Contact: White House, Office of the Press Secretary, 202-456-2580

KANSAS CITY, Mo., Jan. 25 /Standard Newswire/ -- The following text is of remarks by President Bush in a roundtable discussion on health care initiatives:

Saint Luke's East -- Lee's Summit

Lee's Summit, Missouri

12:08 P.M. CST

If everything goes well and we fall within the statistics of Missouri, the 20 percent range, we will end up "saving" $3,300.  I say the word "saving" in quotes because we raised our deductible.  We are now, as a company, taking a risk, which is what I thought insurance was supposed to do for us.  But now as a company, we're taking a calculated risk that only 20 percent of our employees will hit us up for that extra money.  If something goes wrong and they all hit us up for it, we're going to lose an additional $4,400.

So when they say, well, we can keep your premiums the same, they're not really saving us anything, because we're having to pass that along to the employees, of which I am an employee of the corporation.  So now my health insurance costs just went up, too.  And it's just a vicious cycle that we've been dealing with for several years.

THE PRESIDENT:  This is probably the biggest problem we hear from small businesses around the country.  And in that small businesses create most new jobs in America, it makes sense to come up with plans to help small businesses thrive. 

Mike, I don't know if you want to comment on this --

SECRETARY LEAVITT:  I'd be --

THE PRESIDENT:  -- deductibility plan because I think it's going to save your employees a lot of money and make it easier for you to be in a position to do what you want to do, which is be -- to see yourself a good employer.

MR. HENDERSON:  Well, that's the hard thing, is when you're trying to hire more people, health insurance is really important.  And if you're telling people, well, we've got a $2,000 deductible and a 70/30 split, but, hey, we're a good company to work for, well, you might be a nice family company to work for, but I can't afford to work here.

THE PRESIDENT:  Have you looked at this deal that I proposed?

MR. HENDERSON:  Yes, sir, I have.  And from what I've looked at, off of the information you've sent to me, I think that it's going to be very attractive.

THE PRESIDENT:  And how does it help you?

SECRETARY LEAVITT:  Jim could describe it, or I -- well, Jim is like a lot of other small businesses.  If he and his employees had this ability to have this standard exemption -- in Jim's case, personally, he'd have the exemption, he'd get the tax savings.  It would be -- he could have about a $2,183 increase in his take-home pay.  The value of the actual deduction, then, would be $7,200, which would go a long ways to helping defer some of those costs.

When you look at that example -- and take Martha, for example.  Martha had a similar problem as Jim did, and chose to go to a health savings account.  When you combine these two, it becomes well within the grasp of almost any employee to have an affordable, basic health insurance.  Martha, maybe you could --

THE PRESIDENT:  Just one point before you go.  I think it's very important for our citizens to know that as we level the playing field between employees of little companies and big companies, it makes it easier for small companies to stay in business.  The tax code, it treats a certain group of people in the United States unfairly when it comes to health care.  People who work for big businesses get their health care on a -- with no -- they pay no taxable income on it.  Small companies who are having trouble staying in business because of the nature of their size or the company pass on the increased cost to their employees, and we've got to level the playing field, from a taxes perspective.  It is by far the most hopeful and fair option of any medical health care option out there today, unless, of course, you want the federal government providing it all, saying, okay, we'll provide you insurance, but we'll provide everybody insurance, which would be a mistake.

Anyway, listen to health savings accounts, but I don't want to be Mr. Lecturer.  But she is -- it's an interesting option for you.

MR. HENDERSON:  I did look at those, but for our employees, they weren't as attractive, because our employees said, if I can set aside $2,000 a year or whatever to put into a health savings account, I'd be doing it anyway.

SECRETARY LEAVITT:  So they'll be able to -- with this tax change they'll now have the money that can go to do just that.

