: You mean he wasn't as conservative as he...?

McCrery: Right.

Miller: He was the last progressive president before -- [LAUGHTER] -- more liberal than Clinton turned out to be.

McDermott: You know, it's funny how time gives you different perspective. When you see what's happened, Nixon was not so bad.

McCrery: Nixon was very progressive.

Miller: EPA and all the....

McDermott: There were a lot of things he did. They've been trying to rip them out ever since. [LAUGHTER].

Miller: Can you react a little to, I mean Jim McCrery's talking about universal coverage with using the tax system as a big piece of subsidy but keeping competing private health plans as the source of innovation and product service delivery, because there's so much that's gonna be happening in the next 10 or 15 years. Isn't that a good idea?

McCrery: He had one element that Jim would want to comment on I think, and that is in the system that I envision, besides all the things you just mentioned, there would also be the element of different levels of health care for different people. In other words, somebody who is wealthier is probably going to buy a policy that would be richer in benefits than the basic benefit package that I would pay 100% for from the government. That would enable the market to continue to be more innovative than under a single-payer system, there'd be more money in the market. So that's another element.

McDermott: Why do you think that? If you and I both need to have doctor visits and all this stuff right on up to the level of a bone marrow transplant at $120,000 a crack, what's left above that that you would have the insurance, why wouldn't you guarantee that to everybody in the United States? What would you leave above the line that you would say that people who are wealthier or whatever are better negotiators or whatever and get for themselves. It isn't based on their age and their health status.

McCrery: Well the catastrophic examples are not the kinds of things I'm talking about. Bear in mind, well you don't know this, but I would include everybody in the market. I would do away with Medicare/Medicaid, have everybody in the same market. And as far as those catastrophic instances everybody would be covered for those, but I'm talking about variances in bells and whistles and insurance policies, if you want a private room, if you want extra help in the room, all those things that people could purchase if they wanted to, buy more expensive insurance products they could and many of them would. But the basic plan that would be provided by the government to low-income folks would not have all those bells and whistles. If they wanted to purchase those on their own they could.

McDermott: Would you envision something less than Medicaid?

McCrery: It depends on which Medicaid you're talking about.

McDermott: Some states are different than others.

McCrery: I don't want to get into the specifics of the benefit package because that's gonna be one of the more difficult things to define and to agree on.

McDermott: I've always said that when this passes, the job I want is to be on the panel that decides the benefit package. Everybody puts the panel together.

McCrery: And I'm trying to avoid a specific benefit package.

McDermott: Right, and so am I. I don't want a benefit package to be specific because we will argue until the year 2400.

McCrery: And we'll end up with single-payer.

McDermott: Yeah, we will.

Miller: You do want to define it through a board somewhere?

McCrery: Not necessarily, not specifically. FEHBP is a model to look at. If you look at the FEHBP requirements for participation from the health-insurance companies, it's not a specific benefit that's defined. It is more general areas of coverage that are defined--major medical, surgical--those kinds of things. So I think we can look at FEHBP to discover a model that might work with a universal system.

Miller: Does that work in terms of the level of definition of a benefit package for you? Let me kind of throw in one more question. When I ask people, I understand the Democratic concern. I hear it when I talk to all the Democrats about really wanting to define a benefit package. But the argument that I hear from the Republican side and from some of the policy community is: well, what do those Democrats say about the employer-provided system for which there are no defined benefits, and that's the majority of health coverage in the country today, so what's wrong with not defining the benefit? That was an interesting argument to me.

McDermott: The problem with the present system is that you don't know what you're gonna need. What Jim talked about earlier about needing an educational element in here to educate people, the problem is in shopping, when I'm going out to buy a refrigerator I know the space in my kitchen, it can only be one shape. I can have basically only so much freezing and so forth, do I have an ice machine and automatic defrost and all that. Those kind of nuances I can understand, but he doesn't know what his health care is gonna require between now and the end, nor do I. So buying a policy is not like buying a car or buying a refrigerator, and that's one of the problems I have with the buying mentality.

McCrery: I would disagree with that. I mean, when you buy a car you know that at least you are going to get a vehicle with wheels and some sort of engine that makes the car go and you can sit in it and ride. health care, we need to define, somehow, that basic package that you're gonna get at least. But, when you go buy a car you can get one with an 8-cylinder engine or a 4-cylinder engine. You can get one with air conditioning or not. You can get one with a CD player, same thing with health insurance. As long as you've got basic coverage, it's gonna take care of you if you get sick, if you need an operation for your heart or your gallbladder, it's gonna be taken care of. But, you may not want a private room. You may not want 24-hour nurse care. All of those bells and whistles are kind of like adding things to a car, you don't necessarily have to have those things, but you can get'em. But if you get them you ought to have to pay for them. You ought to know that.

McDermott: And the biggest, I think the biggest difficulty, well, one of the big difficulties will be us agreeing on a basic package, what's a basic car, what's a basic health-insurance plan.

McCrery: But having said that, though, I don't think it's impossible.

McDermott: No, it's not impossible. I just think what's been missing is a commitment that he and I are gonna sit down in here and lock the damn door and not come out until we have agreed on a package. That has not been done on Capitol Hill. And until that's done, he brings one out and says this is it, you buy it or nothing, that ain't gonna work. And if I bring one out and say this is it, you take it, he's not gonna buy it. So ultimately there has to be a coming to, a "come to Jesus" meeting someplace where that package is defined, this is health insurance for the country. This is what we're gonna give everybody.

McCrery: I think I mentioned to you in our initial interview that it's gonna take presidential leadership to make this happen. And I think I would like to...

McDermott: Not the kind of leadership, if I can interrupt, not the kind of leadership that Clinton gave, or Mrs. Clinton gave. Because they took it down there and tried to decide for themselves. They were gonna do the perfect package.

McCrery: But I have to give the Clintons credit. They at least came up with a plan. I didn't like their plan, but they came up with a plan, they promoted it, they tried to sell it and they fell short. But I give them credit for at least taking that on. Now, what I was gonna say is, I think I'd like to retract that statement that it's gonna take presidential leadership, or at least change it to say this would be much easier if we had presidential leadership. If the President would lock us in a room with his people and say, okay, let's come up with a plan that Jim McDermott, Jim McCrery, and President Bush can support. [LAUGHTER].

