Former Health and Human Services (HHS) Secretary Mike Leavitt stated, "The federal government must play an active role in reducing spending but not seek to become the sole solution in efforts to overhaul the U.S. health care system". In an interview with National Journal staff, Leavitt warned that lawmakers should initially reject "three fake cures" before progress can be made on an overhaul. The first one is that "the market will fix this and everything will be fine, the second is that bureaucrats will fix it, and the other is that we just need to spend more money."

Leavitt laid out several proposals to move forward with an overhaul. He said that management of the Medicaid program needs to be turned over to the states, who would hire private insurance companies to provide coverage to residents that meet minimum standards set by HHS and Congress, with federal subsidies guaranteeing up to 57% of the cost.

Leavitt also said addressing the risings costs of programs such as Medicare, which drives up the overall costs of the health care system, is a key challenge for the Obama administration and Congress. He added that he predicts that Medicare could run out of funding as early as 2015, not 2019 as others have predicted. "Health care entitlements should be addressed now," he said. "We can solve this problem of rising health care costs very quickly" by rolling out a plan for an overhaul over the next five years, Leavitt said.

Leavitt said that he supports a free-market approach, but noted, "A market without rules or the capacity to resolve inequities or the capacity to subsidize those who are in hardship will not solve this problem." He also said, "The important role here for the government is to organize an orderly and efficient market," adding that "government should set rules for expected behaviors within the marketplace and to cure inequities when someone cheats or treats another unfairly. There has to be an enforcement mechanism. When a government organizes the market, it must have the means of subsidizing those in need of help, according to the norms of society -- and that's what government does best." After the organization, government should resist interfering with the free market for insurers to provide access to coverage and benefits, Leavitt said.

Leavitt also said that congressional Republicans need to unify behind an alternative to Democratic plans for slowing rising costs of the program, or they risk being left out of the overhaul debate (Hess, CongressDaily, 2/24).