MR. HENDERSON:  That's been what's so frustrating about this, is each year those costs go up, we want to make it affordable for our employees, the companies pay more for the insurance that they're receiving.  We don't get to turn around and say to our customers, hey, we're raising your prices 25 percent because our insurance went up.  And when we ask the insurance, why is it going up, we haven't had these major losses, their reply is, because we can.  That's what I was told, because we can.  I'd like to tell all my customers that -- hey, I'm raising your prices 25 percent because I can.

THE PRESIDENT:  That's a problem, and the reason I've come here to discuss this with a frustrated small business owner like you is because we believe that we've designed a solution that will help a lot.

Martha.  Why don't you tell everybody what you do?  Are you as passionate about your employees as my man Jim?

MS. GELENCHER:  Yes, I am.

THE PRESIDENT:  That's good.

MS. GELENCHER:  I've been in the business for 30-plus years, and having health insurance has always been a big issue.  I think we as employees -- individuals are now facing what Jim said is -- the individual and the employer are facing the same problem right now. 

THE PRESIDENT:  Let me ask you something.  How many employees do you have?

MS. GELENCHER:  Thirty, of which six are full-time.

THE PRESIDENT:  So you started getting squeezed. 

MS. GELENCHER:  Yes, from the very beginning.  In fact, no one -- for many years, no one wanted to insure someone that had only 30 employees.

THE PRESIDENT:  Yes, or six full-timers. 

MS. GELENCHER:  Yes.  It's like, well, you're just not --

THE PRESIDENT:  It's one reason why you don't have a lot of leverage. 

MS. GELENCHER:  Right.

THE PRESIDENT:  People don't want to insure you. 

MR. HENDERSON:  If we drop below five, we've been told --

THE PRESIDENT:  Yes.  So you're at six full-time, 24 part-time.  And you start looking at options, and what happens?

MS. GELENCHER:  Well, we went with the HSAs; we've been with them for two-and-a-half years.  We were able to give more full-time people insurance.  We save 40 percent of what we had been paying.

THE PRESIDENT:  Yes, see, that's why I think -- get somebody to -- HSAs really do hold the cost down for small businesses.

MS. GELENCHER:  They really do.  They really do.

THE PRESIDENT:  A little difficult to get the employee to sign on at first, right?  It's a novel concept, as opposed to somebody paying your bills.  An HSA basically says you're in charge of your own health care. 

MS. GELENCHER:  Right, and it gives the small business person a little advantage over the larger business person, because they have their own savings account --

THE PRESIDENT:  That's right.

MS. GELENCHER:  -- and they can -- it grows and it's theirs and they become more responsible for how they spend their health care.

THE PRESIDENT:  A high deductible catastrophic care plan with the company and/or the individual contributing tax-free the amount of the deductible into a savings account.  The person owns their savings account.  In other words, it's beneficial to small business because it's cheaper to buy the HSA than it is normal insurance that you're battling for.  Have you found that to be true?

MS. GELENCHER:  Yes.  And our employees are very pleased.  And I mean, really it was a life-saver for us because it just became such a big problem as we see all across-the-board now with individuals -- low income, middle income -- most of our people are middle income, so that's to their advantage. 

THE PRESIDENT:  See, the problem with small businesses and individuals is that there's no market relative to -- like big companies.  There just isn't.  We need to help establish a market.  Demand will yield the supply of insurance policies, so long as states enable there to be the development of a basic plan, without mandates and things added on to it.  And that's really one of the benefits of the HSAs, by the way.  It's like a basic health care plan.

Let me ask you something.  Do your employees like the idea of being able to -- of course they like the idea -- your employees are able to take their health care with them from job to job -- take the savings account aspect.

MS. GELENCHER:  Exactly.

THE PRESIDENT:  It's theirs, not yours.

MS. GELENCHER:  Right.

SECRETARY LEAVITT:  May I ask Martha a question?

THE PRESIDENT:  Sure.

SECRETARY LEAVITT:  Martha, I have an HSA, so I have some experience with this, but I'm curious as to your experience with them.  Did it -- did it cause you to be more interested in what things were costing than when you just the insurance card? 