McDermott: Put that in the article.

McCrery: But I think it's having watched the Democratic primaries where health care was an issue and seeing the sparring between Gore and Bradley...

Miller: It's pretty dice and slice.

McCrery: It was and it amounted to nothing. Nothing came out of it except some bloody noses and I'm just afraid that we have reached a point in politics, even presidential politics, where it's gonna be very difficult if not impossible for any President to lead on this issue because it's so easily assailable from a political standpoint. Witness Gore bashing Bradley for coming up with a plan for universal health care.

McDermott: That coming from the White House where they came up with a plan for universal coverage. So it was kind of bizarre.

McCrery: I think maybe I've changed my attitude on that and I'm ready to throw in with McDermott and Stark and some folks on our side and let's come up with something and then sell it to the White House and say this is the answer. Probably we first have to get onboard some special-interest groups --hospital associations, AMA, some consumer groups–get them all in a room, let them buy into it. I think that's gonna be, possibly, that will happen as quickly as, depending on a President, whoever that President might be, for leadership on this issue.

Miller: Can I ask a couple of focused questions just to keep this ... this is very useful. I want to hear, if you can, Congressman McDermott, when people make the argument that there's not a defined benefit in the employer system now, what's your response to that -- why do we need a defined benefit if it's not in the system that's covering most people in the private sector?

McDermott: Jim said earlier that it's an archaic system that was created a long time ago, and if we're gonna go to a new system, then why leave in that problem. It's a problem in the system today between employers who cover this and don't cover that. So you have problems in the system as it now is because you don't have any uniform benefit package. Because you don't know, I got one perfect example of this which occurred to me when I was in the State Department. A man got out, a physician, a pediatric oncologist who knew all about cancer, was in the State Department, medical department. He retired and he went into the Washington, D.C., Blue Cross/Blue Shield. His wife got cancer of the uterus. And so they did a treatment and so forth, and ultimately she needed a bone marrow transplant. It was not covered by the Blue Cross/ Blue Shield of Washington, D.C. Now he was at that point practicing in Bellingham, Washington. And he knew all about the business, so he went and did the research and couldn't figure it out, and it turned out that all the programs they covered for this thing were for men, not for women, for the bone marrow transplant, the stem cell transplant. He had to pay for it out of his pocket. Then he found out that if he had moved from Washington, D.C. Blue Cross/ Blue Shield and gone to Alaska/Washington Blue Cross/Blue Shield, it would have been covered. So even in the same system you've got these kinds of problems. And that's the problem of the present system. When we design a new one, we ought to sit down and figure out how we don't create that. I mean, if anybody says the present system is perfect, we ought to stick with that, they haven't looked at that.

McCrery: Yeah, I agree with that.

Miller: Can we talk for a minute on how to deal with, if you did some kind of tax subsidy to move this way, how you'd deal with the problem of people who have predictably high medical costs and not forcing them to shoulder the full extra risk that they are these high-cost people. I'm phrasing it that way because that seems to me to be the inspiration for what everyone talks about -- is it going to be community rating, modified community rating -- but the issue is, am I stating it fairly, how do you protect people against the full risk of predictably high medical costs. You talk to Chip Kahn and he says, "community rating, that's a show stopper," let's have a risk pool over here, and don't tax us to fund that high-risk pool. We'll have some general tax that funds that risk pool. And then I talked to Pete Stark who says, look, I'm for redlining. You just draw me the line, Chip, and tell me, here's the healthy ones I want, here's the people I don't want to insure, let's just draw the line so the government can figure out what government should do now. What's the right way or what are the options for dealing with a problem that everyone recognizes. What are the ways to do it and what are the pros and cons and can it be compromised?

McCrery: You just outlined the ways, and the pros and cons are all over the place …

McDermott: The issue between us is really are we creating a social insurance system or not.

McCrery: Well, not necessarily. I disagree with Chip Kahn in that I think we can have community rating and not have a social insurance system in the way that most people would think of social insurance. Certainly it would be social insurance in terms of the risk, and I think that's okay.

McDermott: So that if they fell into this high-risk pool...

McCrery: I wouldn't have a high-risk pool, I'd just do community rating.

Miller: Did you know that?

McDermott: No, I didn't know that.

McCrery: Yeah. I'm one of maybe two Republicans who think that.

McDermott: I was gonna take a second look at you. [LAUGHTER]. You used to be a Democrat. I always had hope for you that you would come back to the fold [LAUGHTER] -- one of the backsliders.

Miller: What's brought you to community rating?

McCrery: I looked at it nine ways to Sunday and I don't think there's any other way to do it. I mean, that's not true, there is another way to do it, but I think the simplest way to do it is just to have community rating. Yes, you can have a high-risk pool with people moving from under the red line to above the red line -- why fool with all that? It's complicated, it's troublesome, it distorts the market. Why not just have community rating and then let insurance companies compete on the basis of value?

McDermott: Covering everybody.

McCrery: They'd have to take all comers, but they would compete on the basis of that service, economies of scale, efficiencies that they could muster to provide better prices, all those kinds of things. They could still be in the business, they'd just have to compete on those bases and not on getting lucky.

Miller: You mean full community rating?

McCrery: Uh, huh.

Miller: Not even age or...?

McCrery: If you go with my system of doing away with Medicare and Medicaid, putting everybody in the same market, it would be pure community rating.

Miller: You like that.

McDermott: Yeah.


McDermott: I don't want to say anything to mess it up. [LAUGHTER].

Miller: What do the insurers say to that ... they say it's a show stopper. Is there anything legitimate in their opposition to that?

McCrery: Depends on what you mean by legitimate. To them it's legitimate. Because, I mean, much of their business now...

McDermott: They don't have the problems that Jim and I face, which is equity in the society. They have a different mandate. I mean, a corporation takes in as much money as they can, pays as little out so that they have to give to their stockholders, and that's their legitimate form. It's not good or bad, it's just what they are. That's not what you and I are. He represents all 600,000 in his district, and I represent all 600,000 in my district. And I got to represent all 600,000. I can't say, well, I represent 440,000 and the other 160,000 are not my concern. I don't have that option.

McCrery: It would fundamentally alter the insurance business. It would change the nature of insurance, of health insurance.

McDermott: If we move away from that, see, we had community rating.

McCrery: Right, that was in the old days, everything used to be community rating.

Miller: When is this?

McCrery: Back in the late 40s, early 50s.

McDermott: Well, even later than that.

McCrery: Maybe through 1960 or so.

McDermott: Yeah, and then we moved away from it because the insurance companies got smarter. See when they started in '45 they had no data. They didn't even want to get into health insurance really but they got into it, and they were scared to death because they didn't know where the risks were. Well then they built up data and then they began to deal with it safe. There's risk over there and there isn't over here. So then they wanted to kind of segment out those risk problems.

Miller: Because they'd make more money.

McDermott: Right.

Miller: Now is there, do they have any argument that's legitimate in terms of, if you change the, if you make ... community rating makes it more like, what a, regulated utility sort of, it becomes more like that? Is there any way in which using that as the mode of insurance impacts the innovation in health service delivery that's gonna explode in the next 10 or 20 years that is a reason to cherish the competing private-delivery approach?

McDermott: As long as we put the kind of money we put into the National Institutes of Health, we are gonna continue to produce innovation in a variety of areas. And that will be fed into the system as it matures and becomes, you know, the question of what's experimental, that's another place where insurance companies fight stuff. That's experimental, we don't pay for it. Well, there ought to be some mechanism by which we decide that that one is now not experimental and it should be part of the basic plan. I mean that's my view. That's what that board would do, in my view, is that they would be looking at all this new stuff that comes on and say we'll pay for that, no, no, we're not paying for that. If somebody wants that, that's fine, but we're not paying for it.

Miller: Well, if you look at your caucus, where you're not, you wouldn't be typical of your caucus in terms of ...

McCrery: I think that's fair to say right now.

McDermott: I never thought about it. The more you think about it, you come to where Jim is, and I didn't realize he was there. I mean, I learned that here today, but it's hard, I mean, if you try and think of how, some other way to do it, it gets so complicated and so archaic trying to select out who to put into the high-risk pool, and at what point do you bump them out into the high-risk pool, that there'd be real bureaucracy, unbelievable.

Miller: Just as a matter of just practical politics, what's the reality of trying to discuss that? I mean, first it would take.

McCrery: Well, I may have to settle for less. I've talked with insurance companies about this community rating thing. They tell me that as long as they can underwrite based on age and gender, they have no problem, they can make it work.

Miller: You're making a face, though.

McCrery: Yeah, I am, because I don't understand how if they can do it on age and gender why they just couldn't do it on community rating. Because that's not a whole lot, just age and gender. I mean there is a big difference, sure, and I guess at the margin they could probably more closely figure their liability, their exposure and all that, but if we have a suitable risk adjustment mechanism, which is probably the second most difficult part of my plan, the benefit package being the most difficult and the risk adjustment

Miller: After the fact?

McCrery: Probably, that's the easiest way to do it. If we have a suitable risk adjustment mechanism, I don't see why they should worry. If they can, if they say it's okay to not allow any medical underwriting and let them underwrite only on age and gender, I don't see why they can't just move to the next step to pure community rating. But that's what they have told me in my meetings with them. They may have changed since Chip's gotten a hold of them.

Miller: Who's "they" by the way?

McCrery: Insurance companies. I've talked to a number of them.

Miller: Big players?

McCrery: Yeah, health-insurance companies. And they have told me in our meetings that as long as they can underwrite on age and gender, they could probably make it work.

Miller: Are these the Aetnas or United or Pacific Cares or smaller guys?

McCrery: Big guys.

Miller: But you don't want to say who they are?

McCrery: No, because I would never remember all of it. I've spoken with probably six to ten major health-insurance companies, and maybe one of those has said no, we just can't go with any kind of community rating, modified or whatever. Every other one has said, well, as long as we can underwrite based on age and gender, we can make it work.

Miller: This is obviously the key political piece of this, right? Wouldn't it be, to actually try and do that or make that happen? The insurance companies love you, though, right?

McDermott: I've never talked to six major insurance companies, because I want to be the one! [meaning single-payer] [LAUGHTER]. And they can see me coming.

Miller: Don't they see, I mean, they don't say you're making us a regulated utility and that's not

McCrery: Yeah, they do, they understand that. And that's my point: if they can get by with underwriting only on age and gender, they should be able to get by with no underwriting.

McDermott: See, the way you gotta look at this, I mean there's a fundamental question Jim is raising with them, which is utilities don't do too badly in this country. I mean, stocks in Florida's Southern Utility, or whatever, do just fine. And they're not making 100% profit every year, but they're good solid investments and they will retain that good solid investment. And they, nobody wants to give it up. They're not gonna ever come to the table and say, okay, we give up, you're right Jim, we're gonna go with ya. It's not gonna happen to them. It will be that we ultimately, because you can't solve the problem very well without ultimately saying, come up here and we're gonna make you a utility or utility-like.

McCrery: Yeah, and I would say that the health-insurance market that I envision would be more akin to the modern utilities industry that is not quite so regulated, not the old utilities industry that was very heavily regulated and protected. I'm not talking about that. I'm talking about the more modern utilities market where it's somewhat unregulated, more choices for consumers and yet there's still

Miller: Through the Web there's soon gonna, you know, it won't be long before you can do these really consumer everyone I talked to, the senior executives in the health industry, were talking about this consumer-centered model that's gonna be on

McCrery: Absolutely, which is gonna make it much easier to move to the kind of system I'm talking about, all the technological advancements.

McDermott: If the company's out there are health, this is Healtheon, is that the name of that?

Miller: WebMD.