MS. GLENCHER: Exactly. 

SECRETARY LEAVITT:  I remember the first time I walked into a drug store with my HSA and presented them with my new card.  And I knew I was -- that my savings -- my health savings account would be paying part of it.  And they -- this prescription I had was going to be $379.  And I'd been getting this prescription for quite awhile, and I had no idea what it was going to cost.  And I said to the druggist, is there a generic version of this?  It was -- it changed my way of thinking about this completely.  Did you have that experience?

MS. GELENCHER:  Exactly the same.

SECRETARY LEAVITT:  Have you seen any kind of change in the way your employees have thought about this as a result?

MS. GELENCHER:  Well, in a middle income, you don't have people that take for granted their insurance or -- people that have their own business, they're not out there looking for someone to hand them something.  They're willing to work to get to the place where they can afford health insurance.  It's a privilege. 

I think people think -- everyone expects that it's something that should be there, and where's the money going to come from?  They all just think that it's all there.  But the federal government, that's not their responsibility.  And I feel like it's our responsibility to do our part.  Each one does their own part, it will help to carry the load -- you just can't expect the federal government or the state.  Each one has to do their own part, I believe, and this helps each one do their own part and feel responsible and carry the load.

SECRETARY LEAVITT:  Something that Rich said and that Martha said that was important, one of the things they are doing here at St. Luke's is that they are allowing people to know what the prices are in advance.  A lot of people go to hospitals and they say, I'd like to know how much this costs.  And the hospital just isn't equipped to answer that question, or the doctor just doesn't think about what the cost is because usually it's just about processing the insurance. 

This very -- this gets at the heart of how we keep costs down.  Suddenly people begin to ask themselves, is there a generic version of this; how much should this cost?  Those are the kinds of questions that begin to create small businesses with a competitive product.  And hospitals like the one we're in today have led in that transparency, knowing the quality, knowing the cost, being involved in the decision, a very important way to keep costs down.

THE PRESIDENT:  Yes, that's why the best health care system is one that recognizes that decisions made by doctors and patients are the best decisions.  It's best to hold down costs.  It's best to enhance quality.  It is really what happens in most other aspects of our market.  It doesn't happen -- happening in health care.  And the policies that we're detailing are trying to encourage more consumer involvement in order to hold down costs.  And it's a foreign concept for a lot of people because it hasn't been happening for years.  And it's a concept that, frankly, some in Washington don't like because it runs contrary to a philosophy that basically says the federal government is a better decision-maker.

Anyway, thanks for joining us.  Thanks for being an innovator.  The tax deduction is going to help your folks.

MS. GELENCHER:  Yes, very much so.

THE PRESIDENT:  $15,000, $7,500 for a single person.

MS. GELENCHER:  And I can't imagine why someone would not --

THE PRESIDENT:  Be for it?

MS. GELENCHER:  -- think it would.  (Laughter.)

THE PRESIDENT:  It's an interesting question, particularly since it's a revenue-neutral proposal, which is important.  Cost money or lose money -- according to the experts, it's revenue-neutral.

Jones -- Dan Jones, where do you live?

MR. JONES:  In St. Louis, Missouri.

THE PRESIDENT:  Home of the mighty Cardinals?

MR. JONES:  Yes, sir.  Yes, Mr. President.

THE PRESIDENT:  They came to the White House recently.

MR. JONES:  Yes.  I am a small business employee of a computer company outside of St. Peters, Missouri, specializing in computers, hardware, software, maintenance consulting.  And your health care proposal looks very profitable to me.  If I'm going to make, say, we'll give a rough estimate, $600 a week, and I can save $7,500 off my taxes, get a tax deduction for $7,500, doing the math, I save about $2,300 a year.  Well, since I don't have insurance, that $2,300 a year can be put towards insurance, you know?

Being a former -- I've had insurance, and when I had it, it just kept raising up and up and up and up.  It started at $170 and when to $190, $200, $220, $230 and finally got to $400.  Well, $400 a month is $4,800.  That's a large chunk of money out of my pay, plus after taxes.  That $4,800 can be put towards a car, a house.  I had to cut it because you look at what you have and your decisions to make as a life person.

You've got your cell phone.  I can't get rid of my cell phone for what I do.  The customers need to be able to contact me.  It's stated in my contracts.  Can I get rid of my electric?  If I like spoiled milk, sure.  Do I want to get rid of my car?  I got to be able to get around.  You just have to make those decisions and look at those decisions.

THE PRESIDENT:  Here's the classic guy -- young guy in the marketplace, basically priced out of the individual market. 

MR. JONES:  Yes, sir.

THE PRESIDENT:  And the plan helps him.  Matter of fact, what they were telling me coming in that you could buy a good health care plan for about $1,350.

MR. JONES:  Yes, we were looking at that.  And within the state of Missouri I can get about $1,300 for a really nice health care for the year.

THE PRESIDENT:  Save $2,270 in taxes.

MR. JONES:  Over the year.

THE PRESIDENT:  So you put $929 in your pocket.

MR. JONES:  Absolutely.

THE PRESIDENT:  Does it make sense to do that?  I think it does. 

MR. JONES:  What could you do with just a little over -- under a thousand dollars?  That's Christmas, you know?  (Laughter.)

THE PRESIDENT:  Well, why don't you think about saving it?  (Laughter.)

MR. JONES:  Yes, well, I got a gigantic family and I got a godchild who, buy me, buy me that.

THE PRESIDENT:  Anyway, there are plenty of people who feel like they're doing just fine when it comes to health insurance, particularly those work for big corporate America, which is fine.  It's just that the system discriminates against the Dan Joneses because the tax code that has evolved over time has made it harder for him, relative to other people in our society, to purchase insurance. 

And this is exactly what this plan is designed to do.  We're trying to move somebody, like Dan, from being a statistic, an uninsured person, into insurance.  And here is a logical way for the government to do so.  And if people in Washington are serious about dealing with the uninsured, here is a serious idea for them to consider.  They're just dismissing things because of pure politics; we have put forth ideas that are worthy of debate, and we believe will work.  And I know that our citizens, fellow citizens, regardless of their political party, expect there to be a serious dialogue on constructive ideas that are put forward to make sure people like Dan Jones have got private insurance.  And I thank you for coming and sharing -- how many people work in your firm?

MR. JONES:  Three full-time employees right now, but hopefully more.

THE PRESIDENT:  But you're growing.

MR. JONES:  Absolutely. 

THE PRESIDENT:  There you are.

MR. JONES:  Small businesses, they grow.  And the more money you save along the way, the more you can grow.

THE PRESIDENT:  There you go.  Well, thank you for coming.

MR. JONES:  Thank you, Mr. President.

THE PRESIDENT:  Tom.  Appreciate you coming, Tom.

MR. BEAUREGARD:  Sure.

THE PRESIDENT:  Tom Beauregard.  What do you do?

MR. BEAUREGARD:  I lead a business within United Health Care that's focused on extending access to the uninsured.

THE PRESIDENT:  Oh, really?

MR. BEAUREGARD:  So we see your tax parity proposal as important.  There really is a need to kind of level the playing field between the employer market and the individual market.  So we're seeing the small employers who are having a hard time staying in the game, because of affordability.  We see more and more workers in an independent status; about 20 percent of the population now is working in an independent contractor consultant environment where traditional health insurance isn't available. 

And then the other thing we see is just changes in the labor market, where you've got people moving from job to job.  So the average individual will have about 10 jobs across their career now.

THE PRESIDENT:  That's right.

MR. BEAUREGARD:  So there really is a need for --

THE PRESIDENT:  That's an interesting point -- excuse me.  A lot of people in America probably know this, but just in case they don't, most -- people change jobs, like, seven or eight times before they're 35 years old in America these days. 