McDermott: But one of the problems here with the Web, just to put in a cautionary note, is anybody can put information on the Web. So if you go on to find out what's the cure for the common cold, you can find everything from quacks to real good information. And that's one of the problems of using the Web is that there's no filter on it and the ordinary citizen isn't going to know whether they've gotten good information or not in it. That's one of, I mean, I

Miller: I don't want us to spend too much time on that, but you really could get to it, some kind of health marketplace where you can compete not on price, offering different bells and whistles that could be in front of a consumer. And that's not that far away necessarily. Can we talk about, again, if there are ways to do this. We've talked about the insurance

McDermott: Can I raise one issue?

Miller: Of course.

McDermott: Because I don't know where Jim is on this. One of my biggest concerns, and one of the reasons why I continue to hang in there and fight at this issue, I think the Human Genome Project is gonna have an impact on this whole process unlike anything we can really imagine at this point. Because if I'm an insurance company and I get a drop of your blood and I can do your genetics and I find you have these and these and these proclivities, I'll insure you for everything but those. What is insurance at that point?

McCrery: The game is over at that point.

McDermott: So one of the things that we're, we're actually designing a new buggy whip here trying to deal with a system that exists, but in fact, there is something just over the horizon, and I don't know if it's three years out or five years out or ten years out, that's gonna be so different than what we know today that sometimes I just throw up my hands and say, I don't know what to design that they won't be saying in ten years, who's the jerk who thought this up?

Miller: Well, I've heard, because I remember, I think you had mentioned to me in our first interview, that sometimes you'll tell people jokingly, I'm a patient man, just wait for that genome to come along because that's when I'm gonna get you.

McDermott: Well, I think if we don't get something in place that has a real potential, I think it might be

Miller: I asked Chip Kahn about this and Chip Kahn promised me the insurers wouldn't do this.


McDermott: No comment.

Miller: Chip Kahn also said it would be, I guess there was an argument that that would take it past a level that would be unethical, and also it would be a PR disaster.


Miller: But, are there any thoughts on how the genome progress plays into creating momentum one way or another for the kind of vision you're talking about?

McCrery: No, I think Jim makes an excellent point that once insurance companies have access to that kind of information, you know, policy makers will be working overtime to make sure that it's not

McDermott: That's not only the Internet. It's moving so fast we don't know what the heck to write because they're changing so rapidly we can't get a bill through the floor and get it through the conference committees before they've already got three generations down the road.

Miller: What's the, couldn't the fact that that's coming, shouldn't it be possible to have that create energy for the kind of system that puts everybody in one [risk] pool?

McCrery: I think that's one more...

McDermott: One of the problems is that we live in two-year terms. I mean, if we had 6-year terms or something or ten-year terms or something we're gonna have to live with it. But it's hard to get people to sit down and say the next two years we're gonna try and put something together because there's something coming and we got to deal with it. Because there will always be people who will say, you know, it ain't coming. That's not a problem. And then we will do something in a crisis-style when the crisis is here.

Miller: Can we talk for a minute now about, I don't want to get too much into the weeds, but if you do use something, some time we were talking about some variation of what you were talking about, some kind of tax subsidy, a question about what the benefit thing is, community rating, at least in this room, regional variation in health costs, big issue. What's the way to try to deal with that? Can I toss out options I've heard just to get a reaction? One is, vary the tax subsidy by region. I know there are pros and cons to all this. But vary the tax subsidy by region; make it a lower federal tax subsidy, but cash out state programs that exist that sort of honor the current disparities and the states top off the federal tax credit in a way that honors the regional differences, you know, all of this seems to be, when you come up with it, is it's making explicit the subsidies and the variations in a way that politically have never been done before, and it gets very hard and it's a big issue with Medicare and blah, blah, blah, but typically a senior in LA doesn't know he's getting prescription drugs and eyeglasses because the guy in Minneapolis isn't.

McDermott: In Seattle I would be glad to make it explicit, to try to make it explicit.

Miller: What's your take on, is there a way to, apart from saying we gotta lock everyone in a room and try and hammer something out, any thoughts on what the likeliest ways are to...?

McDermott: They say that a camel is a horse designed by committee -- we will ultimately wind up with some kind of camel on that issue. We are having a terrible time in Oregon, Washington, and Minnesota living with the AAPCC rate [through which Medicare reimburses Medicare HMOs]. And that's just the tip of the iceberg that you're talking about. And I don't know how you'll get another bill through on this issue where you don't deal with those regional disputes or the disparities.

McCrery: We're making, as you know, we're making efforts now to reduce that disparity.

Miller: On Medicare.

McCrery: On Medicare, and it's very difficult, politically. But we are making progress. So I would just say that that is an issue that we would have to deal with in some fashion if we were to construct a new health care, health-insurance marketplace. We would have to deal with that issue, and I don't know how.

Miller: Is it fair to state that the long run policy objective of the way you deal with it is to be able to use, is to use all this data that's becoming available on the way health care is actually delivered? I hear people talk about the new frontier of "medical management" reducing all the outliers and the variances in utilization among physicians and doctors and get toward some kind of best practices nationally that hopefully deliver care more cost-effectively over time. Is that a ?

McDermott: One of the issues that will come into that is the bill by Tom Campbell [of California] which comes to the doctors, rights to negotiate. The whole business of whether or not they can form a union or form an association that negotiates prices. That whole price-fixing question will be, that's gonna come out into that whole issue because the doctors are gonna feel squeezed. I mean, in one place they're making a lot and in other places they're not. Well, if you start squeezing the top, these guys are gonna say, hey, we better organize or you got to get our power back. So there's gonna, it is a very tough political issue.

Miller: Talking now about the employers, role in the system. Because under what we're talking about there would be some shift over time away from employer-based, right? I've never understood, when I do the reporting on this, why employers wouldn't want that.

McCrery: I think they do, I think.

McDermott: You think so?

McCrery: Uh-huh.

Miller: Most do what?

McCrery: Most would want to get that off their backs, particularly small employers would like to get that, that duty almost to provide health insurance to their employees. I think most employers would like to get rid of that and just pay their employees wages and retirement benefits and you know, stuff like that. I think they'd like to get rid of the health-care burden, and some big companies would, too. I've talked to a number of big employers and they're very, many of them are very interested in converting to an individual-based system.

McDermott: Why do you think they didn't support or try to support or figure some way to support the Clinton proposal, which would have sort of moved in that direction?

McCrery: I don't know that the Clinton plan necessarily moved in that direction. And I think the employer community just kind of stood back in that whole fight because they were not targeted, so I didn't learn anything about the employer community from the Clinton-plan fight.

McDermott: My impression is different than Jim's on this issue because I have a feeling that it's almost a religious issue of not of being unwilling to concede that the government will take care of it because they figure that ultimately they'll be the ones that pay for it. So they don't like the idea, although they'd get rid of their personnel department and they'd get rid of all the hassle of dealing with the benefit package and all the stuff inside the company, they don't want to give it up to the government or to somebody else because they'll then be taxed for it and the tax will go up. They'll spend more than they're actually spending now fighting

McCrery: Well, I think that's a legitimate fear on the part of employers, but if we construct a package which can allay those fears, I think they'll be fine, and I think we can construct a reform package that would allay those fears. So I think Jim is right that's probably in the back of the minds of employers, but that's not the kind of solution that I envision. I don't envision putting the burden of financing this on the backs of employers.

McDermott: When I was doing single-payer, the problem I had was trying to figure out how I can take the burden off the ones who are providing health insurance, what I couldn't figure out was how I explained that I was adding some taxes on those people who were not providing now. And I see the employer community as two distinct groups -- those who provide and those who don't. And the those who don't are the ones that are the really sticking ones to deal with. Most of them tend to be smaller and in ways that it's a real dilemma how to deal with that, to say to them, we're gonna actually put a plan out there and you're gonna have to ante up X amount.

McCrery: I don't agree with, I don't think we have to do that. Under my plan...

McDermott: That's one of my weak...

McCrery: I would make all employers cash out their employees. Any employer who's currently providing, or as of certain days, providing health insurance, would have to cash out their employees.

McDermott: By that you mean give them the amount of cash that they are presently, in wages.

McCrery: That they're presently spending on their health insurance.

McDermott: Tax on the wages.

McCrery: Yes.

Miller: And equal amounts for employees of some kind which links to community rating in some way, right?

McDermott: That would be per employee.

McCrery: That would be a per capita cash out. So that would be another reason to go to community rating.

Miller: Or else you'd have a problem.

McCrery: Yeah, you'd have a big problem. And then the, as far as employers who don't provide health insurance, they still wouldn't, they wouldn't have to cash out anything but they'd be at a disadvantage in the marketplace because this employer over here who cashes out is going to be paying his employees a higher wage than this employer over here who didn't have to cash out. So I don't want to mess with that marketplace. I still think that the market works in terms of employers attracting quality employees.

McDermott: Where does the money come from for the employee who works for the company that's not providing health insurance? I'm working for a...

McCrery: I assumed you were saving this for last and we're ready to go into the financing.

Miller: I'm just writing down financing.

McCrery: This is where Jim's gonna jump off my train.

McDermott: I don't know that you should make any assumptions about where I'm gonna jump.

McCrery: I hope I'm wrong.

McDermott: But go ahead and explain to me how you deal with the guy who works for a company, 50 people in the company, they don't offer them anything...because in Seattle it isn't just 50 people, you can't let people that you, say there's some cut because some of these start-up companies, in order to get somebody they have to give them benefit packages that are out of this world. But if they are in an industry where people are cutting and pasting or slapping hamburgers, they can get away with it.

McCrery: So how do you do it?

McDermott: Yeah.

McCrery: Well, bear in mind that right now that employee of that company who's not providing health insurance is not getting anything, literally, nothing. If he goes out in the individual market and buys his own policy, he's getting no help from the government, nothing, no subsidy whatsoever. He doesn't even get a deduction for the premiums for his health insurance. The only way he gets any benefit at all is if his total medical expenses exceed 7.5% of his gross income and not many people quality for that. So this poor guy is really out of luck. Whereas Jim McDermott's getting subsidized. The taxpayers are subsidizing Jim McDermott's health care and it's his health insurance, and mine [LAUGHTER]. There is no equity in that. That is a terrible way to construct a system. So I want to...

McDermott: I want to hear about equity.

McCrery: I want to dismantle the current system in terms of government subsidies and I want to throw it all back in a big ole' pot, and I'm talking about Medicare, I'm talking about Medicaid. States would have to have a continuation of effort in terms of their contribution to health care through the Medicaid system. Take back all those tax subsidies from employers. Put all this money back in the pot and then create an equitable system. And what I mean by an equitable system is we basically help those people who need help -- low income people -- everybody else pretty much fends for themselves, mostly Jim and I, we make enough money to buy ourselves a decent health insurance policy. I don't need the government to help me pay for my health insurance, that's crazy.

Miller: So it would be some kind of sliding scale?

McCrery: Yes. Wouldn't be a cliff, it'd be a slope.

Miller: But that would mean changing the current tax subsidy?

McCrery: Absolutely.

Miller: Sir?

McDermott: Well, I'm willing to look at his plan with the specifics on paper. I can't reject it absolutely out of hand because the present system is not perfect, is not doing the job. So I am perfectly willing to look at another alternative. I just want to see the specifics and see. Because I've had the experience in the State of Washington of starting something called the Washington Basic Health Plan where we provided a basic health plan to the people, and we put it on a sliding fee scale up to 150% of poverty, I've forgotten the specifics now, but we had this plan and we had so many people coming forward but we didn't have enough commitment from the state legislature to pay the subsidy. And that's where you come into the, where we came into a problem. So we had a waiting list of 70-80,000 people; we had 110,000 on our rollback.

McCrery: You didn't recoup any money. You didn't have a pot out there to pull from.

McDermott: And that's the problem. At the state legislature, you can only experiment so much because you don't have all the leverage.