MR. BEAUREGARD:  And it's accelerating.

THE PRESIDENT:  That means you better have a portable health care plan.

MR. BEAUREGARD:  So it's affordability and it's portability.  And those are two categories that are really important to focus on.  And if we look at the tax proposal, it's your point if that could be coupled with state initiatives -- so funding for low-income individuals -- and then to your point, essential benefit plans.  We've got to get down to private sector innovation that's -- that has designs that, in fact, are reasonable and affordable.

So I think partnership between federal, state and the private sector, we can extend health insurance on an affordable basis.

THE PRESIDENT:  I appreciate your studying it.  You may need to come up to Washington to testify.  (Laughter.)  Thank you very much. 

Why don't we end with Esmerelda?  Esmerelda, welcome.

MS. WERGIN:  Thank you.

THE PRESIDENT:  You are a -- where do you work?

MS. WERGIN:  I work at my grandmother's restaurant, Ninfa's Tortillas.  I'm a waitress there.

THE PRESIDENT:  Ninfa's?  You recommend it?

MS. WERGIN:  Well, yes.  (Laughter.) 

THE PRESIDENT:  How are your cheese enchiladas?

MS. WERGIN:  Perfect.  (Laughter.)  And she makes them herself.

THE PRESIDENT:  Does she really?

MS. WERGIN:  Yes, she's back there.

THE PRESIDENT:  What's her name?  Ninfa?

MS. WERGIN:  Ninfa.

THE PRESIDENT:  That's what I thought.  Good.  Married?

MS. WERGIN:  Yes, married with two children.

THE PRESIDENT:  And how old?

MS. WERGIN:  I have a two-year-old and a seven-year-old.  Both boys.

THE PRESIDENT:  Fabulous, fabulous.  And so give us your health insurance story.

MS. WERGIN:  Well, I think more or less, some jobs offer you health insurance plans, but they cover nothing.  And you're paying so much a month for this insurance policy but yet it really covers nothing that you need.

Right now my husband and I are kind of doing our homework on different insurance plans and policies and things like that.  But it's really hard to find one that's going to suit your family's needs.  And then once you finally find that, just the X amount of dollars you're paying out of your pocket a month is very difficult to do, especially with two little boys who like to run into walls and hurt themselves all the time.  (Laughter.)

THE PRESIDENT:  This plan we've outlined would save Esmerelda and her family $3,500 a year.  Does it make sense to level the playing field and have a rational tax code and enable her to be able to purchase health insurance?  I think it does.  Rather than having your family sit outside the system, grinding away on trying to find a health care system that they can afford, why not help them afford a health care system through making the tax code fair?  That's all we're asking.

Isn't that right?

MS. WERGIN:  Oh, whatever you say, Mr. President. (Laughter.) 

THE PRESIDENT:  Esmerelda, thanks for coming. 

I hope people got a flavor of what we're trying to

 get done, that this plan helps people be able to afford private health insurance, and that is really the crux of good health care.  Good health care is a health care system where government helps people who need help like the poor, those who are hard to insure.  Part of what we recognize is that Mike needs to give states flexibilities to help set up risk pools, to be able to  add selection when it comes to individualized markets.  But, ultimately, the best health care plan is one that trusts people like Esmerelda and her family, or Jones -- Dan Jones -- to make decisions, and is one that enables our small business sector to remain economically viable.

We thought long and hard about what to propose.  We proposed a bold initiative, an initiative that takes equities [sic] out of the system, so people are treated fairly.  And I know Americans expect that the United States Congress will take a good look at all ideas to determine how best to make this health care system run well.

And I thank you all for coming and giving us a chance to talk with you.  I appreciate your candor, and appreciate what you do for the country.  Thank you.  Good job. 

END 12:58 P.M. CST

Remarks by President Bush in Roundtable on Health Care Initiatives (See part 1 of 2)