McCrery: New dollars. You got to come up with new dollars. But we don't have to come up with new dollars. We got present dollars out there that we're spending willy-nilly in a very inequitable fashion, in my view, that we can recoup and redistribute.

McDermott: I would not reject his idea.

McCrery: That's good to know. The reason I assume that he would is because labor unions generally are very much opposed to this idea.

McDermott: Because they're fearful. They're like business on the other side. Their fear is the other side of the business.

Miller: Can you articulate?

McDermott: Well, the business is afraid the taxes are gonna go up, and the labor unions are afraid that the benefits are gonna go down. That somehow the workers are gonna be worse off.

Miller: And they've negotiated these plans now offered.

McDermott: Yeah. This is what they've offered to their members. We got those benefits for you. And so now the government's gonna take them all away and how are they gonna go to their members and say they stood for that? That's where the dilemma is.

McCrery: I'm glad to hear Jim describe it that way. His initial comment was, yeah because they're fearful. And I think if we educate them, their members, the union members, as to the advantages of an individual-based system wherein they are cashed out in the form of wages, they won't be so fearful. They might even like it. The union bosses will not like it because we are essentially taking away one of the goodies that they can claim to have provided to their members. It's a reason for being a union member. We're taking one of those reasons away. But the union members themselves, once you explain to them, look, you're gonna get $10,000 more in wages. Now, you'll have to pay taxes on those wages and that's the big difference. You're not having to pay taxes on your benefits, but you would have to pay tax on those wages, but then under the market that we foresee, you can go out and buy a pretty darn good health-insurance package for $5,000, and you got $5,000 left over to buy your or whatever you want. I think they might say, whoa, maybe there's something to this.

Miller: Is there any way you can see, because I've heard the labor objection everywhere when talking about this, what would it take politically, some people suggested to me that if it was part of a deal that really looked like it was gonna assure universal or near universal as the long sought labor goal, they might accept some reallocation of recurrent tax exclusion. Is that pie in the sky or is there any way they can, they would be open to this?

McDermott: As Jim said, we save the last thing, the toughest thing -- financing -- and I

McCrery: That's three things.

McDermott: Three?

McCrery: Benefit package, risk adjustment, and financing.

McDermott: Okay. Well this is

Miller: I was saving financing for last.

McDermott: This is like far and away, it's by far and away the toughest the other

Miller: I used to work at OMB, you know

McDermott: They had a benefit package, you could come up with that in a half hour.

Miller: Right.

McDermott: If you locked the door and said we don't get any lunch until we come up with, we would have one and be out of here. But the financing question is fraught with the problem of, just the human emotional problem of, I have this now, if I let go of it, why should I trust a politician? Why should I trust Jim McCrery and Jim McDermott that they're gonna give me something as good as what I got right now. And that was a big part of the, I mean, creating that uncertainty was a big part of the Harry and Louise ads, and the whole undercutting of the Clinton plan was I got this, now if I give it up what am I gonna have left. What's Mrs. Clinton gonna give me back. All you had to do is go on, do you really believe that she's gonna give you the same. That's a standard political technique is to create disbelief or uncertainty about something and the thing is gone in a minute.

McCrery: It's a lot easier to beat something than it is to pass something.

McDermott: Oh yes, that's absolutely right. And that's why I say, Jim, put the plan on the table and I'll look at it. I'm not gonna prejudge it and say no, there's no way this could work. I know how tough it is, you're gonna go out to all the employees in the country who have their insurance and say we're gonna take away your tax deduction

Miller: And yet, just to make it clear when I explain this, ordinarily if the distributional impact of the tax exclusion now is the kind of thing that you and Ted Kennedy, if it were being proposed anew, you'd say why are you gonna give more to [the rich], you got all this money

McDermott: Right, right, of course. That's why I say, that's why I can't reject what he's talking about. Because I know the present system is not fair.

Miller: But how to get from...

McDermott: How to get from here to there.

Miller: What would it take? I mean, practically, they'd be able to address things like, it's like you have to create...

McCrery: It would take, first of all, some political courage, and second, it would take a hell of a lot of selling.

Miller: And how do you create a demagoguery-free zone?

McDermott: I think we'd probably, I mean I occasionally in my darkest moments think it's gonna take some kind of crisis, real crisis. I mean, I see hospitals failing around the country because we made some little minor adjustments in Medicare.

McCrery: And that's what we're gonna keep doing.

McDermott: Yeah, and they made them. And I stood back and said you guys don't know what you're doing, you're gonna have problems. And every year they've been adding stuff back.

McCrery: We're always gonna have problems, we're always gonna patch the problem. You know, a little patch here, a patch there. And every time we do that it's gonna create an unintended consequence over here and then we'll patch that, and we'll continue this crazy quilt approach until the whole thing just caves in probably from the cost standpoint and we will end up with government just controlling everything because that'll be the easiest solution.

McDermott: The evidence I see that they were getting close...

McCrery: And by the way, that's how I'm gonna sell this package to Republicans. I'm gonna bring in the fear factor. If you don't do something dramatic like what I'm proposing, you're gonna end up with a single-payer system run by the government.

Miller: And I hear, when I would talk to some other Democrats -- Jay Rockefeller, Pete Stark -- I would hear them almost saying, wait 'til the recession comes, we hit 70 million uninsured, and that's when we'll make our move. And so it does seem like there's some of that sensibility out there. We've got ten minutes left. Just talking about the politics again, to have this kind of, when was the last time, first of all, either of you had a conversation like this with your counterpart on the other side?

McCrery: Jim and I have never had this conversation. Pete and I have had a couple of brief conversations over dinner and wine.

Miller: But is this not happening, is it fair to say this kind of thing doesn't happen that much?

McDermott: The issue became radioactive in 1994. Democrats tried, it was killed...

McCrery: In 1994.

McDermott: '94, yeah.

McCrery: The Clinton plan.

McDermott: Yeah, the Clinton plan went down in '94. And since that point there's been no serious -- and I said to the President many times in the last six years, you should go back to the Republicans and say you didn't like my plan, what's your plan? And he should have stuck his finger in their chests and forced them to put something on the table. But he let it slide and as Jim says, it's very hard for us, even if he and I agreed on something and we went out on the floor and said we have found the Magna Carta of health care, we want everybody to come under the tree here and sign. They would laugh us off the floor.

McCrery: It wouldn't take a big tree. [LAUGHTER].

Miller: What would it take for a serious

McDermott: I hear you back away from saying that it's gonna take presidential leadership. I think the problem's gonna be so big that it doesn't make any difference if it's Bush or it's Gore. The issue is gonna be there. And I tell you why I say that. When I see Xerox let this trial balloon go and say that they're gonna give up, they're just gonna give their folks money and let them go buy their own insurance, I thought, whoa! They got it shot out of the air before they hardly got, you know, two days down the road.

Miller: They wouldn't even talk to me about it.

McDermott: But that's, obviously what's being thought about in the companies, in the departments. Let's just get this off the payroll...

McCrery: DLC [the Democratic Leadership Council] has recently come out with...

McDermott: What do you know about them? [LAUGHTER].

McCrery: Not much, but I'm familiar with their organization. All I've seen is an article in some publication (I can't remember what the publication was), it was a one-page column on this DLC proposal and it sounded very familiar. And I gave a speech to the AMA in San Diego, you were there. The DLC guy was on the next panel. He was sitting in the audience listening to us. They've stolen my proposal, basically. So there are some other people thinking along these lines of an individual-based system, taking on the workplace. I don't remember if they used community rating. I need to call on them and make sure they got all my plan right.

McDermott: You don't want them to have it half right.

Miller: And to be clear, that route, to do that your caucus would have to vote to accept universal as the goal that should be sought, also to accept that it's gonna take a fair amount of resources through tax expenditure, however you want to reallocate. Reallocation is the way you prefer to do it, to reallocate the current

McCrery: Yeah, it might take some new dollars but not nearly as much as putting a new system on top of the current system.

Miller: the tax thing, which is a big question.

McDermott: Well, one of his problems, as I look at it

Miller: And you have to accept that there'll be a private insurance industry.

McDermott: Yeah. Well, I always thought, even in my single-payer system they would handle the system some way or other, to administer in a way You're not gonna wipe it out.

Miller: But that's much less than even the mandated, regulated utility.

McDermott: Yes, it's much less than the utility mode. But part of his problem is what I see on his side is this whole wanting to back away from entitlements. We've had this whole entitlement business and if he starts saying that everybody's entitled to insurance or gets anywhere close to that, people are gonna say, Jim, you're right on the edge of a slippery slope and you're gonna be in an entitlement before you know it. So a lot of them will be afraid to go even to the edge. I mean, he's on the edge of saying entitlement. He's not saying it. He's saying some individual will make available the possibility for any individual to buy it.

McCrery: It would be an entitlement to low-income people, that is correct. But today we have an entitlement to everybody in the country through the tax system. And it's an entitlement to people that don't need the entitlement.

McDermott: He's gonna have to educate people because they don't think they got an entitlement. People at our level do not think they have an entitlement. Entitlement is what you give to poor people who don't deserve it. Here there's clearly an entitlement that we all have because of the tax structure.

Miller: So what would it take for there to be progress on this after the election? Is there a lineup that's better or worse? There are times I've heard the argument sometimes that only a Republican could sell some of this stuff to the corporate community, or that Bush is gonna put out some version of the tax credit thing at some point, which will ironically be smaller than the big plan his father put out in '92 when there were $300 billion deficits, because he's used up everything on his tax cut already. So he's gonna put out a smaller plan than Daddy did, now that we're in an era of surplus, which shows you where we are. But do you have any feel for, if it's Gore and a Democratic House or Bush and a Republican or Democratic house? Is there any mode of this that's better or worse for progress on this?

McDermott: Unfortunately again, you're gonna have personalities there.

Miller: You mean the key committee people.

McDermott: Yeah, and that's I think why it's hard to say what's a better combination. It's clear it's gonna take a bipartisan effort, absolutely bipartisan effort. It can't be done one side or the other. And it's gonna take patience and a certain putting down of ideology to get to a pragmatic solution here.

Miller: Is it doable in your view?

McDermott: I wouldn't be here if I didn't think it was. I mean, I came back to Congress. I had quit politics and I came back in '88 because I thought we were getting near a crisis, and I wanted to get on the Ways & Means Committee. I got on in '90 and by God, '92 we got a president who raised the issue, and you know, so I was right in my judgment. And I still, I mean, the more I'm around, I know that there's a core of people who when they quietly think about this, aren't very [partisan], I mean it's not impossible to find a place [to come together]. Now, it may be that it has to go one way or the other. I mean, but when, the whole idea of passing an individual mandate, I mean, that idea gets thrown out there, and I just laugh. You got an individual mandate on auto insurance. But we got uninsured drivers all over the damn place who buy insurance for a week and get, you know, I can use the IRS for enforcement. I mean, you get into all kinds of archaic stuff if you're gonna try and have an individual mandate. Or are you gonna go all the other way? That's why there's gonna be some solution in the middle.

Miller: Just on the mandate thing, if you make the subsidy sufficient enough, right, then so if you get to 96 or 97% and there's a few outliers there, we're still better off than we are now.

McDermott: I think, are the outliers at the top or the bottom?

Miller: I don't know.

McDermott: Oh, okay. I don't care about people above 96 or 97%.

Miller: There might be young people who just want to spend the money on something else, I don't know.

McDermott: They might think they have a responsibility to pay it in this deal.

Miller: Any sort of closing political

McCrery: There's no question an individual mandate is not perfect, but it's much better than we have now in terms of getting everybody to contribute to the system. And it's much preferable in my view, and I would say in the Republican view, to a single-payer system financed through the tax system, to the general tax. And even that's not perfect because you got tax cheaters too. So no system is perfect. But an individual mandate puts the responsibility on the individual, which Republicans like, and so I think it's, to answer your question, I think if you had a Republican majority with a Republican President, it would be easier to construct with Democrat help a program that could be sold to the public than if you had Al Gore, Democrat Congress, I just think the tendency there is gonna be to move toward single-payer and I just don't think you can sell single-payer yet. I don't think.

McDermott: And my answer would be that the the question he constructs is, the question is how far would they move and how much would they put on the individual, and how much would be handled by some kind of social insurance aspect to it? I mean, that's, if you go all the way, if you do those things, boy, you've come a long way.

McCrery: Pretty socialist.

McDermott: But I don't know that there's a presidential candidate out there, nor do I think there's any leadership in the House and Senate out there that believes what Jim does. If they did, we would be a long way down the road here.

McCrery: Well, but it may be up to the Pete Starks, Jim McDermotts, Jim McCrerys, Bill Thomases and two or three others that we could recruit, to create a plan that is workable, makes sense from a substantive standpoint, and then we sell that to the stake-holders in the system -- the AMA, the AHA, maybe some insurance companies, consumer groups -- and create some momentum for that kind of solution. We may have to do that below the leadership level and below the presidential level to create some momentum for this, I don't know.

Miller: How do you create, this is the last question, how do you create sort of a, is there any way to create a demagoguery-free zone? Because it's so easy for either side to, like when you say it might be, if it was a whole Republican alignment, it seems then you might, it would be so easy for the Democrats to say politically we just got to nail whatever they're doing because we don't want to do a deal with them. How do you, is that the role of the President? Is there any way to create a demagoguery-free zone on this for a while, or no?

McDermott: Politics is politics. I mean, he and I could speak to the AMA on the platform and walk off and be friends still at the end and go have a drink together, but there are people that could not go on the platform with me, nor could I go on the platform with some people without, and I'm sure Jim could get under the skin ofbecause you gotta have, you gotta have the view that the only way it's gonna be done is between the two of us. You don't have that view. You think you can do it yourself, you are so far out you're off the ramp.

Miller: Or that we could do it our way better two years hence if we do this now and win more seats.

McDermott: That's what happened to the Nixon plan. There are guys around here who helped scuttle it.

Miller: Probably sorry about it.

McDermott: Well they, if you can get them in a quiet moment someplace they'll tell you, you know.

Miller: There are senior people in the Clinton White House who think they could have 15-20 million more people insured today if they cut their deal in '94.

McDermott: And so the only way you create that climate is there's gotta be a serious belief that we have to solve this problem. The Ways & Means Committee I was just reading a story, I was reading Rostenkowski's biography. They're talking about when Wilbur Mills was chairman of this committee. Everything on this committee was done by consensus. Wilbur Mills never rolled something out; he let the consensus develop and then he would say, hah, this is the answer. And everybody, of course, had already agreed to that and that was the way it went. They went to the floor and they didn't have amendments, boom, gone out of the House. Now, if that kind of consensus could develop among ten people maybe, maybe ten people, so getting more than ten is gonna be tough to agree on some package. But a real consensus put together that way would be, would have a chance to do it.

McCrery: Another problem that we have is that we're all so busy. There are so many things for us to do, we're on the Ways & Means Committee. We've got so many things going from tray to tax to Social Security, welfare, child care, you name it, we play with it and it takes a lot of time if we want to do a good job. Then we got our politics back home that we have to take care of. And we got our families, you know. It's hard to carve out enough time to tackle something as big as this. Now, the administration has a lot more resources. They can put people in a room and say, here, this is your project, work on it. Jim and I don't have that luxury to just lock ourselves up for three months.

McDermott: Now you got

McCrery: I'm missing a meeting right now to talk about prescription drugs.

McDermott: And that's the problem, everybody's on the back of a galloping horse. The Wilbur Mills example I gave, that was in an era when We're not gonna sit around on the weekend because he's gonna be out of here tomorrow. At 4:00 he's gonna be jumping on a plane for Baton Rouge, and I'm gonna be on the way to Shreveport, whatever, I don't know where [LAUGHTER].

Miller: Louisiana.

McDermott: That's why it's harder in this Congress to do this kind of thing than it was in 1965.

Miller: So I'll tell readers everyone's just too damn busy to insure those 45 million people. I'm teasing.

McDermott: I hope you're teasing. That's not what I believe, because I think

Miller: I was teasing.

McDermott: that it is. . .

McCrery: I've been working on this plan for two years with Bill Thomas and our staffs. It's not in writing anywhere. You know, we tried to reduce it to writing at some point to get it scored and try to find out, but that was just a piece of the plan, and of course, Bill Thomas is into 99 other things, so it's hard to get him pinned down to actually put the finishing touches on and put it on paper. But it just gives you some idea of the difficulty in polishing a product in this environment, it's just time consuming and we don't have a lot of time. But, I'm to the point where I am wanting to try to bring in some Democrats who want to solve the problem and want to provide universal access and try to polish a plan and then see who we can sell it to. Just go knock on doors.

McDermott: One of the problems is, of course, is they're in the majority, so if he doesn't initiate it, if I initiate it, it's got very little chance of going anywhere. If he initiates it, there's a chance, right. If it switches and we're in charge, then one of us has to initiate and bring the republicans in and the trust question, does he trust me, will I trust him, that's the real question, because why should I waste my time going to a meeting at McCrery's office if he's just gonna play the same old goddamn game and jerk me around. I mean, why, I mean, we got so little time, you got to decide you're only going to go to a place where you trust the guy. And that's, I mean, that's crucial to making this happen. And unfortunately, in the last number of years, oh, do I trust you?

McCrery: Yeah. Would you come to this? [LAUGHTER]. Would you meet with me for a couple of weeks and just talk through, talk this around?

McDermott: We wouldn't be having this interview if I didn't trust you. [LAUGHTER]. Yes, I trust him. I mean, you can't underestimate, because this is a people business. It's not just ideas and it's not just numbers, it's the people gotta be able to work together. And there's been a hell of a lot of things that have separated us.

Miller: I think that's probably all we need. Gentlemen, thank you.

McDermott: You know more than we know.

Miller: Thank you very much.

McDermott: We each have to go to a meeting to our respective caucuses and plan how to beat the crap out of each other. [LAUGHTER]

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